A new report says an increasing number of homes around the city are being bought with the intent to resell them — a process known as flipping. It's happening in one long-troubled Brooklyn neighborhood more than anyplace else, and that is causing a lot of concern. Borough reporter Jeanine Ramirez has the story.
Signs seems to be posted everywhere in East New York, Brooklyn offering cash for homes. Sometimes solicitors leave notes on doors, or even ring the bell.
"We want to buy. We want to buy. We want to buy. That's all they say," said one neighborhood resident.
"They'll come over and if they like the house, they'll offer a price," said another.
"They're always saying they're interested in purchasing our property," said a third. "They always say all cash."
The Center for NYC Neighborhoods, a nonprofit group that seeks to keep housing affordable, says in a new report released Monday that East New York is now the top neighborhood in the city for speculators who buy and flip homes. Last year, 94 homes were sold for an average of $215,000, and resold within 12 months for more than triple that amount.
"There's a real rush to make money in our neighborhoods because you can get such a higher return here and what that's doing is creating these false markets," said Christie Peale, the group's executive director.
Experts say East New York is a target because of its high foreclosure rate, slow recovery from the recession and concentration of elderly homeowners. Also, the city is moving to rezone East New York to allow more housing, and East New York has become the latest frontier in the housing boom sweeping Brooklyn
"Now we're seeing the gentrification wave come from Bushwick and Bed-Stuy and other communities coupled with the rezoning has really created a tremendous amount of pressure on homeowners," Michelle Neugebauer, executive director of Cypress Hills Local Development Corporation.
We spoke to one homeowner who has been fending off foreclosure as well as solicitations for her home. She recalled one conversation with a solicitor. "I said, 'You're not trying to help me. I think you're trying to help yourself. So just go,'" she said.
The Center for NYC Neighborhoods study shows more than 1,800 properties were flipped citywide last year. But the real estate speculation in East New York, coupled with the rezoning plan, helped community groups to force the city to create a $12 million fund to fight displacement just in East New York.
The East New York rezoning proposal is scheduled to go before the full City Council for a vote on Wednesday.
Community groups say they'll also push for legislation against property flipping. "So it's not legal anymore to buy a home so low and flip it for 100, 200 percent profit in the same year," Neugebauer said.
They're encouraging homeowners to see one of their housing specialists before any agreement to sell.
The Center for NYC Neighborhoods is encouraging homeowners at risk of foreclosure to call 311 to get connected to free, legal housing counseling.