Wednesday, October 21, 2009

Un-Real Estate in Kensington Brooklyn

I once knew a man, a simple man who worked in a factory down by the East River at the end of Atlantic Avenue. A factory that made boxes, just simple boxes for the aspirin you took when your head hurt.

And this man always had the burning desire to buy a house, a big house where his entire family could live.

So with the savings he had from working at that simple factory where they made simple boxes, he was able to buy a house in Kensington Brooklyn.

Yes a simple job bought a great big house,
and what a wonderful world it was.

Now that person was my grandfather Paco, and the house he bought was the house I now own which is 399 East Fourth. The year was 1948, and the times were very fair.

Today my wife and I know a very nice simple couple. The husband makes a very nice salary even in the year 2009, something like 110,000 dollars. He works in an office and is very proud of all that he has accomplished. They are both in their early 30’s and have two wonderful little children. And no they are not us.

And they save money these two; yes they do, because they know that you won’t be able to do much in life if you don’t save money. They also have a dream just like my grandfather Paco, they want to buy a big house just like he did to raise a family. And considering the cost of everything they would love to buy a three family house and have tenants to help offset the cost of the great big mortgage.

But this is where “Real Estate” becomes “Un-Real” estate, even with a couple that are in extremely good financial condition and have “perfect” credit according to my wife.

So let’s examine some numbers here, why don’t we.

In 1948 my grandfather bought 399 for 12,000 dollars.
He probably made something like 3500 dollars a year
So the house basically cost 3.42 times his yearly gross salary.

In 2009 a large three family in Kensington may go for 950,000 dollars. A very good salary at 110,000 is nothing to sneeze at.
So here the house cost almost 8.63 times his yearly gross salary.

Oh sure you can buy a house two hours away up in Sullivan county and commute your life away. Maybe something for 300 thousand to bring it all in perspective. But my grandfather who worked in a factory didn't have to do that. So why should someone who makes over a hundred grand in 2009 be forced to do that?

And these people are starting to get depressed about it, because it doesn’t look like they will ever be able to buy the kind of house they would like to in Brooklyn. And let me tell you as prices go Kensington is cheap. Fort Greene and Park Slope have prices well over two
million dollars.

And why is it like this and not like it was in 1948?

Well, I for one believe that the current state of “Un-Real” Estate is being controlled by a select few buyers and sellers who have owned property for years. So whatever shots are being called are being called by this group of people who just play a much bigger game of “Un-Real” Estate than the rest of the world. Yeah, right there in the "Skybox" while the rest of the word lives down in the "green" seats.

So what happens?

People like my wife’s friends get shut out of buying a house in Kensington Brooklyn and start to consider moving to Florida. While people like my grandfather Paco probably end up living in a homeless shelter instead of dreaming about buying a house for their family.

Yeah, that's what happens.

Ron Lopez


Zane said...
This comment has been removed by the author.
Zane said...


this post is making its rounds on Twitter... what a great, well written, article. Straight and to the point...

I enjoyed reading this, as well as the other posts you have up. Thanks for the share!

Elliot James said...

I've bought great houses in Florida for under 200Gs. Clean, safe neighborhoods. The entire tri-state area is absurd.