clock menu more-arrow no yes

Filed under:

Williamsburg Armageddon: Parents Pull Plug on Financial Aid

New, 21 comments

The story may have been written solely for the purpose of stoking the flames of Internet derision (it briefly occupied the top-story slot on the NYT homepage), but Christine Haughney reports that in the past six months, Williamsburg trustafarians?how many copy editors did the Times bring in to review that term??have been decimated by the lack of financial support from suddenly cash-strapped parents, and now the neighborhood's breakneck pace of gentrification could be hanging in the balance. These 20-something loafers are shocked and dismayed to find themselves having to work eight-hour shifts at actual paying jobs instead of just interning or pumping quarters into the Tapper game at Barcade all day. But all kidding aside, the impact on the neighborhood's already hurting real estate market?you can't swing a dead hipster without hitting a shiny new condo-turned-rental?has been dramatic:

The real estate market, too, is shifting as wealth evaporates. Ross Weinstein, a managing partner of the Union Square Mortgage Group, has worked with hundreds of Williamsburg apartment buyers in the past two years.

“A lot of the money came from family,” he said. “That piece, it’s gone for a lot of people.”

In the boom years, Mr. Weinstein said, 40 percent of the mortgage applications he reviewed for buyers in Williamsburg included down-payment money, from $50,000 to $300,000, from parents. About 20 percent of the applications listed investments that gave the young buyers $3,000 to $10,000 of monthly income.

But in the past two months, Mr. Weinstein said, he has handled two to three deals a week in which the parents cut back their down-payment help.

The number of sales in Williamsburg dropped nearly a quarter in the first three months of this year compared with the same period a year ago, according to HMS Associates, a Brooklyn appraisal firm. And in three recent cases, Mr. Weinstein said, owners sold their apartments in short sales — selling for less than the bank is owed, to avoid foreclosure — because they were no longer receiving parental help.

Yikes, might the thousands of new apartments coming down the pike end up not in the hands of the pretend homeless, but the actual homeless?
· Parental Lifelines, Frayed to Breaking [NYT]