Move over Manhattan and San Francisco. The buy-up of real estate by investors and wealthy foreigners has made Brooklyn, N.Y., the most expensive place to rent or buy in America.

Bloomberg reports:

Of the 475 counties analyzed by RealtyTrac through October, 98 areas weren’t as affordable compared with the average level for the period starting in January 2000, the Irvine, California-based data company said in a report today. Brooklyn, New York, where a resident would need to devote 98 percent of the median income to afford the payment on a median-priced home of $615,000, was the least-affordable market, followed by San Francisco and Manhattan.

Investors and foreign buyers have helped drive up home prices in high-cost markets, keeping many residents locked into rentals, where costs also have been rising. Prices in 20 U.S. cities climbed 4.9 percent in the year through September, the S&P/Case-Shiller index shows. Across the country, values have gained 25 percent since their February 2012 bottom.

In an interview with Bloomberg, RealtyTrac Vice President Daren Blomquist said, “Incomes have not grown nearly as fast as home prices. … That disconnected home-price growth has been driven by investors and other cash buyers who aren’t as constrained by income.”

Consequently, many neighborhoods are out of reach for people who could previously afford them.

— Posted by Alexander Reed Kelly.

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