Calculating the Real Value of Your Home
In the midst of all the talk about the tanking housing market, the New York Times reported this weekend not about what your home is worth, but what it should be worth, according to assorted economists. They looked at regional pockets of the U.S. and tried to calculate how much homes are overvalued there, which…
In the midst of all the talk about the tanking housing market, the New York Times reported this weekend not about what your home is worth, but what it should be worth, according to assorted economists. They looked at regional pockets of the U.S. and tried to calculate how much homes are overvalued there, which helps them figure out where and when the market might bottom out completely. Here’s some surprising news: While Miami, Phoenix and Chicago have the most overvalued homes, New York homes, at least according to the Columbia Business School, are five percent undervalued. Huh?
Finding the Right Price for a Home [NY Times]
Miami or Dumbo? Photo by Victoria Belanger.
Zohan12: Sorry, my mistake. I guess Staten Island may an interesting alternative. Certainly the pricing makes it attractive. Is transportation an issue there? I work in downtown Manhattan. There is something to be desired about a fully detached house with a yard and garage! Its definately worth a thought.
lechacal: Westchester and New Jersey are certainly other alternatives but I hear taxes in these areas can be a tremendous expense, is that true? Which one has higher taxes?
This article may refer to the greater Metro area, which may very well be undervalued by some measures. Manhattan and acceptable Brooklyn are clearly overvalued and in for a sharp correction, in my opinion (no shock to anyone who has read my posts), but that doesn’t necessarily hold true for the rest of the City or for outer areas like Westchester and (gasp!) New Jersey, some of which have been in a soft market for a couple of years.
If the Colombia b-school survey took the lazy approach (and I would bet they did), they relied on Metropolitan Statistical Areas (for which there is readily available government data, including housing figures from OFHEO, the government agency that releases the Housing Price Index every quarter). The New York MSA is quite large and includes at least Westchester and parts of Jersey. Probably more.
NY Native – I already live on Staten Island. I think you are mistaken me for Smatchums. I know the area that Smatchums is moving to on the South Shore of Staten Island and it is a beautiful neigborhood. More than half the houses in the Opal community have been developed and sold even in the tough market we are in right now.
I like that quote…I can’t agree with you more. Anyone who has cash right now should invest in the real esate and stock market because you can find great bargains everywhere. It’s those people who were smart and brave enough to invest in the Stock market after it crashed in 1929, who made a fortune in the years to follow. People should capitalize on a down market.
NYC undervalued? Depends on where in NYC you are looking! Manhattan is a very different market that the other 4 boroughs in my opinion.
Jackslope – the average price per square foot $1473? Is that a real number? I can’t see how an average working couple could afford a 1.5 Mil 1000sf apartment as a main residence. Then throw children into the mix and you are running tighter on cash and tighter on space! If you wanted to add a second bedroom it will cost you an additional 440K for another 300sf?!? wow.
While Manhattan is out of many New Yorkers reach, outer boroughs show value and perhaps the bring the city’s average to be “undervalued”. I guess if a buyer knows where to look they can find great value in NYC. Im renting now and looking to make a move soon so discussions like these peak my interest.
Zohan12- Good luck in your venture into Staten Island I’m sure its a great place to raise a family! And the prices in the community you are looking at are a fraction of Manhattan’s prices!
Slappy- Where did you purchase in the last 6 months?
Will the market continue to adjust? Who knows for sure? Can anyone predict the absolute bottom of the market? NO!
Is it a good time to buy Real Estate? Maybe we should all take some advice from a famous entrepreneur:
“The way to make money is to buy when blood is running in the streets.”
John D. Rockefeller
NYC undervalued? Depends on where in NYC you are looking! Manhattan is a very different market that the other 4 boroughs in my opinion.
Jackslope – the average price per square foot $1473? Is that a real number? I can’t see how an average working couple could afford a 1.5 Mil 1000sf apartment as a main residence. Then throw children into the mix and you are running tighter on cash and tighter on space! If you wanted to add a second bedroom it will cost you an additional 440K for another 300sf?!? wow.
While Manhattan is out of many New Yorkers reach, outer boroughs show value and perhaps the bring the city’s average to be “undervalued”. I guess if a buyer knows where to look they can find great value in NYC. Im renting now and looking to make a move soon so discussions like these peak my interest.
Zohan12- Good luck in your venture into Staten Island I’m sure its a great place to raise a family! And the prices in the community you are looking at are a fraction of Manhattan’s prices!
Slappy- Where did you purchase in the last 6 months?
Will the market continue to adjust? Who knows for sure? Can anyone predict the absolute bottom of the market? NO!
Is it a good time to buy Real Estate? Maybe we should all take some advice from a famous entrepreneur:
“The way to make money is to buy when blood is running in the streets.”
John D. Rockefeller
thank for the link….but i agree with the “cycle” poster of that thread who compared it to 2007 and said inventory was up 30%…..many potential sellers out there don’t even want to put their homes on the market because of the climate…but that can’t be measured and is anecdotal….the only question would be, “Why are sales down so much?”, and then you start with that negativism we all call common sense…..I’m still looking to possibly buy another property, but I am certainly looking for some price drops…life is a chance….I’m not trying to time the market exactly, but jerk-off articles like the one we are posting on make my stomach turn….NYC is undervalued? So says who? NYC sellers?NYC brokers?NYC idiots?
…the feel of those open houses sure is different…..i used to go and have the brokers feel like they were doing me a favor by letting me in….i think they felt that ingnoring you would wet the appetite…like when a bouncer would deny entry to a club, while its totally empty…..now they want to know my kids names, what i think about the yankees pitching and call me like i’m their damn girlfriend……this game is over, at least for a few years, and I’m waiting for everybody to get the hint that the cat is TOTALLY out of the bag, and everyone knows these units are not worth anywhere near asking
Since we’re speaking of Staten Island real estate, someone still needs to buy this house:
http://newyork.craigslist.org/stn/reb/792018801.html
I actually grew up on that block and always loved this house. It’s a gorgeous property. If I had $600k to blow on real estate that’s where it would end up.
smatchums – you didn’t recently sell a mansion with an indoor swimmin’ pool in Dyker Heights did you? It was opal-ridge-esque. But to the max.
Slappy,
I agree…NYC will correct, although in terms of your inventory argument, it would appear that Manhattan (at least) is not doing what you predict it should be doing. Despite the fact that summer is always a slow time and that sales are slowing considerably since last year, it seems people simply aren’t putting their homes on the market, unless they absolutely have to…
http://www.urbandigs.com/2008/08/manhattan_inventory_dropping_f.html