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September 26, 2006

Brownstoner on WNYC

FYI, we're going to be on the Brian Lehrer Show this morning at 11:40am talking about the state of the NYC real estate market. You can catch it on WNYC 820 AM and 93.9 FM.
The Brian Lehrer Show [WNYC]




Posted by Brownstoner at 10:15 AM | Comments (25)
Categories: General

Comments

What about us? Are you going to give us that interview that we asked you for too?

Posted by: BrooklynJay at September 26, 2006 10:40 AM

hmmm real estate down. As predicted. Why were people on this site saying the only way is up a year and a half ago? Silly silly....

Posted by: Tom at September 26, 2006 11:47 AM

Ha I love how they refer to you as Mr. Brownstoner.

Posted by: Jimmie at September 26, 2006 12:07 PM

Tom, Anyone who says real estate will ALWAYS go up is an idiot at any time. But as for a year and a half ago -- well, RE did go up for a year and a half, more or less.

I'm sure there were people predicting a RE decline five years ago. It doesn't make them geniuses because it happened five years later.

Mr. B: you didn't take the bait when Lehrer asked what neighborhoods are going to decline most. Wuss! Kidding -- enjoyed the segment.

Posted by: linusvanpelt at September 26, 2006 12:09 PM

Nice segment. But if you look back at the archives on this site you will see this blind headiness of people not believing prices would not continue to go up. So now do we look at 8 years of decline as stated on the radio? Hmmm... seems possible. Sheep mentality

Posted by: Tom at September 26, 2006 12:14 PM

FWIW I thought you came off very well, although the segment was too short to have the depth of this blog.

Posted by: Bob Marvin at September 26, 2006 12:16 PM

people are so afraid to reveal their true identity..lol (as I hide behind an anonymous posting)

Posted by: anon at September 26, 2006 12:32 PM

It was interesting. I loved that foreclosure manager who said the sky is falling!! It really seems like the suburbs are in much worse shape than here in Brooklyn. As far as what the New York magazine reporter said about fringe areas falling first, I think Brooklyn is different in that there is so much amazing housing stock in our so-called fringe areas. It actually is great if prices fall there as it will allow many renters and first-time buyers to afford a house. Anyway, you both came off as extremely well-informed and articulate.

Posted by: west at September 26, 2006 1:07 PM

Thanks. It's hard to tell how you're sounding in the moment.

Posted by: brownstoner at September 26, 2006 1:33 PM

Those who missed the segment can listen at the following URL (scroll down):
http://www.wnyc.org/shows/bl/episodes/2006/09/26

Posted by: Anonymous at September 26, 2006 2:04 PM

brian lehrer? the same brian who works for BHS? the same no personality boring agent who thinks he is god?

Posted by: me at September 26, 2006 2:40 PM

I don't think so, unless this is the Brian Lehrer you were talking about.

http://www.wnyc.org/shows/bl/

Posted by: Huray BL at September 26, 2006 2:51 PM

to huray BL: oh heavens...definately not the same guy!!! my bad!

Posted by: me at September 26, 2006 3:53 PM

only thing I didn't like was when you told the kid who wrote in via e-mail at the end to ask his parents for money to buy a home- I hope that was a joke....

Posted by: Anonymous at September 26, 2006 5:19 PM

only thing I didn't like was when you told the kid who wrote in via e-mail at the end to ask his parents for money to buy a home- I hope that was a joke....

Posted by: not a trustifarian at September 26, 2006 5:20 PM

It definitely was a joke, though one based in the reality that no 23 year old could buy a place in Brownstone Brooklyn right now without some family help. What we didn't get to add was that there weren't a lot of 23 year olds who could have bought a place on their own ten years ago before the market took off either.

Posted by: brownstoner at September 26, 2006 5:43 PM

Good, but a little too much of "NYC is different." It's nonsense, and weakens the argument, because everyone and their grandma thinks their area is "different."

Posted by: Anonymous at September 26, 2006 6:39 PM

what does THAT mean - of COURSE every neighborhood is different. duh. and of course NY IS different - this is a destination area. people move here from their hometowns and after college and for their big break, big promotion, etc. it has always been different - more comparable to big cities internationally than to other cities in the US.

Posted by: miss priss at September 26, 2006 8:04 PM


Brooklyn real estate can, does, and will continue to fluctuate in price just like everywhere else in the world does. Stop claiming superiority! It's sickening.

Brownstoner, the mere fact that lots of people would like to own Brownstones in Brooklyn does in no way mean the market won't fall to pieces like you and your friend at NY Mag claim.

Thirty years ago brownstones sold for $25k in Greenwich Village and of course there were lots of people who would have loved to live in them then who couldn't or didn't buy.

You both were also wrong to ignore the Forclosure guys point (though I admit his accent was rough on the ears) that the percentage of owners versus renters is at an all time high in NYC and in many parts of the country.

Despite the fact that there are still lots of "potential" brownstone buyers out there, as you pointed out, it only seems logical that the rate of first time buyers buying will slow down due to sky high prices, a worsening economy, higher interest rates, the skewed relatationship between buying and renting, and first and foremost the fact that prices have risen unreasonably fast over the last five years and buyers are bound to eventually realize this.

Sure, Brooklyn is safer and offers more ammenities than ever before, and brownstones are a great place to live and raise a family, but prices are unreasonably high and clearly unsustainable.

Great interview, by the way. You're on the way to the top. I hope you remember us little guys when you get there.

Posted by: EBomb at September 26, 2006 8:51 PM

We weren't claiming that the market won't fall to pieces. In fact, we were pretty explicit that we had no idea what would happen. Also, don't think we ignored Foreclosure Guy's point, only added that we suspect that most of the casualties already showing up on his radar screen are from the less affluent neighborhoods. That's not to say there aren't plenty of scenarios in which this trend could work its way up the economic totem pole and meaningfully impact the more expensive nabes.

Posted by: brownstoner at September 26, 2006 9:42 PM

I'd like to buy some call options from anyone who thinks that residential real estate is going to decline for 8 years. First line of reasoning is that this has never happened before. Second, line of reasoning is math and the power of compounding. Say it takes a salary of $200,000 to wing a $1.0 million house today. Deprrciate $1.0 mm at 3% per year for 8 years and you get a $789K value in 8 years time. Conversely, appreciate a $200K salary(ies) at 3% and you get a salary of $253K in 8 years. Price to income goes from 5x to 3x during that time. No way buyers would sit on the sidelines as that happens.

Posted by: Anonymous at September 26, 2006 9:47 PM

This real estate stuff is hard to call, eh? But, I must say that you sounded exactly how I thought you would.

Posted by: J W at September 26, 2006 10:06 PM


Points well taken Brownstoner.

I admire the Forclosure Guy because he admited when he didn't have an answer to the interviewers question. You rarely see such honesty -- usually people just BS.

Nobody KNOWS where the markets headed, but I'd put my money on the Forclosure Guy's opinion. He's a down to earth type of person who sees things for what they are even if he couldn't clearly explain what his thinking.

And you folks who think your Brooklyn brownstones are "special" should think again. When a house in a commuter suburb sells for a fraction of what a townhouse in Brooklyn costs, there's no way in hell Brooklyn prices won't drop.

Remember, only Warren Buffet can predict the future, and he lives Omaha.

Posted by: Ebomb at September 26, 2006 10:12 PM

To anon 10:12 PM, there are a couple of significant economic differences between a suburban house and a brownstone (other than just the City cs. suburb lifestyle choice. First, most borwnstones have an income producing component since owner's often occupy only part of the house and rent our a floor or a duplex. This is not possible in most suburbs. Second, real estate taxes are much higher in the suburbs. I looked at house in Westchester that had annual tax bills of 20K+. When you have kids, you can look at that as tution money spent on good suburban schools. When your kids grow up though, you still have to keep paying the taxes. So, if you have $20K of rental income from a floor through and $15K les in taxes you have about a $35K annual cost difference for carrying a brownstone vs. a suburban house.

Posted by: Anonymous at September 27, 2006 6:53 AM

I have to take issue with the idea the brownstones in the west village sold for $25,000 thirty years ago! My parents bought an APARTMENT in the village 30 or more years ago for triple what you are quoting brownstones sold for! Stop with the stupid numbers in an attempt to make your point.

Posted by: Anonymous at September 27, 2006 1:06 PM

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