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December 6, 2006

Morning Market Buzz

Although delinquencies and foreclosures are still low by historic standards, there is increasing evidence that subprime borrowers are getting into more trouble as rates reset upwards. Housing counselors are helping people like Shirley Bird, 52, a janitor at a Chicago Police Department precinct, refinance her 12 percent variable loan with a 8 percent fixed-rate mortgage.
Subprime Loans Going From Boon to Housing Bane [NY Times]

Official housing prices are not painting an accurate picture of the market, especially in formerly hot markets like Naples, Florida where a recent auction showed prices 25 percent below where they were a year ago. The big problem with the national stats? They don't capture all the houses that are sitting on the market not moving because sellers won't drop their prices.
The Hidden Truth About Home Prices [NY Times]

City Council Speaker Christine Quinn and Mayor Bloomberg last night settled on a tax-credit program that expands the neighborhoods where developers can get tax credits for building affordable apartments. Quinn will release the full details of the plan to the city council today. Bloomberg said the deal ""strikes the right balance towards maintaining a strong housing market while also providing increased funding for affordable housing."
Deal on Housing Credits [NY Post]

"Lately, in our experience, not many people have been interested in Williamsburg," says Shana Altstaetter, director of operations at HH Realty Group. "They're more interested in areas farther out — Clinton Hill and Fort Greene." [Metro]




Posted by Brownstoner at 9:28 AM | Comments (21)
Categories: Market

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Comments

So Williamsburg has finally priced itself out of the range of the demographic who actually wants to live there. Didn't see that coming...

Posted by: loser at December 6, 2006 9:41 AM

Maybe it's just stating the obvious but regarding foreclosures, banks agressively marketed ARMS and other combination loans (i.e. HELOC) at historic low interest rates. I don't know how some people could have signed up for these things or how banks could be so loose with their lending, because interest rates had really nowhere to go but up - salaries certainly aren't going up. This is living on the edge. If an unsophisticated person wasn't fully aware of the risks or really paying attention to the rising interest rates and/or unable to lock in a fixed rate, they are stuck with significantly higher costs when the loan resets. Combine that with higher energy costs, a tax hike, etc. and it could be enough to wipe them out. It is inevitable that marginal borrowers will be knocked out of the box. It's a shame.

Posted by: donatella at December 6, 2006 10:21 AM

Yep, it is a shame. Poor people are always getting screwed!

Posted by: Anonymous at December 6, 2006 10:30 AM

I hate to be negative, and I'm sure there are a lot of smart people saying this is the bottom of the housing market, but I just don't see it... The Dow is at an all time high, bonuses are up, and unemployment is low... It will be an absolute bloodbath in real estate if the economy really turns sour...

Posted by: Mark at December 6, 2006 10:30 AM

That's funny, I was just thinking "it will be an absolute bloodbath for the economy if real estate turns any sourer."

I like how the second NY Times article says that one could be forgiven for thinking that the housing market was crashing. So glad to hear I'm forgiven.

Posted by: sylvia at December 6, 2006 10:38 AM

And Donatella, I'm not sure that it's just that banks loaned to gullible, underinformed people. I heard an awful lot of "real estate always appreciates" and "housing prices have nowhere to go but up", especially on this site. And if one of those gullible, underinformed people actually believed that and thought that somehow they were investing in a sure thing, you can't really fault them for overextending themselves. Now that they owe more than their houses are worth and they can't refinance, they're really getting screwed.

Posted by: sylvia at December 6, 2006 10:44 AM

Also, to state the obvious - even if the underlying value of the asset was / is appreciating, if your cost of financing can keep going up, you are screwed. I had a HELOC to finance 10% of my house when I first bought and that piece was a ticking bomb. Fortunately, because of the appreciation of house, I was able to get everything rolled into a good rate fixed, but I did a little of a highwire act myself.

Posted by: donatella at December 6, 2006 11:38 AM

More and more people are discovering Brooklyn - and Williamsburg is just plug ugly.

Posted by: Anonymous at December 6, 2006 11:54 AM

Well, Clinton Hill and Fort Greene are just different places than Williamsburg, Historical, kids friendly, more mixed, less pollution,less bridges snd tunnels crowds, Trees .......

Posted by: Anonymous at December 6, 2006 12:33 PM

Less bridge and tunnel crowds? I remember when WE (Brooklynites) were the bridge and tunnel crowd.

Posted by: yente at December 6, 2006 12:50 PM

Proud to be a bridge and tunnel person!

Posted by: donatella at December 6, 2006 1:03 PM

Can anyone elaborate on what else is significantly driving the economy besides housing?

Posted by: Anonymous at December 6, 2006 1:56 PM

In my 6 years of following the real estate market in Williamsburg, I have yet to encounter a listing by HH Realty Group.

Not surprising they're pushing the markets they serve.

Posted by: investor at December 6, 2006 3:06 PM

and that comment that Clinton Hill and Fort Greene are 'farther out' - farther out of what? out of Williamsburg?

Posted by: Anonymous at December 6, 2006 4:11 PM

well, anon 1:56, to hear it told by some people on this site, the economy is run exclusively on wall st bonuses. not that that's of any comfort to the rest of us...

Anon 4:11: they're further from, say, midtown. they're not further from the financial district. it just depends on where you work (in manhattan).

Posted by: sylvia at December 6, 2006 4:36 PM

Maybe farther out of college.

Posted by: Anonymous at December 6, 2006 4:53 PM

I am finding a ton of Williamsburg renters who are looking to buy in FG/CH lately. Some are priced out of what kind of space they'd prefer over there, and most are just loving the quiet of our beautiful, landmark neighborhoods over here. Plus you gotta figure that it's just plain weird being in your 30's and living in what must feel a bit like a dorm-setting forever. What's the reality...is it like the 80's was on the UES?

Posted by: Anonymous at December 6, 2006 8:24 PM

Folks are looking further out in Bklyn maybe because of the attraction of beautiful landmarked areas. Some in Williamsburg have tried to save some of the architecturally significant buildings there but one by one they are falling to the condo boom. Plus the new buildings going up in the neighborhood are so ugly that no one would want to live there voluntarily.

Posted by: Anonymous at December 6, 2006 8:42 PM

A few years back, my current CH garden floor tenant was living in a hip loft in Wburg (no heat, no hot water, no legal living space, no nearby markets, etc.). First time he saw the apt he measured the fridge and range, as he assumed he had to supply his own...he'd never rented a legal apt before. Fast forward, now he's breakfasting at Choice, working full time, and grousing when the temperature is below 80 degrees. Beware, artists: the bourgeois comforts of Clinton Hill can destroy that long-suffering perspective essential to your art...

Posted by: Anon at December 6, 2006 11:35 PM

Is it poor people who are getting screwed, or the less thoughtful ones?

Posted by: Ed at December 7, 2006 12:55 AM

Can anyone ELABORATE on what else is significantly driving the economy besides housing?

Posted by: Anonymous at December 7, 2006 9:35 AM

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