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May 25, 2007
Market Pulse: Bullish Words From a Broker
We thought readers would be interested to hear these thoughts on the Brooklyn market that a broker at a major firm shared with us via email a few days ago.
The market truly is stronger than ever. It is really nutty in a good way now. There are almost constantly multiple bidders at or above full price now. Things are now routinely selling in a week to 10 days.
Obviously, a broker has a vested interest in perpetuating the perception that the market is strong, but it seems to be consistent with what we're hearing anecdotally. Does this jibe with what others are seeing out there? Especially interested in hearing from brokers on this one.
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Comments
Was it the broker or the agent?
Posted by: Anonymous at May 25, 2007 9:12 AM
Maybe properties are starting to be priced better?
Posted by: Anonymous at May 25, 2007 9:13 AM
I think it depends on the type of property. My wife and I bid on two "family size" apartments in Prospect Heights in the last three weeks. We bid $50,000 over asking on both and lost out to higher bidders. The apartments sold in a week.
I don't think the "frenzy" extends to smaller apartments and problem properties.
Posted by: Joe at May 25, 2007 9:21 AM
people who moved to brooklyn before 2000 came here simply because they could get ALOT more space for ALOT less money than Manhattan. once the market gets to a certain inflection point you will see this frenzy stop and stop quickly. clearly we aren't there yet.
Posted by: Anonymous at May 25, 2007 9:32 AM
Even if I generally feel disdain for most real-estate brokers, I believe this broker's comments ring true and are not just self-serving.
Prices seem to have have leveled off (except for brownstones - there are only so many for sale), and demand is still strong (a contrbuting factor may be that rents have been skyrocketing).
But I do question whether the large condo developments may have overdeveloped. i've noticed that many of them are reducing their initial prices.
Posted by: Anonymous at May 25, 2007 9:33 AM
Even if I generally feel disdain for most real-estate brokers, I believe this broker's comments ring true and are not just self-serving.
Prices seem to have have leveled off (except for brownstones - there are only so many for sale), and demand is still strong (a contrbuting factor may be that rents have been skyrocketing).
But I do question whether the large condo developments may have overdeveloped. I've noticed that many of them are reducing their initial prices.
Posted by: Anonymous at May 25, 2007 9:33 AM
People are no longer moving to Brooklyn's most popular areas because they can get more for their money - they're moving because they actually like the neighborhoods. Prices have already reached Manhattan levels in several nabes and yet you don't see the market grinding down. That alone should tell you something about the new reality in Brooklyn.
Posted by: Anonymous at May 25, 2007 9:37 AM
on that premise everyone should be buying on PPW knowing that it will soon be trading at a premium to CPW. thanks for the heads up, i'll call my broker now. i cant wait to be rich.
Posted by: Anonymous at May 25, 2007 9:45 AM
As a broker (the disdain of others not withstanding...really, how silly), I can definitely agree the market has remained quite strong. The only area where I see some weakness is in coops. Their value, relative to condos, continues to decrease. The spread is now approaching 30%. Townhouses are selling particularly well because there are so few available. In this regard, Cobble Hill has really had a major uptick in townhouse prices.
Posted by: Anonymous at May 25, 2007 9:48 AM
I have found the complete opposite to what the broker said. I have actually seen a lot of new developmnets where the asking prices have been reduced because of lack of movement.
Posted by: anon at May 25, 2007 9:51 AM
We just went into contract to sell our Heights house. We received ten offers within a couple days of our open house, one was below ask, two were at ask, the remaining seven were above ask with several substantially above ask.
Posted by: e.coli at May 25, 2007 9:54 AM
9:37's right. Brooklyn got discovered by Manhattan and by the world at large as a great place to live, not just a cheap place to live. When I moved here 15 years ago, friends would come and visit and say "Wow, I never knew Brooklyn was so nice." Now they know.
Me, I don't mind sharing.
Posted by: John at May 25, 2007 9:55 AM
This is a load of crap. There is just so much new stuff going up in Prospect Hghts, Park Slope, Fort Greene and Clinton Hill, that the condo market is being oversaturated. Of course a broker would say the opposite. He/she wants to incite bidding wars.Wait a couple of months then you are really going to start seeing price cuts
Posted by: bklynboy at May 25, 2007 9:55 AM
In Manhattan, there are not much difference between living on 72nd Street and 86th Street. In Brooklyn, 15 blocks make big difference. This is why high price concentration happens in Brooklyn. And when developers try to set high price in stretched neighborhood, they have tough time. Also, even so many brownstones/townhouse in Brooklyn, not many people are selling. On my block, most of people are long time residents and proud owners.
Posted by: Anonymous at May 25, 2007 10:03 AM
Bklynboy, you can go back two years and see comments just like the one you just made. Would you be willing to check back in with us in a couple of months to see if your predictions came true?
Posted by: Anonymous at May 25, 2007 10:04 AM
i've noticed in going to a few open houses lately in park slope, that they are packed with like 50 people on the sign in sheet. i don't agree with the poster who said something about it only being with large apartments. these were small, studio and 1 bedroom places priced below 400K. Anything priced below around 300K or so is gone within a day or two, if it's remotely good.
They have all been co-ops, btw. I don't like the idea of a condo personally as I'm mainly looking at apts. in brownstones.
I do believe condo prices will go down at some point when all the development subsides and people begin to rent their places out. Once the residents see that their buildings have become free-for-alls, they will begin to crack down on some rules and we've already begun to see this with an article in the nytimes highlighting how condos are beginning to enfore more and more rules essentially becoming more co-oplike. think about a place like the novo park slope. if/when a downturn in the market takes place, that place will turn into a glorified college student dorm. i prefer something where i have a say in how my residence is operated.
keep in mind that fully 75% of all nyc housing are co-ops. they are not going away anytime soon.
Posted by: anonymous at May 25, 2007 10:06 AM
People have been saying, "Wait a couple of months and you are really going to see price cuts" for six years Bklynboy.
Everyone has their own personal appetite for risk, but a lot of people just need a place to live and are tired of paying rent. That's why people are still buying.
Posted by: Shahn Andersen at May 25, 2007 10:06 AM
"fully 75% of all nyc housing are co-ops" - not quite more like 75% are rentals. Keep in mind that vast majority of NYers are renters not owners.
I went to open house on Bergen (B,Hill) other day to a townhouse. No shortage of lookers for sure.
Posted by: Anonymous at May 25, 2007 10:17 AM
the "brooklyn" market is not hot. "Rich white brooklyn" is hot, for sure, and for 99% of people on this site that is all that matters, but I just want to point out that brooklyn is much MUCH larger than only the blocks within a short walk of a coffee shop staffed by myspace "keyboard activists" working part-time.
Posted by: Anonymous at May 25, 2007 10:19 AM
I've been looking for a large 2 or smaller 3 bedroom in Brooklyn Heights/Cobble Hill and everything is expensive (1mm+) and gone very quickly. All co-ops. The condos I've seen in Dumbo tend to linger only because there are often near duplicates on the market at the same time and there isn't the rush to sign. I know several people who bought into the Livingston Board of Ed condos, but I think those were smartly priced.
Posted by: Anonymous at May 25, 2007 10:21 AM
10:06...the old saw about condos becoming 'glorified college student dorms' is just wrong. Condos have existed here in the city for a long time now (even through a downturn) and what you describe has never happened. I just ran comps for condos and coops in Soho...there's a 30%(!) difference, on a price-per-square-foot basis, between condo and coop sales in that neighborhood over the last year. Granted, the condos are all new and some of the coops need gut renos, but still, even a 10% difference on a $3 million property represents $300,000. I wonder when coop owners are going to wake up and realize what their supposedly 'protectionist rules' are doing to their home values. Here's a good article on coops you should read:
http://www.observer.com/2007/manhattan-co-op-endangered-species
Posted by: Anonymous at May 25, 2007 10:23 AM
There are people I know, die-hard manhattanites who actually know the city, have always known and loved brooklyn but never wanted to leave Manhattan, who are now looking for places in brooklyn.
why?
Because Manhattan is losing its soul as fast as Brooklyn is gaining its cache.
It's not just about Brooklyn being discovered, it's also about Manhattan being destroyed by franchizes, overdevelopment, congestion etc. . .
Which of course is already happening to brooklyn, but not everywhere; some areas still have an ounce of soul and charm and peace left. for now . . .
Posted by: Anonymous at May 25, 2007 10:24 AM
10:19 -- who pissed in your coffee this morning? yeah, this is about brownstone brooklyn, hence the name (not to point out the obvious, but you did do it first).
Why aren't you posting on the web sites dedicated to the "other" brooklyn? Shouldn't you be contributing to those neighbs with your wise words, instead of being stuck here, getting frustrating by all the "rich white" people commenting on their rich white real estate?
Posted by: Anonymous at May 25, 2007 10:32 AM
From the article above:
"The average price per foot for a condo in the first quarter of 2007 was $1,169; for a co-op, $975."
That's a 16%+ price difference...ouch. As prices increase, this spread will only get worse for the coop owner...
Posted by: Anonymous at May 25, 2007 10:33 AM
i am 10:06. yes, thanks for clarifying...75% of non rentals are co-ops. i am well aware that us homeowners are in the minority here.
and to the person trying to get me on the condo bandwagon, i am quite aware of the differences in terms of price (although it is most certainly not 30%) as well as nature of the residence. the thing is, i have ZERO interest in a condo. you can tell me how much of a greater investment it is till you're blue in the face, but i don't prfer it. i bought my home for that purpose...to live in it and be happy. not because i was concerned that a condo was going to be worth slightly more down the road.
and i think you are wrong...i have numerous friends who bought condos here in the past 3 years, and all but one say they wish they hadn't. not only because they have commented on how their buildings have not been kept up well and that they have found that the building has become quite "transient" but they have also commented many times about the poor construction and problems they've had with their places. when they come to my place they always comment how friendly an atmosphere it is and love that i know all my neighbors by name.
of course there IS good new construction, but when we're talking about 400K and under, my place in a 100 year old brownstone has stood the test of time more than some of these places that have been around for only 3 years.
oro, forte in 10 years will be total crap. don't get me wrong, i'm glad they're being built, they are great for brooklyn and the new downtown but i have no interest whatsoever.
i think you need to check your numbers a little more closely, btw. i believe the difference in co-op/condo average and median prices is more in the neighborhood of 10% citywide.
Posted by: anonymous at May 25, 2007 10:37 AM
I looked at apartments for almost a year before closing on my place in Clinton Hill. It's been my experience that if anything is remotely good, it will be gone withing a week - certainly less than two. Moreover, the asking price is more of a suggestion than anything else.
When it came to submitting a bid on a place I liked, I was initially advised by friends that the "market isn't what it used to be" and that "no-one pays asking price anymore". (These friends owned homes on Long Island, which I now understand to be a very different market.) I kept wondering why I was losing out on apartment after apartment until I stopped to look around me, and truly saw just how many other folk were crowding into the home-opens. The competition was very fierce. To try and get a feel of what these places actually went for, I tracked the mortgages taken out on my "lost" properties' via the New York City Department of Finance, which keeps records of each property in the five boroughs. I was stunned to learn that these properties - without exception - went for well over the asking price. (In one memorable case, I learned that a two-bedroom garden apartment in Park Slope I was bidding on went for $70K over the asking price in less than a week. I offered $35K over the asking price, and a friend of mine, who is a realtor, relayed to me the final purchase price.)
Maybe real estate markets in most of the US are feeling depressed, but if the last year has taught me anything, it's this: people's appetities for housing in Brooklyn was and remains rampant. (Well, in the nabes I was looking in, anyway.) That said, it's going to be interesting to see how the string of new condo developments will affect the market.
Posted by: Nelly at May 25, 2007 10:38 AM
ok, 16%. i was closer at 10% than my friend up there with his 30% figure.
sorry, but i'll take my co-op with a 16% lower price than your condo anyday of the week. i get that it's not for everyone, so we should just agree to disagree.
Posted by: anonymous at May 25, 2007 10:42 AM
Okay, let's agree to disagree. But I've just got to take you to task on one last thing. It's great that your building has a friendly atmosphere and everyone knows eachother (my 70 unit condo building is the same, btw), but, come on, battles between coops owners (between eachother and their boards) in NYC are legendary. Owning a coop doesn't protect you from living next to an asshole.
Posted by: Anonymous at May 25, 2007 10:49 AM
"the "brooklyn" market is not hot. "Rich white brooklyn" is hot, for sure, and for 99% of people on this site that is all that matters, "
- You are 1/2 right. About people on this sight only concerned about rich white brklyn.
But all of Bklyn (and the rest of NYC) is hot - not just rich white Manh/Bklyn. etc - because of large % of immigrants in this city and their desire to own.
Not a factor covered by NYTimes, etc because not their demographic but IMHO that is much bigger factor than 'people priced out of Manhattan' and all the other code phrases for white, college educate folks used today.
The immigrant demographic is huge compared to NYTimes, Brownstoner demographic.
Posted by: Anonymous at May 25, 2007 10:49 AM
Don't worry, bklynboy, I got your back. (I love having this argument over and over.)
Doesn't really matter if the real estate bust in NYC (or "softening", or "slowdown" or "apocalypse" or whatever you want to call it) starts now or in 2 years or in 5 years, if you signed on for a 30-year-mortgage. Doesn't really matter if I was wrong last year, or I'm wrong now, or I'm wrong next year. We're not talking about a pair of shoes that you can return to the store if they don't fit.
Renting may be so last season, but crushing levels of debt are forever.
Who cares if the rest of the country has already seen a huge housing bust, and the economic repercussions of that are just now starting to be felt? For that matter, who cares if the polar ice caps are melting and in 30 years NYC might be underwater (or at very least, flood every time it rains)? Who cares if the US is facing a huge energy crisis and the last time we had one of those, the world went into recession? Who cares if gas is above $3/gallon, the price of milk in NY went up 20% since the beginning of the year, and we're effectively using up the last third of our national topsoil to make ethanol, choosing to fuel our cars over feeding our families? Who cares that the continent doesn't have enough natural gas to meet our electricity demand and that even if it did, the grid is so outdated, we're virtually guaranteed more blackouts? Who cares that our household savings rate has now dipped into negative territory and the last time that happened was right before the Great Depression?
The big picture is so boring. Concentrate on whether your brownstone has enough period details and whether Brooklyn has enough "cachet" vis-a-vis Manhattan.
Brooklyn real estate is HOT. Pawn your belongings and buy real estate now, before you miss out.
What bubble?
Posted by: sylvia at May 25, 2007 10:53 AM
why would you buy a condo when you have little to no control over how the building is run and who your neighbors are? In a co-op, you have to co-operate with the people you live with, making sure that everyone enjoys their quality of life.
When all those condos turn into absentee-investor rentals, you’ll see maintenance skyrocket and your quality of life go straight down the shitter.
Once a building gets a sizeable number of investor-owned rentals, the only thing that matters is keeping the maintenance low. That means no fresh paint, no new gym equipment, fewer visits from the exterminator, etc. And that becomes a vicious cycle downward. Co-ops avoid this by restricting absentee owners and rentals.
Think of Marty McFly visiting Hilldale in 2015.
Posted by: chuck at May 25, 2007 10:53 AM
i wish you would pack your things and take them elsewhere sylvia.
reading your posts on here makes me realize what a sad, bitter, negative person you are.
truly. get a life. if you sit around all day contemplating the end of the world as you suggest, you really have a very unhappy life and it shows in each and every one of your comments on this thread.
wake up and smell the roses, honey. there is more money in nyc than people know what to do with. it's not disappearing as fast as you might claim. unemployment in nyc is at record lows, wall street in 2007 is expected to gain 10-15% over this past year's bonuses, we are moving towards being one of the greenest cities in the us, mortgage rates are still low, the subprime market stuff seems as though it will not have as bad an effect on the overall housing market, more and more people than ever want to live in nyc. oh, and i don't think we need to worry about "Feeing our families" since 60% of americans are obese.
and believe it or not, some of us derive great pleasure by living/fixing up our homes, taking pride in our neighborhoods, getting involved with the communities we have invested in and trying to make them better places for for our families and the next generation.
you however like to bitch, moan and gripe about everything under the sun.
Posted by: anonymous at May 25, 2007 11:06 AM
interesting discussion, esp. vis a vis the reasons for bklyn's continued strength. i totally agree that manhattan is, every day, a less interesting/desirable place to live than it was yesterday. unless you've got 8 or 10 mil, in which case manhattan rocks. for the rest of us, bklyn looks good. but, in case you haven't noticed, the more bklyn is changing, the more its starting to look (and feel) like manhattan. doubt me? check out union hall this weekend. also, the additional burden being placed on infrastructure (traffic, cops, schools, etc.) is beginning to wear some of the shine off the "bklyn is better cause the quality of life is better" equation.
Posted by: D at May 25, 2007 11:06 AM
i went to an open house in bed stuy/border of clinton hill on greene ave and it was absoulutely packed. there were several offers above asking price that afternoon, from what i understand. this area of brooklyn is doing extremely well-beautiful brownstones which are not yet completely overpriced as in fg/ch a few blocks away. as for the overpriced dorm-like condos all over brooklyn? too many. people live in manhattan if they want to live like that.
Posted by: anon at May 25, 2007 11:17 AM
i wish gas would go up to 5 dollars a gallon.
maybe then we'd actually make some headway on getting some cars off the road.
americans are so disgustingly selfish, and self indulgent.
same reason why we are still in iraq now. if somehow americans lives were being affected by this war, we'd be long gone by now. but since most of us don't feel a thing, we continue to spend billions and billions on the stupid thing.
start acting instead of reacting.
Posted by: anon at May 25, 2007 11:25 AM
11:25, thank you for your very pertinent comment about the NYC real estate market!
Posted by: z at May 25, 2007 11:34 AM
Just want to throw in my two cents...Manhattan (though much maligned on these pages) is actually a great place to live, and not just for the mega billionaire set.
My wife and I (a social worker and a musician) pull down a combined mid-five-figure salary and we love our nabe here in Hamilton Heights (i.e. Harlem.) Very working class, very friendly.
It's worth remembering that Manhattan doesn't stop at 110th Street...
Posted by: Anonymous at May 25, 2007 11:35 AM
Yes, Anon 11:06, you're right. All those local factors you mentioned are spot-on. Brooklyn real estate is hothothot, employment in the city is good, Wall Street is setting records. All true.
And, every factor I mentioned was true too. The local picture looks pretty good, the big picture, not so hot.
So in terms of whether people should buy in Brooklyn right now, I guess it just depends on whether you think NYC can buck the national trend consistently enough for the next thirty years to make a huge mortgage worthwhile. Do you?
Posted by: sylvia at May 25, 2007 11:37 AM
Don't know that I agree with the broker.
We have a glut of condos in the South Slope, Greenwood Hts. area (and more on the way every day...500 units and counting). Prices have been lowered, lower bid excepted and in one case on 16th St (reported on by Mr. B) the developer was willing to PAY THE CLOSING COSTS.
Does not sound like a "hot market" to moi.
Even up the block a prospective buyer for a 675 sq ft. one bedroom condo bid $40K below the asking and got it...
Bidding wars, me think not.
Posted by: lostinbrooklyn at May 25, 2007 11:38 AM
In my area PLG despite the hype the market is NOT hot look at the following 'reasonably' priced listings as n example. Rutland Rd. listed by Brown Harris on market for over 1 mo with a slight price reduction. Sterling listed by Corcran with no reduc. No bidding wars here. The original email to B'stoner is hype from a typical 'new brooklyn white realtor'
Posted by: Anonymous at May 25, 2007 11:40 AM
bidding wars depend on listing strategy. For instant a-heubenor lists well below market in order to drag buyers into knock out fights with each other. I am sure their success at this has not been lost on some other brokers.
nevertheless spring is here and the market is usually hot in spring. What will it be like in august?
Posted by: Anonymous at May 25, 2007 11:45 AM
Hasn't that been the case for PLG for years now, always on the cusp but never getting the bidding wars that other brownstone nabes have gotten?
Posted by: Anonymous at May 25, 2007 11:47 AM
yes, sylvia i do think that making a mortgage payment for the next 30 years is a solid choice. your selection of the word HUGE mortgage payment, i do not agree with however. i think one should stay within the confines of their income, etc and buy an appropriate dwelling based on what they can afford comfortably. that's what i did and my mortgage payment is less than what a comparable place in park slope rents for.
i do not advocate taking on a "HUGE" mortgage unless one can afford a huge mortgage. goes back to the comment about how self indulgent americans are.
and in 30 years (probably less as i pay more than the monthly payment whenever possible) when all is said and done, i will own my home outright instead of reading brownstoner complaining because i made my landlord rich as hell.
Posted by: anon at May 25, 2007 11:47 AM
Shorter Sylvia: "I'm just so mad about everything in the world now! And it's all gotta be connected, if only I could figure out how!"
Seriously, you want to explain how lower housing prices in Brooklyn will somehow reduce national energy consumption, reverse climate change, and, I don't know, I guess end the war in Iraq and reverse the 2000 election recount?
Posted by: Anonymous at May 25, 2007 11:49 AM
PLG was super hot in 2001. We bid 15% over the asking for one house and didn't get it, and then bid 25% over asking on the next house and got it. Each house was priced higher than the one before. But 11:40 is correct that the current market in Lefferts Manor is pretty tepid. There was a huge burst of activity in early spring and then everything stopped. Now there are a number of houses that are sitting around and even some reductions.
Posted by: bd at May 25, 2007 12:02 PM
The broker who made the comment is quite established and works primarily in Park Slope, Fort Greene and Clinton Hill.
Posted by: Brownstoner at May 25, 2007 12:08 PM
As always, it obviously will depend on the market concerned (type of dwelling and location). From the comments, a lot of Brownstone Bkln markets are doing well, while some are not as robust. Not my posts adds much, but hopefully will provide perspective and keep people from getting too ornery in their responses to each other... Have a nice Memorial Day Weekend everyone and enjoy the weather!
Posted by: lp at May 25, 2007 12:17 PM
Allrighty then, anon 11:47. If you're comfortable with your choice, that's great. Just don't make the mistake of assuming that everybody else in the country can just take on more debt, stick our heads in the sand, and keep on happily trucking into the future, our jobs and homes and quality of life somehow miraculously insulated from the larger forces at work.
Anon 11:49, what on earth are you talking about.
Re: the difference between the market in PLG/South Slope and trendier neighborhoods, could that just be a reflection of the growing gap between the rich and the poor in the city? I'm sure the Wall Street guys making record profits don't really care if the price of milk goes up by 60 cents, but not everyone else is so insulated from the cost of living...
Posted by: sylvia at May 25, 2007 12:19 PM
i attribute a lot of this hot market to an extremeley well oiled pr machine when it comes to brooklyn in the past year or two especially.
the lonely planet thing, the music and arts world really being priced out of manhattan and taking up shop in brooklyn as well as the comment that someone said about brooklyn being more of a destination instead of a overflow borough.
my friends come out and see my new place in park slope and they all FALL IN LOVE. i expect many of them will move to brooklyn in the coming years.
some simply had never been or had no clue that it was as nice as it is.
Posted by: anon at May 25, 2007 12:22 PM
I don't know if the market is exploding again or not. My wife and I were prospective buyers towards the end of last year, and even had a couple of offers accepted only to fall through before contract was signed. Realized at that point, I wasn't willing to pay what many people were asking. I thought then and still think now that the market is overpriced. That does not mean that the market is in for a correction or a decline, it just means that the numbers people are paying for certain houses are not justified in my opinion (my opinion only - I am not trying to convince anyone to follow me, so you don't have to argue this point). Houses coops and condos might continue to increase, but I have yet to see any substantive economic data to support the price increases in New York. This doesn't mean it can't and won't be be sustained; it just means that something influencing the market in NYC has changed. Many houses that were affordable to families that make a good income (top 15% in NYC) are longer afforable to such families and the neighborhoods do not exactly make you feel like you are living on Park Avenue. Hopefully, many of the original people who grew up in such neighborhoods and made those neighborhoods into great places to live are able to benefit from the price increases. As for me I am going to rent, and enjoy a better quality of life. One piece of economic data is interesting on this point, existing home sales for April showed a greater decline than anticipated, and the Northeast, for the first time, showed the greatest decline for location.
Posted by: Who knows at May 25, 2007 12:50 PM
the northeast also showed (by far) the greatest increase in new home sales per the data released yesterday. 20 something percent increse, in fact.
the existing home sales number was down 2 percent-ish if i'm not mistaken.
the factor you are not including on the nyc real estate situation is that from my experience i have simply noted that a ton of people want to live and move to new york city.
i have friends all over the country who all they talk about is wanting to move here. now that the city has cleaned up crime (quite quickly, i might add) and improved the quality of life, even the announcement of the taxi fleet turning hybrid has a ton of people excited about new york. it's a great place to live. as the suburbs and rural areas become more and more sterile and bland, the greatest city in the us well undoubtedly become more popular. what we are in is a reversal of the white flight to the suburbs from decades ago.
i believe it explains a lot of what is happening right now.
people like to complain about all the kids/strollers in park slope, but you know what...seeing that many children in an urban city like new york is relatively rare pre-1990 and is a VERY good sign of a healthy city and neighborhood. these are people who would normally have left for the wealthy burbs in jersey, ct, westchester, etc and are now, in many cases staying. they are the baby boomer generation which has a TON of money and are seeing their portfolios rise by the day.
things are different now, as much as people like to say otherwise.
Posted by: anon at May 25, 2007 12:58 PM
Would the person who's so happy to be living in a coop please explain why so many people are voting with their feet and buying condos? Why do so many people (smart, market-savvy people) eschew coops for condos? Are they all stupid? (Pride goeth before the fall..)
Posted by: Anonymous at May 25, 2007 1:00 PM
they are moving into and purchasing condos because the new shoddy construction that is being built these days are, for the most part, condos...not co-ops.
quite simple, actually.
as i said though, to each his/her own. for now, the rest of the 75% of nyc homewners are on my side, so until your condo's got numbers like that, i feel just fine about it.
Posted by: anon at May 25, 2007 1:06 PM
here's another reason and i guess my 75% figure was off:
"In New York City, 85% of all apartments available for purchase (and almost 100% of pre-war apartments) are in co-operative buildings."
since this is a site about brownstones and loving old architecture, i think this quote speaks for itself in why i prefer a co-op over a condo.
i like pre-war. plain and simple.
Posted by: anon at May 25, 2007 1:09 PM
condo monthly maintenance costs are not tax deductible.
in a co-op, these charges are deductible.
Posted by: anonymous at May 25, 2007 1:13 PM
please sylvia, stop posting here. Too much reality and perspective is not good for the brownstoner crowd.
Posted by: em at May 25, 2007 1:50 PM
"Who knows": It's possible that the market is overpriced, but it's also possible that your expectations are over-reaching your capabilities. Maybe you simply can't afford a house yet. And one day, when you can, you will look around and think the market is just right.
Posted by: Anonymous at May 25, 2007 2:19 PM
So much mis-information! Most of the condos around Brooklyn (and Manhattan) are new and benefitting from R/E tax abatements and so have unusually low total maintenace costs. And being new, they also may have no capital projects costs (yet). Co-ops, more often older buildings, are paying full freight on R/E and have to have a healthy reserve fund for capital projects. The only part of the monthly maintenance in a co-op that is tax-deductible is the interest expense on the underlying mortgage (if there is one -- most do have them, some bigger than others) and R/E taxes.
As to the price -- most of the condos are new "luxury" buidlings, while co-ops range from Mitchel-Lama to Park Avenue -- a wide range in terms of "average" so comparisons are moot.
Posted by: Anonymous at May 25, 2007 2:22 PM
I have sold at least four brownstones in the footprint of Atlantic Yards because the owners were convinced (erroneously, in my view) that post-Atlantic Yards depreciation was inevitable. Friends of mine who are brokers relate similar stories. It's weird what's happening right now.
Posted by: B. Roker at May 25, 2007 2:23 PM
My take on my limited experience seeing coops condos in my area.
And these are all small buildings I'm tlaking about - I would not generalize to elevator or larger or even medium sized bldgs.
Coops take much better care of outside and people who live there seem to take more pride.
Condos buyers (and may be because they are younger) take no responsibility - places are more litter filled, don't pick up flyers, front of buildings begin to look shabby. They have 'renter' mentality.
Posted by: Anonymous at May 25, 2007 2:31 PM
that is weird. especially since all the original arguements were that ay was going to speed up gentrification, thus price appreciation, not the opposite.
weird indeed.
my how people change their tunes like the wind around here.
also, how is it that properties are still exchanging hands within the footprint of ay, btw? doesn't the footprint imply that this is the construction zone for ay?? pardon my ignorance on this.
Posted by: anon at May 25, 2007 2:32 PM
I have seen a definite turn around in the real estate market in bklyn within the last few mnths. take for example the suite 16 condos in park slope, the washinton in Prospect Hghts, the clermont in Fort Greene etc. etc they have all had to make price reductions becuase the units weren't moving.And look at all the new stuff popping up now.Just adding more inventory.
Of course for obvious reasons a broker would say otherwise.
Posted by: 2:29 at May 25, 2007 2:32 PM
interesting how all the comments about stuff having price reductions or not selling are the crappy new construction condos and the ones i see selling within a week are either the brownstones or co-ops in the older buildings.
seems the comments above are a testament to that as well.
Posted by: anonymous at May 25, 2007 2:37 PM
Vis-a-vis.... just had to say it too.
With the median home price being in the mid 200's for the rest of the US, I'm not so sure that even if 50% of Americans wanted to move to NYC, they could.
I've been to several open houses at new condo's recently. There were lots of nice people, but I notice that they aren't exactly flying off the shelf. My favorite was the broker telling me that offers needed to come in above ask for one apt as there are multiple bids on it, but that apt is still on the market. I'm wondering how many people are getting told no, when they go to the bank.
I can't figure out what's going on with housing. I especially can't figure out how everyone says this will be a great year for bonuses on wall street, while forecasting a major credit crunch across the US. I figure last year's bonuses gave a nice shot in the arm to real estate in NYC, but did it just delay the downturn experienced by the rest of the country?
Oh, and I'm looking at Condos because of the high down payment required for co-ops. My dad may have 300k to plunk down in a co-op, but I sure don't. Even if I did, I'm not sure a co-op is the best place to hold that cash, tremendous opportunity cost for capital if the market doesn't continue to grow at 10% a year.
I'd love to buy a place in Manhattan or Brooklyn, I love the city but looking at historical prices I don't know if the price per square foot is stable. I earn high 5 figures, and as a new comer it seems that I'd have to work on wall street to afford a one bedroom. The level of risk just seems too high for my sanity.
Posted by: That Guy at May 25, 2007 2:41 PM
That guy I totally agree with you. I have been to several open houses and heard from the broker that contract are out on apts. Only to see those same apts pop up for sale again weeks later. This brings me to another point- why are the real estate brokers so "dishonest" lately? Is it a sign of desperation?
With regards to the issue of the credit crunch, I think tis is going to take away a substantial protion of the buying market as the whole effect is sort of domino. Sellers can't find first time buyers to buy their apts so they can't move up etc. etc.
Posted by: anon at May 25, 2007 2:54 PM
a problem i see is that many people in nyc live very extravagant lives. it is not NECESSARY to buy a 750K one bedroom.
if you really really want to buy, find a 300K studio and work your way up. You may need to live in a smaller than perfect space, but if you plan to make New York your home for some time if not permanently, it is the way to go if being a homeowner is something you value.
i don't give into the mentality that everything is too expensive, etc.
i make in the mid 5 figures and just bought a really lovely amazing studio in historic park slope.
love it. wish it were a little bigger, but i'll work on that in a few years, if i can and if the market allows.
Posted by: anonymous at May 25, 2007 2:54 PM
Actually Suite 16 and The Washington have increased prices.. Get your facts straight.
Posted by: Alan at May 25, 2007 2:56 PM
That Guy - I agree, if I did not have a significant down payment and made only in the (respectable) high five figures, I would not be buying. Most people buying these places make multiples of that.
As for Wall Street, the increase in bonuses forecast this year is for I Bankers doing deals, of which there are plently. In other years, it migh be more heavily weighted on equity traders, or fixed income traders. Some sector on wall street does well regardless depending on the way the economy affects their particular market.
First year lawyers in the top 20 or so firms make $145 to $160 base salary. Crazy, I know, but those are the people who are buying the expensive condos.
I think the comment about the differences seen in new condo pricing vs brownstones and apartments in old converted or established old building is a telling one.
Posted by: Anonymous at May 25, 2007 2:57 PM
Actually Suite 16 has reduced the prices on several of the unitss. i was there last Sunday. As did 515 in park slope.
Posted by: anon at May 25, 2007 3:02 PM
11:06, you're wrong - if you go to union hall this weekend you won't get a true picture of the asshole magnet certain parts of brooklyn have become, because many of said assholes will be in the hamptons. god bless them.
as for the hot-or-not question - its simple draw an imaginary line around certain neighborhoods that are established, mostly white or heading that way, and a relatively short commute to manhattan, and you'll find the properties where people are paying more than ask. beyond those hoods, in places like plg, kensington, greenwood/southslope etc, prices are still much, much higher than they were five years ago, but you can bargain with sellers/sponsors, and new condo developers will often pay transfer tax.
there. done.
Posted by: Anonymous at May 25, 2007 3:12 PM
I am a real estate professional. Let me say that the market controls the market.
Arather obviious observation. It's kind of like how do you lose wight, of course stop eating. Of course. the market has slowed down. outside of this little site
the world says their is a slow down. No more bidding wars, things on market longer, price reductions across the board. now, you can hype a back parlor stock, but you just can't hype real estate. I might add, that if you already own and aren't going to swll, move, need money, yur will be fine.Soon it will be a buyer's market.
Posted by: Anonymous at May 25, 2007 3:28 PM
I don't know what the median income in Brooklyn is, but 50k salary gets generously 4k a month. Given 2k in home payments a month, on a 6.5% interest rate and 25k down someone can afford 250k apt... There are magic loans out there, but the whole thing just seems prohibitively expensive for the average person. Even the average person making 100k.
If the market starts to require buyers to be making 200k, even as a couple, to afford the bottom of what two people need (a one bedroom) at 50% of income, I think that points to problems.
I can rent a nice one bedroom in Manhattan for 3k a month, but if I wanted to buy I'd be looking at 5-6k month. I'm not sure it's worth stepping down in quality to take what I consider to be a decent risk in this market. The rent to own ratio for monthlies in Brooklyn are similar, but scaled down from Manhattan.
It's a tough call as a buyer at the moment, at least for me.
Posted by: That Guy at May 25, 2007 3:35 PM
Anonymous 2:19pm. Maybe my statements would be more easily understood if I was looking over my head, but sadly I am not. I actually can afford to buy something. I make a very good salary as a commercial litigation attorney. I just appear to be one of the few people who just because I can afford something doesn't think the property is worth the asking price.
My opinion is if Bill Gates looks to buy something in Park Slope or fort greene or Prospect Heights, and finds a brownstone he likes, and offers $100 million to buy it that doesn't make the property worth $100 million.
Posted by: Who Knows at May 25, 2007 3:57 PM
The argument by many that th real esatte market cannot go down is rather absurd. The market has had a record increase over the last decade, and yet the increase is not matched by any unedrlying economic data.
Nonetheless, I see many arguments on this site trashing people for saying the market is overvalued or g*d forbid saying the market needs a correction.
This amuses me the most, because it reminds me of many of the same baseless and strong-arm arguments made before the US went to war in Iraq. Also similar are the arguments, which try to scare you into purchasing something, because you won't be able to afford it in three years. Kind of like stating you need to give up your liberties, because there are people (who we don't know and can't identify) out there right now who are planning to hurt us.
Now before anyone gets in a hissy fit, I willingly acknowledge my examples are far different on many levels, including importance. My point is only that the arguments and reasoning for each are extremely similar.
Posted by: Amused at May 25, 2007 4:11 PM
"I can rent a nice one bedroom in Manhattan for 3k a month, but if I wanted to buy I'd be looking at 5-6k month."
that's really not true. a manhattan 1BR comparable in quality to a $3k rental goes for around $750k. put down 20% and you get a $600k mortgage. at 6% that's around $3,600/month in total (assume maintenance payments and interest deductions are a wash). there's a gap between renting and buying, sure, but it definitely isn't a 2:1 ratio.
i agree with the more general point that there are good reasons to rent rather than buy. but the higher cost of buying is often overstated.
Posted by: z at May 25, 2007 4:14 PM
FYI... to those who are assuming a place is still on the market after the broker told you it's not, many times they leave the listing on line until the closing- it may be in contract. I've seen this several times. Your perception that it's still available (and thus your assessment of the market) may be wrong- try calling to find out if it's actually available before assuming you were lied to.
Condos vs. coops: not all condos are new construction. Mine is in a small 1920's Park Slope building that was retrofitted. The units are occupied by working professionals. None have a "renter" mentality. It's well-run and just has less rules and common fees than coops.
On the comments about how only "white" neighborhoods are doing well- I live between 4/5th aves in Park Slope, and the block is very diverse. There are numerous Hispanic, African American, Asian, Caucasian, etc. people, ranging in age- families, elderly, young professionals. And, the market is quite strong in this area. Just sold my condo FSBO in 5 days for asking price.
Posted by: Anon at May 25, 2007 4:16 PM
You're right... wow, I can buy for the same price as renting if I put enough down.
Now I just need to find that 150k that I put in my back pocket.
If I did have 150k, the opportunity cost is 7,500 at 5% a year to sink it into a place. That adds an effective 600$ a month cost to the place if it doesn't appreciate.
I'm just saying I can't figure out what's going on, and for the median New York City income, it has to be rough, even for the 75th percentile income. Perhaps I'm just an Ohio boy that isn't used to 50% of the population making 100k.
Z you're right, it isn't 2:1, but it is enough to give me pause. That's all I'm saying.
Posted by: That Guy at May 25, 2007 4:28 PM
Z, you are completely off base on your assessment that a $3000 per month one bedroom rental in Manhattan will cost $750,000.00 to purchase.
Most studios in Manhattan are going for $400-$700,000.00. The one bedroom apartment would probably be closer to $1 million and as That Guy correctly pointed out, you still need to have $200,000.00 lying around somewhere.
In addition, even assuming your numbers are correct, $600 per month difference is a big deal, that means $7200 more income needed after taxes. It would require a major sacrafice to buy something in a rather tenuous market.
Posted by: Amazed at May 25, 2007 4:38 PM
The median income isn't that relevant here as elsewhere, because the spread has such wide gaps. The top people make so much more than the rest of us. That's basically it- get used to the prices or move on. I'm moving to a less expensive city this summer.
Posted by: Anon at May 25, 2007 4:38 PM
4:38, beg to differ. you're wrong because a $3k rental is not at the high-end these days; it's just ok. non-fancy 1BRs are not $1mm, even at today's high prices.
by way of illustration, check out the corcoran listing below which is available for either rental ($2,500) or purchase ($650k). this is not atypical.
no argument here that coming up with a downpayment is tough -- i know that from personal experience!
i won't derail the thread further by engaging on the opportunity cost points -- suffice it to say that the points are fair and that there are fair counterpoints as well (interest deduction, leveraged appreciation, etc.).
http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=829341&ohDat=
Posted by: z at May 25, 2007 5:53 PM
For what it's worth. I've been bidding in the 2 million range for 8 months. Bid under asking 3 times and lost. Bid at asking 3 times and lost. Just bid 100k over asking and lost! Holy Shit! This is insane. This were all Boerum Hill, Park Slope, Carrol Gardens rowhouses and a Heights condo. Were they overpriced? In my opinion, yes, but if I want to live in the area and not drive in from the suburbs, I don't have a choice. It's f---ing madness,
Posted by: Anonymous at May 25, 2007 6:28 PM
The thing many are missing is that there are 10's of thousands of people (if not more) in NYC who arent Investment Bankers or Hedge Fund guys who make well over 150k+. They are more or less regular people - they have to go to work everyday, they have bosses, aren't "executives" but do fairly well (but are barely upper Middle Class compared to the rest of Nation in terms of lifestyle). Those people are priced out of Manhattan but want an urban lifestyle - so they choose Brooklyn. I know its popular to bash everyone buying 750-1.5M condos and Brownstones as "rich" a$$holes. But the reality is in NYC/Manhattan plenty of middle-management types make a 150+ salary.
Posted by: Anon at May 25, 2007 7:34 PM
That Guy - I think you're spot on.
Only wrong comment is 50K doesn't get you 4K a month - it gets you around 3K a month with taxes etc.
I too have thought about buying, but for what I'm paying in rent for a 2 bedroom I could only get a studio and at this point in my life I'd rather have space than equity.
Posted by: Anonymous at May 25, 2007 7:47 PM
I was just trying to be generous to the opposing point of view.
I guess it's just expensive. A real estate doubling since 2000 (roughly) gives me pause. If incomes didn't double, it could be trouble. I guess that's all I'm trying to say. Of course I just got my 10% rent increase notice, so perhaps making the stretch to buy isn't THAT bad either. Just scary.
Posted by: That Guy at May 25, 2007 8:26 PM
Everybody wants to move to NYC, I think we can take that as a fact. Now here is my plan: As we know from exist. home sale numbers, those millions of people moving here wont be able to sell their houses (8.5 month supply etc.), never, nada. I will rent for a while here in NYC, and when everybody is here I just move away and snap up one of those empty homes. or maybe two..or three..?for next to nothing. i cant live in NYC then, but thats overrated anyways, so who cares. what you guys think?
Posted by: WW at May 25, 2007 8:35 PM
I think either you should study remedial english or sober up
Posted by: Anonymous at May 25, 2007 9:07 PM
There has been no price decrease at suite 16.... We made a below ask offer and it wasn't accepted, they came down only 10K on our offer, but we are happy with our purchase.
Posted by: Alan at May 26, 2007 1:41 AM
I bought my house 2 and a half years ago but am addicted to this site and to following the market. I am really astounded at the prices now. My happiness about it has morphed somehow into being amazed and puzzled. But the truth is that the market moved from a lower number of sales at stable prices late last year to an escalation which seemed to pick up speed at the beginning of the year. This is a hot topic for everyone and we don't seem to tire of talking about it. In my humble opinion, the housing stock in Brownstone Brooklyn is just stunning, knockout beautiful, the streets are charming and the low rise world we inherited is human-friendly. There are so many advantages to living here that it doesn't surprise me that the spike in RE prices in Manhattan prompted a real estate revolution in Brooklyn. I am hopeful, I am happy here and am not worried about a downturn. BUT...... the explosion of new building will spill many new units on to the market within the next 2 years. I have had conversations with people who sincerely believe that the brownstone market, inherently fabulous and desireable, will not be effected by this. At some point, potential buyers will start weighing the advantages of the new housing available and potential tenants will also have a lot more housing choices. I am not particularly worried since I am in this for the long term, but at this point, I am not beating the drums for continued price increases.
Posted by: donatella at May 26, 2007 11:40 AM
6:28 you are not too smart if you bid under ask in the most desirable neighborhoods in brooklyn. Even bidding at ask is worthless in this market. What real estate cycle are you living in? Open your eyes.
Posted by: Anonymous at May 26, 2007 12:33 PM
Yeah... bid over ask, by alot... Whatever the seller is asking + 10% minimum!!! That way I can pay the realtor with the buyers funds, oh wait, I already do that.
Posted by: Anon at May 26, 2007 4:21 PM
4:21 haven't bought much in this cycle huh?
Posted by: Anonymous at May 26, 2007 6:43 PM
We own a house in PLG's LM and I have to confirm too that there isn't a "hot" market here right now. But I don't think it's lack of interest. We have heard from several friends in other parts of Brooklyn in the last month or two, who say they want to come over and check out LM, b/c they're starting a house search. But remember the LM inventory is small. There are not many properties on the market at any given time. The ones mentioned above are larger houses that are already fully renovated, in which case brokers shoot for the moon, and hey why not. But the people most interested in PLG right now, of which there are plenty from what we've seen, can't spend quite that much. As for the smaller, more moderately priced houses like more people want, there are some aging, lifelong homeowners who will be selling sometime in the next couple years. I personally know of a couple such houses, that have been lovingly cared for over the years, though aren't high-end renovated so the prices should be decent. BTW, because a neighborhood, whether this one or others, doesn't have lots of bidding wars that's not necessarily a bad thing. These places attract a unique kind of people, we've found. More off-the-beaten-path types. And of course, that's what original Brownstone Brooklyn was. Those who chose Brooklyn over Manhattan back in the day.
Posted by: Anonymous at May 27, 2007 3:42 PM
I sell and list mostly high end brownstones in Park Slope and surrounding areas. I personally listed three houses for sale in the last two weeks. All have offers and contracts out and most went comforably over asking. The objective is to properly price for the market. One a whole, the houses that sit are priced by inexperienced individual brokers who don't know the market because they rarely sell them and when they are lucky to be the listing agent on a high-end home, they price way higher than the current market. Sellers do a personal disadvanatage by not listing with large firms who co-broke their listings. Small firms do not get the draw and the high income buyers from NYC. More importantly, the small firms do not work with outside firms (co-broke). They may charge a lower commission but lack the experience and inventory of recently sold homes so they can't provide an accurate assessment of a home's worth---big problem for high-end sellers. Currently, if a house is on the market more than two weeks without a deal it is overpriced.. Good houses have multiple bidders at or above asking.. The market is Park Slope and Prospect Heights is stronger than I have seen it in the last two years..
Posted by: A Broker at Big Firm at May 28, 2007 9:59 PM
Houses (brownstones) and condos are two different markets. Too many people here consier them one and the same.
Posted by: anon at May 29, 2007 8:09 AM
So true, 8:09am. People don't always get that. One always sees people here exclaim at a high-priced condo listing, "but they could buy a house for that!"
Different buyers, different needs, different tastes and lifestyles.
Posted by: Anonymous at May 29, 2007 1:28 PM
The condo vs. coop issue is a big one and a lot of the key factors have barely been mentioned here, including:
-Financing: Many coops require higher down payments, greater financial reserves and higher incomes than condos, where if you can get a mortgage you can buy the unit. I know of several people who make good incomes but felt they could not pass a coop board review - or did not want one prying into their finances. Of course, this also means that many coops may be financially more stable.
-Restrictions on renting/pied a terres/parent buying for child: Younger people are also often more interested in condos because they need the flexibility in case they need to transfer for work, change their domestic situation, etc. Obviously, some owners don't need this flexibility and don't appreciate the "transient" feeling that renters can add to a building. However, it is also important to note that many condos have some restrictions on rentals, and many retain the right to approve tenants plus charge large fees to discourage frequent turnover.
-Type of ownership: Some people are uncomfortable about owning shares in a coop as compared to owning property outright. I'm not an expert in this area but have heard that if one coop owner encounters financial problems leading to foreclosure, liens, etc., there is a greater impact on co-owners than with a condo. I don't know if this is really true though.
Resale: The price differential has been discussed pretty thoroughly here, but the need to get board approval has not. If you may need to sell quickly, some boards can make the process difficult. And again, this could be considered an advantage by people who want the ability to screen one's neighbors.
Finally, the higher incidence of coops to condos is not really evidence that coops are "better;" instead, it is more a result of coops being the easiest way to convert rental units to an ownership model. You pretty much do not hear of any new construction units being sold as coops today. That being said, people who are exclusively interested in prewar buildings will find few condos available, and those that are will probably be priced at a premium.
Overall, the greater flexibility offered by condos gives them a broader appeal that has made them more popular today - and also enabled a price premium. However, for buyers with certain needs a coop certainly can be more attractive. So chill out everybody!
Posted by: eeeck at May 29, 2007 4:28 PM
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