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July 24, 2007
REBNY: Prices Up Across the Board in Q2
The Real Estate Board of New York's quarterly residential market report was released yesterday. The bottom line? Almost every type of residence in every borough of the city rose in price in the second quarter of 2007 versus the same period in the prior year. Not surprisingly, according to REBNY, Brooklyn had the highest median and average prices of the four outer boroughs. The median price of one- to three-family houses in Brooklyn rose from $562,000 to $605,000 while the average price was up from $612,000 to $671,000; median price per square foot increased from $313 to $346. The median price of a condo jumped from $467,000 to $545,000 while the median price per square foot went from $454 to $572. Co-ops had the weakest relative performance: The median price of a co-op rose modestly from $255,000 to $260,000 while the median price per square foot increased from $372 to $398. Do these numbers sound about right to you?
NYC Co-op, Condo sales prices rose 8% [Crain's]
City Proving Immune to National Housing Slump [NY1]
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Comments
It's not clear what these numbers really mean. An alternate explanation is that the high-end properties in the more expensive neighborhoods continued to sell, while the less expensive properties sat on the market. That's the beauty of average sale prices. It doesn't necessarily mean that prices were rising.
Posted by: Anonymous at July 24, 2007 9:18 AM
These are median prices, not mean. Median is the middle price, not the average so having the more expensive properties go up won't impact it.
This report also shows both median sales price as well as median price per square foot which is usually a better indicator.
So it is pretty clear, prices are up.
Posted by: Anonymous at July 24, 2007 9:24 AM
9:24, I think you misunderstand the implications of median and mean.
Yes, median is the middle price. However, if only the high-end properties are selling, then the mean, the median and the price per square foot can all be rising, even though the value of any individual apartment may be falling.
For example, if there were 10 properties on the market, 5 priced over 2 million (on Prospect Park at 800 a square foot) and 5 priced under 1 million (in Red Hook at 400 a square foot), and only those on the park sold, it would create a very high mean, median and average price per square foot, without giving any indication of whether prices were actually rising or falling.
Posted by: Anonymous at July 24, 2007 9:34 AM
What's your basis for saying that only high-end properties are selling now?
Posted by: Anonymous at July 24, 2007 9:59 AM
Would also help if they mentioned # of sales in each of the categories. That is also indicator of a strong/weak market.
Also, the median price of a 1-3 family house in Brooklyn at $605k shows that there is big part of Brooklyn outside Brownstoner area that we easily forget about. And demand for that housing is just as strong if not stronger than Brownstone Brooklyn (or Manhattan for that matter).
And when you look at citywide figures, NYC doesn't end up sounding so much more expensive than other major cities.
Unfortunately, the media likes to only compare Manhattan prices (and often Manhattan prices they quote are below 96th St) to other cities (SF, Boston) - sounds so much more sensational. But they wouldn't take most expensive part of SF or Boston and use as comparison - as in comparing Pacific Hts to Manhattan or Beacon Hill.
Posted by: Anonymous at July 24, 2007 10:08 AM
yes 9:34, I understand it exactly. These are statistics, they never tell the whole picture, it's always possible to find properties rising and properties falling.
So gather all the data points that you can and draw your own conclusions.
What I'm seeing is that prices are continuing to go up in most areas. If you have some meaningful data to point to the scenario that you describe then please share it.
I have not seen the scenario you describe happening in Brooklyn. I'm not saying it isn't happening or that it can't happen, I'm just not seeing it.
Posted by: Anonymous at July 24, 2007 10:18 AM
personally, i see things sitting for longer at ridiculously high prices because sellers are reluctant to readjust their expectations. as for the sales, these generally seem to be at or below ask. it's hard to know what that means (as the sale price may still be relatively high), but there's definitely not the same frenzy as there was a few years ago.
aside from the wealthy foreigners buying in the luxury market, i don't see any reason why NYC should be immune to national trends. nor do the banks foreclosing on houses in outer Bklyn and Queens. and given that NYS's bankruptcy laws are very protective of homeowners, it's only going to get worse as we catch up to where the rest of the country is.
Posted by: anon at July 24, 2007 10:23 AM
The REBNY numbers are incomplete. From today's NYPost:
"While residential real-estate sales in Manhattan continue to hit record levels, the numbers in Queens appear to be mirroring the rest of the nation's housing slump."
http://www.nypost.com/seven/07242007/news/regionalnews/harsh_realty_in_qns__regionalnews_braden_keil.htm
Posted by: Anonymous at July 24, 2007 10:31 AM
There are a few differences between NY and the national market. The foreign investors is one of them. Currently the dollar is very weak making investment here very attractive to those in Europe and Asia. If these people are going to buy real estate in the US they are going to do it in NY and more specifically Manhattan. These people are not buying in other parts of the country or at least not at the same level.
The other one is that it takes a long time to build here. Land is scarce, large projects need years of approvals before they can be built, etc. In other parts of the country that are getting hit hard it is due to over building. When you can just buy more farmland and throw up homes over night it's much easier to let supply get out of whack with demand. This can still happen in NY but it takes a lot longer.
Over supply is the main reason that places like Vegas and Florida are doing poorly and bringing down the national numbers.
I think the above reasons are also why we see that Queens is not doing as well. It's easier to build there and the foreign investors are not helping to support that market.
Posted by: Anonymous at July 24, 2007 11:04 AM
Re: 11:04 --
your thoughts on why Manhattan is different than Queens (foreign buyers and land constraints) make sense... but I don't think that Brooklyn is all that different from Queens. there may be some trickle-down from the luxury market into certain parts of Bklyn (same way LIC condos are holding up when the rest of Queens is not), but there will be a drop in the further out sections of Bklyn. And have you notice how much stuff has either been built or converted into residential in Bklyn over the last few years? Tons of new supply...
Posted by: anon at July 24, 2007 11:25 AM
you forgot one important point about why nyc continues to do well compared to the rest of the country.
because people still want to, aspire to and are moving here!!!
this is not the case with middle america. unless you're portlant, seattle, san francisco etc...the young professionals in this country want to live in new york.
as long as nyc stays on track with crime, quality of life, etc this will continue to be the case. and these young professionals will also continue to procreate here instead of moving to the burbs like they did 10 years ago.
combine that with the fact that to even buy a co-op in this city (which still makes up like 90% of the housing stock) one must have quite a bit of money in the bank. the fact that nyc continues to do well means that a lot of new yorkers have some bucks.
the people who say that nyc is no different from the rest of the country either a. have no bucks or 2. are completely oblivious to the fact that a lot of people here have a ton of bucks.
Posted by: anon at July 24, 2007 11:41 AM
First, the market started to drop in NJ, LI and Westchester and we heard "NYC is different than the suburbs."
Now the market is dropping in Queens and Staten Island and we hear "Manhattan and Brooklyn are different because X,Y,Z."
Next it'll be "Below 96th and Park Slope/BH are different from rest of Manhattan and Brooklyn because..."
People are stupid.
Posted by: anon at July 24, 2007 11:51 AM
I can't wait til Spitzer breaks up REBNY and exposes the web of deception and propaganda they've built their reputation on.
It's coming and the truth about the NY RE market will blow your minds.
Posted by: Anonymous at July 24, 2007 11:53 AM
how long will that be 11:53?
probably about the same amount of time it's been since you've been praying for (and predicting) the demise of the ny real estate market?
bitterness is not very attractive, you do realize?
Posted by: anon at July 24, 2007 11:55 AM
i wish people got HALF as pissed off about the deception and propaganda that our president and government have subsisted on as they do about nyc real estate prices.
what's a measly war and an increase of a few degrees when we have REBNY to be held accountable!!!
Posted by: anonymous at July 24, 2007 11:59 AM
If you are a flipper, or you plan to sell within the next 3 years, then you should pay attention to these kinds of reports sure, you might have reason to be wary. But if you're buying a place to live for 5 years or more (or for your whole life) then who cares what happens to the real estate market in the near future. Seriously, who cares. Over the long term, it will always be a good investment in NYC. Not even the most conservative investors dispute that.
Okay everybody back to work and get on with your day.
Posted by: Anonymous at July 24, 2007 12:29 PM
Re: 12:29
Non-flippers care about these reports, because it helps to know whether to buy now or to wait until prices drop significantly. Given that right now the cost of renting is usually much less than the carrying cost of a comparable apt, there's very little reason to buy if there are strong indications that the market is going down. Buy cheaper next year...
Posted by: anon at July 24, 2007 12:35 PM
The talk to prices going downward blah blah blah blah, it ain't gonna happen In NYC. In any market place prices are set by supply and demand, this in NY demand is always increasing. Only thing that's gonna slow it down is when the big banks stop giving out mortgages..This is NY if you can't afford a house keep renting cause house prices will keep rising disproportionate to your paycheck.
On second thought, the only prices that are gonna fall is thos over priced Brownstones in you know where, so if you wanna buy a brownstone just wait...
Posted by: Maria at July 24, 2007 12:59 PM
yeah...the brownstones....those are gonna go down, but those beautiful new condos being erected with plywood and duct tape....THOSE are really going to hold their value well!!!
Posted by: anon at July 24, 2007 1:15 PM
"Only thing that's gonna slow it down is when the big banks stop giving out mortgages."
um, yeah, i think what's in the newspapers lately. sub-prime collapse, tightening mortgage standards, investigations of appraisal fraud, foreclosures now hitting the prime mortgages, etc. all of that reduces easy credit and liquidity, making it harder to get a mortgage.
not to mention that interest rates are the highest they've been since 2002.
Posted by: anon at July 24, 2007 1:23 PM
From 10:31's NY Post link,
"The North Shore showed the largest decline in overall prices but was the only market to show an increase in the number of sales."
REBNY conveniently left out changes in numbers of sales.
Buy a home if you are very wealthy or have found a "steal" (-25% prevailing asks or better). Don't buy because you are misinformed.
Who is the REBNY? Answer: http://rebny.com/about_who_belongs.jsp
Posted by: Anonymous at July 24, 2007 1:24 PM
by the way folks....its a GOOD thing that banks are tightening on mortgages. not bad.
mortgage companies should not allow those can't afford homes to purchase ones. it's called looking out for your fellow human beings and not just about your own selfish interests. there is more to life than home appreciation.
Posted by: anon at July 24, 2007 1:31 PM
12:59 watches a lot of CNBC but hasn't read...
www.youdovoodoo.com/80sbubble.htm
www.stock-market-crash.net/
www.nychousingbubble.blogspot.com/
Posted by: Anonymous at July 24, 2007 1:37 PM
1:37 watches a lot of tv and reads a lot of blogs apparently, but doesn't like to own property....
if you base your attitudes about nyc real estate on the blogs you mentioned, i'm happy you aren't in the game. leave it to the big boys who know what they're doin...
Posted by: anon at July 24, 2007 1:43 PM
1:37 excellent peice. Thanks for that.
Posted by: anon at July 24, 2007 2:00 PM
Your welcome 2:00. Oh I own, 1:43, and I like it. The subject is buying. If the 'big boys' are buying now at prevailing asks, they will be big losers.
On what should I base my attitude? Buy high, sell low? Genius.
Posted by: Anonymous at July 24, 2007 2:11 PM
you should not base your attitude that you know for a fact that prices are higher now than they will be in the future.
if that is your attitude, then you don't have much scope beyond the last few years.
Posted by: anon at July 24, 2007 2:14 PM
Agreed. That's why I didn't say it (that I know for a fact). I'm simply warning people to read economic history as it is likely to repeat itself. It affects Brooklyn home prices.
I base my attitude on the FACT that home prices have historically went up and down, even in Brooklyn. Let me ask you this. Which sector of the economy is likely to save us from falling housing prices?
Posted by: Anonymous at July 24, 2007 2:22 PM
the sector called americans need to stop being so damn greedy.
Posted by: anon at July 24, 2007 2:29 PM
1:37 you are exactly right. People real estate is cyclical and it goes up and down and nowhere is absolutely immune. Some areas may be less afftected but history shows us that every bubble has to burst. Houses were appreciating at 20% per year, inflation was running at 3% per year and wages were increasing at 5% per year. Come on now people if that wasn't a bubble then what is.
Posted by: anon at July 24, 2007 2:40 PM
history may show you that every bubble has to burst, but physics tells me that some bubbles slowly deflate.
the latter is what we are seeing across the u.s.
you want to see a bubble burst, go visit post currency devalued argentina.
you people don't know the meaning of the word burst.
Posted by: anon at July 24, 2007 2:49 PM
Apples and oranges (w/ respect to time) - real estate and currency markets (or stock markets). Real estate bubbles don't burst as fast as bubbles in other markets because they also don't inflate as fast. They play themselves out in slow motion because of the slow marketing and transaction processes.
However, if you look at an instant replay of a past real estate bubble, it will damn sure look like a crash/burst, hence the term.
Whether you want to call it deflation, crashing, or bursting, the point is that prices in such events fall. With real estate, you have to be more patient.
Posted by: Anonymous at July 24, 2007 3:05 PM
anon 1:15pm. please plywood and duct tape? all of these lies about construction are total B.S.
sorry, but unless brownstones are gut renovated and built entirely new - like, guess what - a condo! they are shit. old wiring, old foundations, old everything... that's the irony, the only good brownstones are the ones that have been dismantled and re-built. otherwise, you have water issues, electrical issues, etc... and unlike, my gorgeous steel beam constructed condo - no CENTRAL AIR! living circa 1880 is a big drag. enjoy your dark smelly brownstone. i'll take my new condo any day!
Posted by: condo dweller at July 24, 2007 3:05 PM
then please go read another blog.
people who openly hate brownstones and not only read, but POST on this blog make themselves look like complete idiots. congrats condo dweller.
by the way, your condo will not be standing in 100 years. they aren't built to stand more than 30-40 years, tops. talk to any person who knows construction and they will tell you that 70% of new construction is not made to last.
if you haven't heard about shoddy new construction, perhaps we should introduce you to a good friend named boymelgreen...
Posted by: anon at July 24, 2007 3:13 PM
having owned not 1, but 2, 100+ homes including a brownstone, I have some experience. thanks for calling me an idiot though - calling people names always strengthens your argument.
Right, no one who buys a condo ever gets it inspected or knows anything about construction. Great that you "know" all this. And, sure, apartment buildings just "fall down" after 40 years.
i'll stop posting when brownstoner stops putting up articles about all the new developments and people on this site stop saying ridiculous lies.
Posted by: condo dweller at July 24, 2007 5:19 PM
enjoy your new, shoddily constructed condo.
sorry i called you an idiot.
moron is more like it.
Posted by: anon at July 24, 2007 5:35 PM
AND....THE MOST ASININE COMMENT OF THE DAY GOES TO.....WAIT FOR IT....
"enjoy your dark smelly brownstone"
Posted by: imustbestoned at July 24, 2007 5:39 PM
I agree the real estate market doesnt move as fast as currency or equity markets but I suspect whatever is going to happen in the real estate market is going to unfold a bit faster than it has in the past--because people over the past few years have been treating their houses much more like financial assets than has ever been the case. The markets that have crashed (San Diego, Miami for instance) turned pretty quickly and are dropping pretty fast, about as fast as the stock market has ever crashed.
Posted by: Anonymous at July 24, 2007 6:07 PM
it doesn't sound like many people believe the REBNY stats...
Posted by: anon at July 25, 2007 12:49 AM
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