Where's the Late-August Market Slowdown?

I am in the real estate business as an appraiser. I feel like a doctor at family outings or just friendly bbq's. Everyone ask's me the same question, is the market going down, what should I do, where is the market heading. All I can say is that as long as the seller is realistic in there asking price the property should sell. The high flying real estate market days are over. We are back to a more sustainable pace in the real estate market which could hold up. However, there will be certain market area's (communities/neighborhoods) which more then likely will feel the pinch of tighter lending reqiurements. In that case, you could see values trend downwards in these particular areas.

Posted by: guest at August 31, 2007 9:52 AM

A friend, who is a realtor, says that he won't even bother showing some of the newer properties that his firm markets - he thinks they are shiteous in nature, and he'd rather stick to places like old conversions (eg Ansonia) or single families.

Posted by: guest at August 31, 2007 10:04 AM

"The broker, who does most of her business in Park Slope and Fort Greene, notes that resales of older places seem to be doing much better than new developments."

Hmmmm, wonder why? Could it be because of overpriced crappy construction?

True, not all new buildings feature shoddy fixtures, materials, and workmanship, but we didn't see any in our price range (not tippy top, but not bottom of the barrel, either) that didn't feature at least some of this.

God, and apparently a signed contract, is in the details.

Posted by: guest at August 31, 2007 10:13 AM

"Where's the Late-August Market Slowdown?"
Folks, put down the water bong! Real Estate is OVER!
September will be the watershed month for this shit!
The Fed and the Asshat in charge is trying to spin this hit in positive light but, it's a matter of time. Good bye to this fucking mutant housing bubble.

Someday this war will end.

Posted by: guest at August 31, 2007 11:52 AM

Yeh, like I would believe a broker. 9.9 out of 10 are worse than useless.

Posted by: guest at August 31, 2007 12:21 PM

Put down the water bong? Why, 11:52? What alternative are you offering that will help ease the pain I am suffering from watching my home value bleed back down to where it was in 2000?

Posted by: guest at August 31, 2007 12:23 PM

Gee, I wonder why a broker would be speculating that things aren't so bad to a popular real estate blog?

Posted by: guest at August 31, 2007 1:02 PM

I'm with 1:02 -- what possible value is there in reprinting the musings of a person whose entire business depends on making the real-estate market look healthy? Even if she's not being deliberately deceptive, subconsciously she's always going to want things to look better than they really are.

Posted by: guest at August 31, 2007 1:16 PM

Re: 11:52

The day the war is over, 6 months from then the economy will be in a recession. History is proof to support the claim.

Posted by: guest at August 31, 2007 2:08 PM

There is definitely a slow down, regardless of what this broker says, though it may not be as bad in the lower price ranges. I'm really surprised given the content of this log that there is not mre discussion about the mortgage crisis we're in right now. It will certainly have a huge impact on "brownstone brooklyn," as the rates for jumbo mortgages are higher than they've been in years and who knows if they will go even higher. Remember that it was those low, low rates that led to the boom we've been enjoying around here. If buyers were forced to only by what they could truly afford over the past 5 years then a huge segment of buyers would've been buying coops/condo rather than expensive townhouses. These very same people that may have paid top dollar for their houses wouldn't be able to by the same buildings today, even if the prices remained the same. So let's save the positive propaganda.

Posted by: guest at August 31, 2007 2:24 PM

you're ignorant, 2:24.

there are so few brownstones on the market and the people interested in them don't care if their mortgage payment is 10,000 a month or 10,800 a month.

please get a clue.

Posted by: guest at August 31, 2007 3:39 PM

wow- that's a mature response. If you really think the difference in a monthly mortgage is only $800 you really don't know what you're talking about. Have you heard about interest-only and negative amortization mortgages? I know for a fact that many people used these to buy at the high end of the market, often with less than 20% down. I actually work in this field. You are the clueless one if you don't think this will effect the local market. Time will tell...

Posted by: guest at August 31, 2007 3:55 PM

I don't get this argument that because the supply of brownstones is limited, their value can't fall. There were just as few brownstones in Brooklyn in 1987 as there are today, yet the value of high-end properties in Brooklyn fell sharply between 1987 and 1993, and there was nowhere near the run-up in prices leading up to that crash that there's been in the last four years. The willingness to pay historically outlandish prices for brownstones has not been propelled simply by aesthetics or the flood of cash on Wall Street. It's been propelled by people's belief -- one that's characteristic of any asset bubble -- that the prices of these properties was sure to keep going up, and that an investment in a brownstone was a better investment than in other kinds of assets. And it's been propelled, as 3:55 says, by historically low interest rates for jumbo mortgages. The underpinnings of both of those drivers look increasingly shaky (if they aren't gone already). So it only makes sense that, going forward, buyers are going to be more cautious.

This doesn't mean that people aren't still going to want to buy brownstones. The demand won't go away. But they're not going to want to buy them at prices that are only justified if you assume you'll be able to sell the property for a lot more in the future. That means prices are likely to go sideways in nominal terms -- and go down in real terms -- for a while. And just as the cycle fed on itself going up, it'll feed on itself going down -- every six-month period in which prices don't rise will make buyers less willing to overpay, and sellers more willing to be reasonable. Now, if you're in your brownstone to live, this is no problem at all. But if you took out an 80% mortgage in the hope that five years from now, you'd have earned 100% on your investment, I think it's pretty likely you're going to be out of luck.

Posted by: guest at August 31, 2007 4:52 PM

Yeah, no kidding. I should buy a plot of land and put up a little tar paper shack. Because it would be "rare" it's value could only increase...lol.

Posted by: guest at August 31, 2007 6:54 PM

I bought a brownstone in Brooklyn eight years ago or so - it seemed very expensive at the time. But it seems to have risen steadily in value - heck, it's the best investment I ever made by a factor of a hundred. Sure, low interest rates helped. But you can't discount the fact that Brooklyn has become a fashionable place to live - great properties, fabulous streets, outstanding transportation, close proximity to Manhattan. You couldn't afford the workmanship and materials that went into a lot of these brownstones in a contemporary structure. And you get space you simply can't get in Manhattan. If you believe the predictions that a millon or more people will move into the city in the next decade (I'm not sure I do, by the way) - you see where these properties have a good chance of appreciating. Maybe not the nutty way it's gone the last three years - but over time. Brooklyn is really a great place to live - better, in a lot of ways, than Manhattan.

Posted by: guest at August 31, 2007 9:52 PM

I've said it once and I'll say it again, many folks here are overstating the "sub-prime" meltdown. They are gleefully waiting for one in the sad hope of telling everyone, told you so, na na. Only problem is, the market realities will not cooperate. Wall street has already factored in the sup-prime fall out. Sub-prime mortgages make up a small fraction of the entire housing market which in turn makes up a fraction of our larger economy. Which, unfortunately for the naysayers, is doing quite well. GDP continues to increase and even had a respectable percentage gain this past quarter. I know, I know, it's all a house of cards.lol. Again they come out of their caves to tell us, like prophets awaiting the sign from up above only to be constantly pooped on by a high flying seagull.
No my friends, what you see here is the result of politically based negativity which is fed to many who are of the liberal persuasion here, by an already outed major media. Alas, even the major media cannot deny 5 years of economic growth. Thus the continued resentment by many who pop in to chime in on how the housing market will fail....it must fail...I know it will....I can just sense it...
Time will tell indeed.

Posted by: guest at August 31, 2007 11:17 PM

I was just saying today that brokers must be lying like mad to convince people that the markets are just fine. Yes, the inability to find jumbo mortgages might not affect everyone -- but I sincerely doubt that brokerages are going to be able to continue to charge outrageous prices on places that sold for a fraction of their current prices less than five years ago. Let's hope some brokers wake up and start being honest for a change.

http://www.philly.com/inquirer/business/20070830_Credit_crunch_now_reaching_upscale_homes.html

Posted by: guest at September 1, 2007 12:02 AM

while I agree that prices may fall the improved services and infrastructure in neighborhoods like PH, CH, FG will prevent the prices from falling back to 1990 prices. These are better places to live and will compete with Manhattan and other 'hoods provided there is no return to higher crime rates or successful terrorist attack, etc.

Posted by: guest at September 1, 2007 9:58 AM

one additional problem that doesn't seem to get much play, is that people have been taking out home equity loans, which will no longer be as attractive and easy to get, and paying down high interest credit cards etc with them. The pretty sudden drying up of this pool will have a huge impact on how much people spend, and this will impact the economy...it's all connected, and not a political plot, 11:17.

Posted by: guest at September 1, 2007 11:50 AM

having lived in old and new housing and even renovated old housing, i will absolutely say that you need deep pockets to tackle a brownstone especially in park slope. the flooding issue sucks and people are constantly battling it. old houses that you have not personally renovated will have tons of problems that alot of people just don't understand esp. if they were renters or had owned a an apt.

think that p slope and other areas have had people flocking there who were pretty clueless about the hoods even a couple of years ago.

if you want to make money, look for neighborhoods that have an edge that can really grow and get in with a cheap psf price.

if you can hold out and you want to live there, you will make money in the 5-10 year outlook.

Posted by: guest at September 2, 2007 2:40 AM

Park Slope has become one of the nicest neighborhoods in all of the 5 boroughs. We no longer rely on people wanting to come gentrify it. We are now seeing people who are successfull and want to enjoy the fruits of their labor by living in a beautiful, eco-friendly, urban environment while being in close proximity to Manhattan. While it may not be as edgy or "hip" as it once was, it has become a stunning enclave and a blue chip neighborhood, not unlike Georgetown. Park Slope is the neighborhood that all others have tried to emulate besides Brooklyn Heights. People who like to bash it are either jealous, or simply like to say they hate beautiful things out of spite. Say what you will about the people (I don't like ALL people in ANY neighborhood) but the physical beauty of Park Slope, Prospect Park, the architecture, shops and restaurants make this neighborhood a top choice for many people.

Posted by: guest at September 3, 2007 4:56 PM

I don't claim to know a whole lot about real estate, but I've been living in Cobble Hill (renting) for about 3 years and have been looking to buy a place here or in one of the adjacent neighborhoods (Brooklyn Heights, Carroll Gardens, Boerum Hill or Park Slope) for the last 6 months or so. I'm willing to spend $2.5-$3.25mm and am fortunate that I'm not reliant on the mortgage markets to complete a transaction.

Should be easy in a buyer's market, no? There is NOTHING available. Really. My wife and I have looked at a several brownstones that look like they are about to fall down and some condos that are insanely overpriced.

I read threads like this one constantly looking to make sense of this situation, although they only seem to make me more confused as to what's going on. Do you think sellers are holding back because they think they can't get a good price? Does anyone have a home they want to sell me? :-)

Posted by: guest at September 3, 2007 5:11 PM

There's a beautiful brownstone for sale on Berkeley Place between 7th and 8th. Was 2.7 million when it was highlighted on here a couple weeks ago. Go check it out. Best block, but the house needs some cosmetic work. Great bones, though. I understand they are accepting all offers.

Posted by: guest at September 3, 2007 5:18 PM

Thanks 5:18, great tip!

Do you think some neighborhoods are more fairly priced than others at this stage? From what I understand, the Slope & Boerum Hill seem to be more reasonable than Bklyn Heights and Cobble Hill... is that true?

Posted by: guest at September 3, 2007 5:31 PM

I think there are deals to be had, even if the asking prices still seem high-ish. Just go in and make a reasonable offer if you see something you like. I think it's all about finding something you love right now. This way, you won't care what happens with the market in the next couple years, and you'll live in a neighborhood you can enjoy for many years to come. You'll come out ahead when all is said and done. It creates for the strengthening of neighborhoods and an environment where people really care. I find this to be true in Park Slope. People have genuine interest in the place because they are there for the long run.

If you put a couple hundred thousand into that Berkeley Place house, you'll have a 3 million-dollar-plus brownstone. No question. And in an extremely desirable location. That area has and continues to be top notch.

Posted by: guest at September 3, 2007 7:13 PM

5:11- Do you want a whole house? I have a 3000 sq ft garden/parlor duplex with a 1500 sq ft basement in the Slope. Moving in a year. It's gorgeous!

Posted by: guest at September 4, 2007 1:26 PM

1:26: I would buy a whole house or a partial/condo. I'm really looking for the best value available. Unfortunately, I don't think I can wait a year though. Where in the Slope is the house?

Posted by: guest at September 4, 2007 2:02 PM

email phone to fourwarrenpeace@yahoo. I'll call you.

Posted by: guest at September 4, 2007 4:44 PM

Im converting my brick 3 family into condo's I have two that will be available in Dec 2007 or Jan 2008, both are 1022 sq ft in a brick private home. All luxury chefs kitchens and luxury bathrooms. Both have 7x10 foot balconies and the top floor has a roof deck 15x20 foot. All stainless stell kitchens granite countertops and center kitchen islands. They are going to be magnificent when they are done. Yes I will be the seller. The 2nd floor condo will be $710,000. and the 3rd floor with roof deck 1million . Anyone interested call me at 917-862-4348 or e-mail me at harry2803@aol.com. This home is on clinton st between Hamilton and Nelson.

Posted by: guest at September 4, 2007 5:33 PM

To 4:56pm's point, Park Slope has become the gold standard for a certain type of city lifestyle, and as such, has become a destination for many well-heeled buyers. To that point, success sometimes breeds contempt as in all matters of money and class.

I would be typical of today's buyer, someone who could afford a large Manhattan apt (or might be cashing out of one), but prefers the slower pace of Brooklyn, the recreation, the outdoor space, etc. I really don't think most buyers in the current market are looking to make a killing, they are simply looking for the ideal long-term living situation and willing to pay what it takes. Whether the market goes up, sideways or down after their purchase has little immediate bearing on their decisions. I've noticed exactly what 5:11pm has noticed: There is absolutely nothing by way of brownstones on the market in Park Slope. Prices are too high (and stable) for the flippers to make money, and most of the old-timers have sold and retired. So who would be selling a brownstone right now? Maybe a retiree cashing out of the city or someone relocating for work, but most of the current home-owners are in for the long run. And anyone selling prime, hard to find r.e. is going to hold out for the best possible deal.

Would also note that most of the hyper-aggressive mortgage products never really took hold in NYC. Buyers have been rigorously qualified, compared to other hot markets like CA and FL, if only because sellers have generally insisted on selling only to well-qualified buyers. I know when I sold my co-op, I reviewed financial data for each of the bidders before picking one and signing the contract.

Posted by: guest at September 5, 2007 11:12 AM

I've been a condo owner in Manhattan for over 10 years. I am about to sell my apartment and have been looking at brownstones among other space in various neighborhood of Brooklyn. One thing I have noticed, that I think is a serious drawback to the real estate market in B, is the strange behaviour of brokers. I have a broker (from one of the big firms) that I want involved in any transaction i do because she has looked out for me so well in the past - but the Brooklyn brokers seem pathologically incapable of playing well with others, to the point of refusing to show properties if my broker is involved. I haven't so far been able to rationalize their behavior. It seems to me that more transparency and more interaction between brokers could alleviate what is perceived as a product shortage, but what really seems to be more like a shortage of information. Does anyone else agree? Or does this "Brooklyn broker mentality" serve some vital purpose that I can't see?

Posted by: guest at September 6, 2007 8:46 AM