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March 25, 2008
A Silver Lining to the Foreclosure Epidemic?
There may be an upside to the nasty wave of foreclosures inundating markets across the United States, according to a Wall Street Journal article. Basically, the wounded real estate market may partially heal itself if the flood of forcs results in hefty price drops—a trend that already seems to be taking hold. Last month the National Association of Realtors recorded a 2.9 percent increase in sales of previously occupied homes over January, the first rise since July, and the median home sales price dropped 8.2 percent. The big question right now is whether prices will drop low enough to keep up with unsold inventory. According to some, the price drops could be good news for middle-class buyers, many of whom couldn't afford to buy properties during the boom years. There's also the possibility that investors will start to swoop in and buy foreclosures in bulk, banking on eventual appreciation. On a side note, the chart above, included in the article, doesn't present a pretty picture of the New York-New Jersey foreclosure scene, though a lot of these are presumably in the 'burbs and exurbs.
Wave of Foreclosures Drives Prices Lower, Lures Buyers [WSJ]
Graphic From First American CoreLogic, c/o The Journal.
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Comments
Good time for me to buy a vacation home upstate.
Posted by: guest at March 25, 2008 9:49 AM
Really?? Significant price drops will make housing more affordable, who woulda thunk it!
Posted by: guest at March 25, 2008 9:52 AM
I hope prices fall enough to compensate for the fallout from the roughly $460 billion of adjustable-rate mortgages that are scheduled to reset this year.
Posted by: guest at March 25, 2008 9:59 AM
I don't think exurbs are in NY MSA.
So don't just presume.
Posted by: guest at March 25, 2008 10:04 AM
"Last month the National Association of Realtors recorded a 2.9 percent increase in sales of previously occupied homes over January, the first rise since July,"
Sales ALWAYS increase from January to February . . . add on to that that this was a leap year, with an extra day. Year over year, sales were down nearly 23%!!!
I can't believe that people still swallow the NAR's line on what the news in the numbers is.
This wasn't a surprising uptick . . . it was an absolutely horrible February report. Here is a link to a chart . . . it was a bloodbath. THAT is the story.
http://bp1.blogger.com/_pMscxxELHEg/R-e1-tDCILI/AAAAAAAABvY/6hwTIsXc8a4/s1600-h/EHSsalesNSAFeb08.jpg
Posted by: guest at March 25, 2008 10:40 AM
please, please, please! show me the bargains to be had in Windsor Terrace or in Bay Ridge. I do not even mention Park Slope. I am looking for a big studio or small 1 br fixer-upper below $130K in WT or BR (PS would be more expensive). Foreclosures or not - market is still so strong that my search brings nothing. :(
Posted by: guest at March 25, 2008 10:57 AM
"big studio or small 1 br fixer-upper below $130K in WT"
You're kidding, right? You're going to need at least twice that. Try Midwood.
Posted by: guest at March 25, 2008 11:04 AM
You aren't going to find a studio for less than 300K in PS, 250k in WT or 160K in Midwood.
Posted by: guest at March 25, 2008 11:11 AM
If you look at is as percentage of housing stock, the NY rates are better than Chicago, Atlanta, Detroit, Denver, Cleavland and Pheonix. Could be worse! I'd like to see the data broken down into investors and homeowner seperately. I feel for the homeowners, and could care less about the investors. Of course if you bought your house to live in and not to turn a profit in, then does the current market really matter in the long run? I know this is going to get a lot of snarky comments, but when I sell my house in 10 years (or even 5), I don't expect the market to be in the same place it is now. Stop freaking out, it's called a cycle.
Posted by: guest at March 25, 2008 11:23 AM
From NYT:
In the New York metropolitan area, home values fell just 0.9 percent in January, and 5.8 percent compared with a year earlier. But the drop-off appeared to be gaining speed: values are down nearly 10 percent on a three-month annualized basis.
Posted by: guest at March 25, 2008 12:23 PM
There are no ex-urbs in the NYC metropolitan area... the ex-urbs of NYC are in Pennsylvania or upstate New York. Most of the foreclosures have been in New York City, particularly Queens and Brooklyn. Yes, your precious Brooklyn is having a foreclosure problem.
The suburbs are pretty healthy compared to what's about to go down in NYC in the coming few years.
Posted by: guest at March 25, 2008 6:32 PM
"You aren't going to find a studio for less than 300K in PS, 250k in WT or 160K in Midwood."
At least not this year.
Posted by: guest at March 25, 2008 7:26 PM
"You aren't going to find a studio for less than 300K in PS, 250k in WT or 160K in Midwood."
Maybe not this year.
Posted by: guest at March 25, 2008 7:28 PM
nor next year... you might want to check out joliet or scottsdale for a possible move.
Posted by: guest at March 25, 2008 9:38 PM
Brooklyn's getting softer than Charmin.
Posted by: guest at March 25, 2008 11:40 PM
It could be great for Brooklyn if prices dropped--especially out in Bed Stuy where I am!
Right now a gut-job brownstone is prohibitively expensive for even an upper-middle class fam in my neighborhood (say 550-600K + at least 100K to renovate)
I'm doing this, but let's just say it's not for financial reasons. I am not getting a good deal.
If the total cost was more like 550-600K, though, it could become more than do-able. It could become worthwhile.
Posted by: guest at March 26, 2008 8:52 AM
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