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April 14, 2008
Housing Collapse: A Global Domino Effect?
The United States' residential housing market collapse is shaping up to be an international trendsetter, according to article in today's Times. The mortgage meltdown that's caused our bubble to burst is spreading to other countries that've seen rapid housing appreciation in the last decade or so, like Ireland, Spain, England, and Eastern European capitals. The article notes that the "synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well." Beyond Europe, prices are also going down in India and southern China. The worldwide troubles are largely being blamed on too-lax lending standards and over-valuation of properties. The situation threatens to sink vibrant economies in countries like Ireland and Spain, where residential investment has played an outsized role in bolstering growth. As new construction slows, unemployment is rising, and houses are sitting empty.
Housing Woes in U.S. Spread Around Globe [NY Times]
Photo by JohnLeGear.
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It's a collapse?
Posted by: guest at April 14, 2008 9:14 AM
The Times credibility continues to crater. Just yesterday the Paper was forced to admit that its claim that there was slow down in Manhattan has been discredited by the facts, and the next day they are back with the bubble talk.
The only issue here is will a global slowdown help or hurt NYC real estate. I think its safe to say that it will help. Very simple, flight to quality. Foreigners will continue to buy in NYC to hedge against declines in their home markets.
Economists are predicting the recession will be over by the 4Q 2008 so any slow down in the next three months will be mitigated by a rapid rebond by the end of the year. By most accounts, this will be a very strong year for Manhattan Prime.
Posted by: guest at April 14, 2008 9:23 AM
9:23, the article is not discussing one borough, in one city, in one state of the United States. It's addressing a global slowdown.
Posted by: guest at April 14, 2008 9:27 AM
as a renter waiting on the sidelines with my downpayment in the hope that prices may come down further, I'm not feeling too optimistic they will. Things didn't really slow down in manhattan or the best parts of brookln.
I hate the word "prime". Its as dumbass as luxury as in "luxury condo".
Posted by: guest at April 14, 2008 9:29 AM
Collapse seems like a poor choice of words for a paper that prides itself on its literacy. Collapse would be like 50-75%; not 10-20% or people selling for what they paid. Anyway, let's hope 9:23 is right. I think it's a lot worse than those who interpret everything bad that happens as good for NY real estate. But it is some tempting Kool-Aid.
Posted by: guest at April 14, 2008 10:06 AM
I don't think people get it yet.
I spoke with two people in banking, both on the lending side this weekend, one from Citibank and one from a regional bank called Fifth Third. Both of them said these will be grim times for banking and therefore the economy.
People fail to see how dependent we were on easy credit terms. Citibank just told Fifth Third that they would not accept any loans that were sub-prime. Fifth Third in turn told all of the loan brokers they had spent years developing relationships with, that they were done doing business- subprime and prime - everything.
Easy credit was like having a nitro button on your car dash that you could push and create performance. This masked poor fundamentals in the market. That's over.
It's as if an entire sector of our economy has dissapeared overnight (relatively). It's not that that portion of our GDP is slowing, it's gone for perhaps decades.
My prediction is that this is the advent of an extended decade long era of zero to nil growth in the US economy. I don't see anything on the horizon accept the slim possibility of the alternative energy business that will replace the credit/housing bubble.
Posted by: kuroko at April 14, 2008 10:10 AM
Wow look at the DJIA. Major volitility this morning. The PPT is so transparent.
Real estate is slow, 9:29. Took a decade for the run-up. Buy if you want but you'll be catching a falling knife for sure. Good things come to those who wait. But, if you have to bite the bullet because of family, etc., good luck.
9:23 - How will it help? A flight to quality means a flight to a whole other asset class. Housing everywhere is or will be dwindling. Manhattan sale prices may not be in the red now but their numbers of sales are. History shows that price drops follow sales drops. Economists say this...economists say that. Which economists are you referring to? They never agree with each other. One thing's for sure, an official recession hasn't even been called yet. How can you forsee when it's gonna end? One more thing's for sure - parallels to the Great Depression keep popping up in economic conversations.
More bad news out there than good. C'mon - AY, Bear Stearns, GE, etc. It's a wrap. Companies can't figure out what their balance sheet are. Losses are embedded. The Fed is doing things with taxpayer money that they haven't since the Great Depression. Wake up people.
Posted by: guest at April 14, 2008 10:13 AM
" I don't see anything on the horizon accept the slim possibility of the alternative energy business that will replace the credit/housing bubble."
Absolutely, 10:13. They were talking about this on the news last night. I think it'll be the next Dot Com boom/bust.
Posted by: guest at April 14, 2008 10:18 AM
The strong european market is what has been propping up manhattan prices - since manhattan prices seemed cheap by comparison. once european prices come down, so will prices in manhattan. then you can forget about brooklyn.
Posted by: guest at April 14, 2008 10:27 AM
The only problem with the alternative energy market is it is an alternative to a major sector of our economy. The only way to make it a net positive for our economy is to be on the leading edge of the innovation, technology, and distribution of it.
If we aren't on that leading edge the best thing it can do for our economy is improve our trade deficits and reduce our environmental clean up costs.
Did you know that if we changed every standard light bulb in America with a compact flourescent that the total reduction in green house gas would be wiped out by adding three coal burning power plants?
Posted by: kuroko at April 14, 2008 10:29 AM
"Brooklyn Home Sale Prices Inch up 3 Percent in the First Quarter of 2008, New Study Finds"
http://www.marketwire.com/mw/release.do?id=843390
"Average home prices rose in Williamsburg, Brooklyn Heights, Carroll Gardens, Fort Greene and Bay Ridge but fell in Park Slope, Boerum Hill, Greenpoint and Clinton Hill."
Posted by: guest at April 14, 2008 10:42 AM
The "worldwide troubles" are being blamed on too-lax lending standards, of course, but never the system of banking safety nets run by the government that mitigates the risk of such standards biting banks in the ass. And also, never, ever, is the government blamed for its role in artificially cheap and easy money. Instead, the drums are beaten for MORE "oversight" but the agencies and entities that are the root of the problem.
Meanwhile, I fail to see the bad, macro-wise, in flagging home prices. All this means is that more people can afford a home. Benefits shift from those who bought high to those who can now buy low. The economy doesn't care.
Posted by: Jeremy at April 14, 2008 10:48 AM
That should be *BY the agencies...
Posted by: Jeremy at April 14, 2008 10:50 AM
"Overall sales in upper echelon neighborhoods like Park Slope and Brooklyn Heights remained strong in the first quarter of 2008, the report shows. Prices rose for Park Slope single- and multi-family homes, as well as for co-ops, but Park Slope condo prices fell 32 percent, dragging down the neighborhood average home price."
Posted by: guest at April 14, 2008 10:52 AM
10:52 - god forbid their be a whisper of a suggestion that Park Slope may be doing slightly worse than other neighbhorhoods - glad you clarified IMMEDIATELY! It's JUST a condo issue.
Posted by: guest at April 14, 2008 10:58 AM
Because you are the first person to point out that the sky is falling, 10:58.
Even when it's not.
Now get your rent in. It's 14 days OVERDUE!
Posted by: guest at April 14, 2008 11:03 AM
So Brooklyn has gone bust, huh??
"Fort Greene saw a 170 percent increase in sales volume, the largest of all the neighborhoods, with 62 homes sold in the first quarter of 2008 compared to 23 for the same period last year. Overall prices also rose from $675,870 to $760,484, a 13 percent increase."
Posted by: guest at April 14, 2008 11:23 AM
brownstoner/gabby should frontpage that link:
http://www.marketwire.com/mw/release.do?id=843390
Posted by: guest at April 14, 2008 11:50 AM
If you want to know everything there is to know about the real estate boom in Ireland get David McWilliams book THE POPE'S CHILDREN, or, his latest, THE GENERATION GAME.
Posted by: guest at April 14, 2008 12:29 PM
Here is the reality, Brooklyn is great, it always will be great, and just as everyone on this site repeatedly states it will continue to show great strength in the real estate mnarket, despite a growing trend to the alternative is nearly every other real estate sample. For those who want to argue this point, please refrain from citing economic indicators, or statistics that traditionally show a potential weakness in real estate, and just look at the fact that prices in Brooklyn remain high. It doesn't matter if the economy slows, because Brooklyn's market will still find sellers from oversees, and if the oversees markets continue to falter, well by the time it affects Brooklyn, the National economy will again be strong, so Brooklyn's real estate will not be affected. To argue against these facts is to ignore reality that Brownstones in Brooklyn are still priced upwards. I don't want to hear anymore hocus pocus statistics, science fiction theories on how economics work,or misstatements of past historical trends kindly just admit that Brooklyn is the best place to live (as a true Brooklyner who was here from the beginning 1997, I know) and that it will never suffer from a drop in real estate prices, so we can end this argument once and for all. Thank you!
Posted by: guest at April 14, 2008 12:34 PM
rriigghhtt, 9:23.
irish carpenter: i just lost my shirt on an RE investment in my home country. so now, i'm going to "double down" by investing in a potentially declining market overseas. only now i'm also adding currency risk. keep dreamin', man...
Posted by: guest at April 14, 2008 12:38 PM
Yeah right 12:34, the overseas buyers are going to bail us out. That's the dummest thing I ever heard. But then you've been here the whole time since 1997, I guess you know how everything works in Brooklyn real estate. No need to look at any statistics, yeah right reall smart.
Posted by: guest at April 14, 2008 12:48 PM
The real estate market will tank when we least expect it. It always does.
Posted by: guest at April 14, 2008 12:50 PM
"(as a true Brooklyner who was here from the beginning 1997, I know)"
I've been here since 1963. Was that BEFORE the beginning?
Posted by: guest at April 14, 2008 12:56 PM
"true Brooklyner who was here from the beginning 1997"
LMMFAO! You've gotta be kidding me. Please tell me I've been had by sarcasm.
Posted by: guest at April 14, 2008 1:40 PM
"as a true Brooklyner who was here from the beginning 1997, I know) and that it will never suffer from a drop in real estate prices, so we can end this argument once and for all. Thank you!"
Mother Fucking Asshat Alert! How about "I was born and raised here" ??!! Like The What!! You asshats kill me and I want to see you here in the meltdown!!! The Youngins will use your ass for batting practice!
Credit conditions are very bad! That's why you see thats Assfuck Brownstoner jumping to the band wagon! Watching your "investment" going down the drain is real hard!
RIP Mutant Real Estate Bubble!
The What
Someday this war is gonna end...
BTW I'm off my fucking meds!!
Posted by: guest at April 14, 2008 1:43 PM
all renters / side-liners, please disregard this link!
Brooklyn Home Sale Prices Inch up 3 Percent in the First Quarter of 2008, New Study Finds
Posted by: guest at April 14, 2008 1:48 PM
You are still an idiot, the what. Take a look above. Brooklyn real estate is not only doing fine BUT STILL INCREASING!
And now:
In an epic article today on why the super rich are still spending superbly, the Times wrote that buyers have "already closed on 71 Manhattan apartments that each cost more than $10 million, compared with 17 apartments in that price range during all of 2007."
Posted by: guest at April 14, 2008 1:50 PM
park slope
park slope
park slope
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park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
park slope
Posted by: guest at April 14, 2008 2:09 PM
i've been in Brooklyn since 2007 and you ll know that i think i know everything!!!!! LOL
Posted by: daveinbedstuy at April 14, 2008 2:10 PM
This article is about places that had a majority of properties selling recently under "too-lax lending standards".
Uh, how does that apply to NYC? NYC is chock full of QUALIFIED buyers. And full of coop buildings in which you can't even get a foot in the door if you aren't financially qualified. The majority of sales were to qualified buyers under proper lending standards. For the few that did take out loans they didn't really qualify for, most will be able to SELL not have to foreclose. Sure not for as much as two years ago but at least we have buyers here. So many other cities, states and countries don't have buyers. And that's the big problem.
Not saying we won't be affected, of course we will, but it's apples and oranges, sorry.
Posted by: guest at April 14, 2008 2:10 PM
Now I see why all you people hate the Park Slope people. I didn't understand before.
Posted by: daveinbedstuy at April 14, 2008 2:12 PM
So you don't hate black people, Dave but you hate all 70,000 people in Park Slope?
God you are so useless and moronic. Aren't you supposed to be gone by now?
Posted by: guest at April 14, 2008 2:15 PM
"You are still an idiot, the what. Take a look above. Brooklyn real estate is not only doing fine BUT STILL INCREASING!"
Yo Assfuck, sales VOLUME has fallen off a cliff. The are selling 1 house that's overprice and the rest of the inventory is just sitting there!
Go in a Real Estate office and ask them "When was the last time you had a closing"? If they are truthful they will say "Not in a long time".
There are 20 stories that are bad compared to this piece of bullshit! You why the "Super Rich" is OK?! Those are the ones who have ass-fucked your 401k's, Mutual Funds and Retirement savings. Ask those people who held on to ENRON after the NASDAQ implosion. Stupid Mother Fucker!!!!
The What
Someday this war is gonna end..
Brownstoner Fix this fucking site asshole!
Posted by: guest at April 14, 2008 2:18 PM
"You are still an idiot, the what. Take a look above. Brooklyn real estate is not only doing fine BUT STILL INCREASING!"
Yo Assfuck, sales VOLUME has fallen off a cliff. The are selling 1 house that's overprice and the rest of the inventory is just sitting there!
Go in a Real Estate office and ask them "When was the last time you had a closing"? If they are truthful they will say "Not in a long time".
There are 20 stories that are bad compared to this piece of bullshit! You why the "Super Rich" is OK?! Those are the ones who have ass-fucked your 401k's, Mutual Funds and Retirement savings. Ask those people who held on to ENRON after the NASDAQ implosion. Stupid Mother Fucker!!!!
The What
Someday this war is gonna end..
Brownstoner Fix this fucking site asshole!
Posted by: guest at April 14, 2008 2:19 PM
This is for you, The What, since you apparently missed it above:
"Fort Greene saw a 170 percent INCREASE in sales volume, the largest of all the neighborhoods, with 62 homes sold in the first quarter of 2008 compared to 23 for the same period last year. Overall prices also rose from $675,870 to $760,484, a 13 percent increase."
Posted by: guest at April 14, 2008 2:23 PM
2:15...just another example of an idiot that can't read a facetious comment for what it is....a JOKE...God you are stupid
and The What...learn how to post just once...you are annoying enough as it is without the double posting
Posted by: daveinbedstuy at April 14, 2008 2:24 PM
SHUT UP DAVE! Please. No one thinks you are funny or intelligent. Not even your sissy bf in Philadelphia.
The website is broken!!! Don't blame others for multiple postings! Blame bstoner.
And for the record, you posted a comment 3 times in a row last week then begged to have the other two removed so you didn't look like a fool.
Please either make a useful comment or keep it to yourself. You are like a 5 year old with ADD.
Posted by: guest at April 14, 2008 2:30 PM
go to hell 2:30 in your own words "please either make a useful comment or keep it to yourself."
Get back to your job so you can pay your rent!!!
Is counting peoples' posts your hobby?? Kind of a loser hobby don't you think
Chew on that.....
Posted by: daveinbedstuy at April 14, 2008 2:43 PM
Between tWhat and Dave, no wonder nobody comes here anymore. And Brownstoner thinks it actually helps traffic to have stupid posts. Wrong.
Posted by: guest at April 14, 2008 2:52 PM
To assume someone who does not agree with you, is a renter, Dave, shows your utmost ignorance and self righteousness.
Given all the info you've given about your home and neighborhood on here thus far, I can assure you that my properties (all 3 of them) are worth more than yours. Probably by about 20 times.
You are like one of those people who email back saying "THANKS!" and nothing else.
Useless information, and I believe you've already mentioned how you post incessantly on Brownstoner to waste time so you aren't spending it on gay hook up sites.
How about you chew on that.
Posted by: guest at April 14, 2008 2:56 PM
good for you 2:56.....all i care about right now is that its so easy to get you riled up!!!! Its fun
If you want to get into that kind of pissing match, i have 5 properties...Brooklyn, 3 in PA and one on Cape Cod. i can speak to a much more diverse set of real estate markets.
do i care if the prices go up and down over a short term...absolutely not
Posted by: daveinbedstuy at April 14, 2008 3:03 PM
I have three...one in Brooklyn Heights, one in Southampton and one in Paris.
Retail value: 15-20 million.
How much is that cape worth up in Ptown, Dave?
Last time I was in Philly, someone was shot in the middle of the day in Center City. Your places there gotta be worth at least a buck fifty, right?
Gosh...you are SO cultured and diverse, Dave. Please teach me to be more like you!!!
Posted by: guest at April 14, 2008 3:10 PM
I have three...one in Brooklyn Heights, one in Southampton and one in Paris.
Retail value: 15-20 million.
How much is that cape worth up in Ptown, Dave?
Last time I was in Philly, someone was shot in the middle of the day in Center City. Your places there gotta be worth at least a buck fifty, right?
Gosh...you are SO cultured and diverse, Dave. Please teach me to be more like you!!!
Posted by: guest at April 14, 2008 3:12 PM
add something to the topic or go away 3:12
Isn't it the time of year that you go back to paris?
Posted by: daveinbedstuy at April 14, 2008 3:16 PM
Yes, because your comments here have been totally on topic, Dave.
I don't see a ONE in which you've managed to stay on topic, actually. You are either judging others, talking about gay sex or talking about how great you are.
Period.
Even at dinner the other evening, a bunch of us brownstoner lovers were talking about how freakin annoying "daveinbedstuy" is.
Yep...you're famous!!! For being IGNORANT!
Posted by: guest at April 14, 2008 3:26 PM
TEDIOUS 3:26. That must have been some dinner party. I do this to rile you up after the topic has been worn out and you just run with the bait!
Posted by: daveinbedstuy at April 14, 2008 4:10 PM
I don't get riled up.
Posted by: guest at April 14, 2008 4:41 PM
"And for the record, you posted a comment 3 times in a row last week then begged to have the other two removed so you didn't look like a fool."
Too late!
Posted by: guest at April 14, 2008 4:43 PM
Hey Dave, don't take that! Get your crew (Boof Chumpion and that other guy), gang up on him and hit him hard with your diversity properties!
Posted by: guest at April 14, 2008 4:48 PM
Hey Dave, don't take that! Get your crew (Boof Chumpion and that other guy), gang up on him and hit him hard with your diversity properties!
Posted by: guest at April 14, 2008 4:48 PM
Hey Dave, don't take that! Get your crew (Boof Chumpion and that other guy), gang up on him and hit him hard with your diversity properties!
Posted by: guest at April 14, 2008 4:48 PM
Yeah Dave, hit them with a gangbang. You know your way around that, I'm sure.
Posted by: guest at April 14, 2008 4:54 PM
Yes Dave go up your ass and wake up the other 2 spoogers.
Posted by: guest at April 14, 2008 4:55 PM
Seriously, who *are* these people, dave, jerri, and Biff? It seems as if they just started to post about a month ago, and the commentary on this site has turned personal and inane.
What happened to cool people like Montrose Morris? Were they turned off by the inanity?
Posted by: guest at April 14, 2008 8:05 PM
"What happened to cool people like Montrose Morris? Were they turned off by the inanity?"
They're too busy staging their brownstones for short sales. The Titanic has hit the iceberg.
Posted by: guest at April 14, 2008 8:12 PM
Yawnstoner.
Posted by: guest at April 14, 2008 8:59 PM
Biff and his buddies are an orchestrated attempt to drive cogent posting from this site. You'll notice they appeared just as some truly astute businesspeople/financial planner types started posting regularly, and to the effect that it makes no sense in economic terms to buy at these prices.
As to the geniuses who insist on repeating, ad nauseum, that Brooklyn is Valhalla, and that prices only go up, and yadda; you know nothing of finance, and are about to get swept into the dustbin of economic history. Major and regional banks are about to collapse; option ARMs are about to re-set; Wall Street is about to pink slip a third of its workforce; the credit game is over.
Posted by: guest at April 15, 2008 1:04 PM
Okay fine, but we don't care what Brooklyn prices do, 1:04, because NYC is the only place we can make a living at what we do. There are millions of people who are just like us and because of that properties will never be cheap here no matter how much you wish it so.
But you're right about Biff and his buddies. They're clearly not real people. It's some weird tactic for this site. Maybe trying to fill in and make posts when there are fewer posts, so the advertisers are happier? Who knows.
Posted by: guest at April 15, 2008 4:56 PM
It's funny that the posters on this board actually think that the government is going to fix lending practices and that there will not be any slimy lending practices in the future.
Here is how our country works - a huge scam where a few people made a lot of money off the masses is exposed - i.e. Enron, Savings & Loan, today's credit crisis, etc.
The politicians talk about fixing it for good by passing stricter regulations. They get elected then either dont pass legislation or pass legislation that is easy to get around.
The companies start to rip off people just like they were in the past but on a larger scale and get a way with it longer.
Things dont get fixed. The rich get richer, the politicians set things up to allow their buddies to rip people off.
Lending practices will ease again soon. Matter of fact it is relatively easy to get a loan right now.
Sneaky Pete
Posted by: guest at April 16, 2008 9:36 AM
I'm really disturbed by how homophobic many of these posters are. I can't imagine how the little chit-chat between dave, biff, etc. is either harmful to Brownstoner or innately dangerous in any way. Once again, but not for the last time, I'm sure, I'm mildly shocked at how provincial/racist/homophobic/intolerant the would-be cultured brooklynites are...Especially the person bragging about living in Brooklyn Heights, which is a pretty tacky place-Southampton--genuinely gross--and "Paris"--as if those three signifiers mean anything linked together. It just tells me that a rich, tacky person, who probably doesn't even speak enough French to realize that their Parisian neighbors despise them, has the bad taste to go to wherever people with more money than common sense go. I bet the "Paris" place is somewhere like St. Germain, where only an idiot would buy something, and its full of fearful fat American tourists. Seriously. I know this isn't Manhattan, even virtually--but honestly. Daveinbedstuy and the What are more interesting than most of this posturing, flatulent, "I'm so rich" dreck. I seriously wonder, not to get overly psychoanalytic, but--how "small" some of these "big" men actually are--it really is too rich.
Posted by: anniewilde at April 16, 2008 12:57 PM
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