Dog Days for U.S. Housing; Is NYC Next?

Brooklyn Condo Prices Still Climbing

http://www.brooklyneagle.com/categories/category.php?category_id=5&id=20824

"The average sale price for a condominium in Brooklyn increased four percent in April to $656,784, compared to the same period last year"

Posted by: guest at May 28, 2008 9:10 AM

OMG should I sell my apartment now that I just bought...WHat a bunch of crap. I understand the economy is going through a tough time but if you are getting a good deal on a place in a good neighborhood what are you supposed to do wait and hope things come down even more...Becasue what will happen is that lending will start to get easier and prices will go back up but may be stagnant for awhile but in prime brooklyn I think it will be ok...

Posted by: guest at May 28, 2008 9:15 AM

I love sunglasses on dogs

Posted by: guest at May 28, 2008 9:17 AM

inventory in Brooklyn seems very low. Not a lot on the market.

Posted by: guest at May 28, 2008 9:23 AM

The best thing that could happen to the NYC real estate market is zero appreciation and zero depreciation for the next ten years.

This is a likely scenario. Market values today are way ahead of incomes, and the economy is cooling. Therefore, signficant price appreciation is not likely.

But the market is in much better shape than it was in 1989, when there were waves of new condos and coop conversions, coupled with rising interest rates. Prices crashed everywhere. Today you can probably count the number of coop conversions on one hand. And the condo glut will be absorbed because most of the planned projects will never get a shovel in the ground. Therefore, signficant price depreciation is not likely.

Posted by: guest at May 28, 2008 9:24 AM

Brownstoner, it's really easy to add plug-ins that will prevent duplicate messages, throttle the posts from one user, and limit the message length (with the option to see "more ...").

Please have your tech guys look into this. It should take no more than an hour to configure. If they are unable to add these features, please post a messages requesting help ... I'm sure you have many capable readers willing to help.

Posted by: guest at May 28, 2008 9:26 AM

NYC is solid plain and simple. Each market is different and NYC is not Stockton California if you haven't noticed.

Honestly the only thing that will impact New York is for second homes, cheap Miami and cheaper LA is tempting to the rich. Why pay top dollar in New York if a primo condo is available in Miami for a steal?

Fundamentals though are rock solid. New York has impressively pulled through this admittedly rocky market. New York real estate professionals have earned a solid pat on the back.

Posted by: guest at May 28, 2008 9:32 AM

The sky is falling!

Posted by: guest at May 28, 2008 9:44 AM

does that dog house have original details?

nyc it is different here yada yada yada

south slope is a dump

Posted by: guest at May 28, 2008 10:02 AM

9:32 I do not think anyone would choose Miami as a Place to Live maybe as a second home but with Crime so high and the lack of Culture , I believe they would still choose NYC or go elsewhere in Europe. NYC is Pretty Unique.

Posted by: guest at May 28, 2008 10:18 AM

"fundamentals are rock solid" -- yup. Purchase prices are more than twice as expensive as long term trends relative to rents, incomes and construction costs. That's about as good a predictor of future appreciation as you can get. Manhattan's inventory is double a year ago, but that means that more people will be moving to Brooklyn as it becomes more attractive relative to Manhattan. If only the media didn't report the news the market would do just fine.

Posted by: guest at May 28, 2008 10:25 AM

I have friends in Seattle who used to also say "Seattle is unique -- between its tech, aerospace, and educated population, plus its bounded in by water so you can't just expand outwards, that's why seattle wouldn't decline -- well, looks like they were wrong. And the "unique" argument is wrong in NY also. NYC declined a lot in the late 80's and it was "unique" then too. It's just not immune from market forces.

Posted by: guest at May 28, 2008 10:31 AM

9:23 Inventory low???? Look at all the new builings out there that are less than half sold after a year! Inventory for affordable housing is low -- plenty of $600K one-bedrooms or $1MM+ 2-bedrooms.

Posted by: guest at May 28, 2008 10:43 AM

Dave:

At the peak of the 1980s boom, it cost LESS per month to pay a mortgage than to rent a comparable apartment, even before the tax subsidy. Today it costs almost double in the prime neighborhoods, 50% more in the marginal ones. And of course that includes the lower interest rates (and doesn't take into account that the tax subsidy gets relatively smaller as prices exceed $1m). Nor does it count the likely capital depreciation as prices return to fundamentals.

So why are low interest rates (and the tanking dollar, tanking employment market, etc) going to save the bubble?

Posted by: guest at May 28, 2008 10:46 AM

Um....43 condos were sold in Park Slope in April 2008.

15 in April 2007.

And you REALLY think that's the sign of the end of the world. Especially since you've been predicting the TOP was in 2005.

Even if next year, only 15 condos sold in Park Slope, we'd still be doing better than what most people here say was the top.

Brooklyn prices were UP 4%. Do you know what that means? The rest of the country went down 14% but Brooklyn and Manhattan are still going up. So all these years you all have been saying don't buy, don't buy, the owners are still seeing appreciation.

You doom and gloom people are just so funny. You'll never admit you are wrong, will you. Even now TWO FULL YEARS LATER and prices are still going up, as are sales.

It's ridiculous.

Posted by: guest at May 28, 2008 10:48 AM

As Seattle tanks, the sellers cashing out there will buy in Kensington. Wake up and smell the coffee -- prices are going up.

Posted by: guest at May 28, 2008 10:49 AM

10:48 and 10:49 You are so right nobody wants to say they were wrong. This market will be strong forever because it is after all NYC.

Posted by: guest at May 28, 2008 10:51 AM

Trends that can't go on forever -- do.

Just because Park Slope prices are out of line with construction costs and comparable rentals doesn't mean they are coming down. More expensive condos were put on sale last year than ever before and some of them sold, so REBNY shows prices and sales are still going up. Just wait until there are more sales on 1 PP -- then the stats will really show an increase in prices.

No need to worry about lower NYC incomes. The Irish will just cash out from their boom and buy here. Just like the Japanese did in the 1980s. NYC is different and this year is unique.

Posted by: guest at May 28, 2008 11:01 AM

If you think prices aren't coming down, take a look at this website http://www.natefind.com/results.php?low=&high=&location=reduced+brooklyn&refine
every week the list grows exponentially.

It's not the end of the world that prices are/will come down - it's a GOOD thing - will allow normal people to buy in their beloved brooklyn neighborhoods that they have been renting in for years. Even though I bought at the VERY peak of the market (boo hoo) I am actually thrilled that prices are coming down. There are three brownstones on my block - 1.2, 1.25 and 999,000 respectively and none of them are selling yet. If all continues at the same pace, they'll come down and my friends will be able to buy on my block...

Posted by: guest at May 28, 2008 11:09 AM

What I see are people cashing out of the fringe areas, to move back to the prime ones like Park Slope and Brooklyn Heights. I know a couple people who have just recently moved from Bed Stuy to South Slope, actually. As crime gets worse in the fringe, they will be moving back to the safer areas.

Posted by: guest at May 28, 2008 11:14 AM

"But the market is in much better shape than it was in 1989, when there were waves of new condos and coop conversions, coupled with rising interest rates. Prices crashed everywhere."

What have you been smoking? 2006,2007 and 2005 were BY FAR the three biggest years on record for building permits in this city. That does not even take into account the "substitutes" in Hoboken and Jersey City . . . they may be imperfect substitutes, but I can assure you they are substitutes.

Brownstone buildings ARE different, but that will only mean a premium to the generic condo crap that will saturate this market to hell and back.

Prices will trend down over the next 6-8 quarters, followed by 2-3 years flat. In real terms, prices will have fallen 40% before an upturn in the market.

You have been warned. Hate on The What, but despite his obvious flaws, he's been more right than most of the blind cheerleading fools who comment on this board.

You have been warned.
- Not The What

Posted by: guest at May 28, 2008 11:15 AM

Prices are going up; they have to. This is God's country and we have a promise.

Soon they'll be so high that no American will be able to afford them (except me, of course, because I already own a place bigger than I need). Brownstones are a work of art and buyers with Euros will pay whatever they are asked for them. Didn't you see the biggest sales last week?

And it's GOOD for prices to go up. Makes renters bitter. Destroys the prospects of the young. Transfers wealth from the productive sectors of society (who earn it or inherit it) to the unproductive ones (who bought earlier). Makes neighborhoods boring and/or unsafe (depending on how nicely the renters behave as they lose their homes). Drives out those pesky artists and others who make NYC attractive to rich people. Helps continue the hollowing out of NYC economy/increases the importance of Wall St jobs. Most important, the longer NYC stays expensive, the better Philadelphia looks. And Philadelphia looks pretty bad.

Posted by: guest at May 28, 2008 11:26 AM

The What is the man. I read about him in New York magazine.

Posted by: guest at May 28, 2008 11:26 AM

This isn't the 1980s.

The crash in the 1980s was brought on in part by high interest rates and a change in the tax law. Also, as much as I like to be nostalgic about NYC in the 1980s, it was dirtier, more dangerous, and all-around not as easy as a place to live, especially with a family.

Don't forget, in order for there to be a crash here, people need to decide that they no longer want to live in NYC for some reason--will NYC suddenly stop being a world class city with a ton of cache all of the sudden? I doubt it. Seattle isn't NYC.

Posted by: guest at May 28, 2008 11:40 AM

If you were dumb enough to pay too much for a place in an iffy neighborhood you're screwed. Quality NYC real estate is gold. Period.

The What What in Your Butt Butt

Posted by: guest at May 28, 2008 11:40 AM

11:15, prices and sales volume are still going up.

Your post is nonsense.

Posted by: guest at May 28, 2008 11:47 AM

NYC's quality should be fully reflected in rents. That's why the ratio of rents to prices is such a useful tool. Prices are close to double the value of comparable rentals.

Either rents go up (which requires incomes to go up) or prices go down, or there is huge money to be made by converting rentals to sales, building new buildings or converting warehouses. In the long run, no matter how attractive NYC is, purchase prices can't stay double rental prices.

Posted by: guest at May 28, 2008 12:34 PM

"NYC's quality should be fully reflected in rents. That's why the ratio of rents to prices is such a useful tool. Prices are close to double the value of comparable rentals."

This statement, while true is also false at the same time. New York City is a city of 8 million people. It is a city of immigrants and also of unbridled luxury.

You are using the rent to own ratio on luxury properties in Manhattan and prime Brooklyn. That should not be the case. Not ever 25 year old needs a 600k 1 bedroom and not every family needs a 2 million dollar brownstone.

There are many, many areas in this city where the rent/buy ratio works just fine.

I bought a studio in 2007 and pay about 400 less a month than I would to rent an apartment in the same neighborhood. I know many people who live within their means, own property and do not require a rooftop pool and bowling alley to be comfortable.

With 100 million dollar apts at 15 Central Park West and the Plaza, it's easy to get carried away, but look at all the immigrants who come to NYC and buy property. It's a large number of people.

You can not use these ratios on the new luxury stuff. Those places defy all ratios. Go to many parts of Queens, to Midwood, to Bensonhurst, to Kensington where you can still find a nice 1 bedroom for 200K and a 2 bedroom for 300K.

Posted by: guest at May 28, 2008 12:41 PM

since nyc buildings are fairly easily converted from owner occupied to investment properties and vice versa, they have to obey the same economics. Ever hear of arbitrage, Dave?

Posted by: guest at May 28, 2008 12:47 PM

I dont know about this "arbitrage," as you call it, but I do know that the unique properties inherent in the cap rates of Brooklyn rental unit properties, coupled with the dramatic increases in demand without a subsequent follow through in the rent/cap rate relationship should imply that rents should be close to triple sales prices, and likely to remain that way! Or, no, sorry, the other way around. Particularly for financed purchases. You saw this through the early 90's, although admittedly luxury studios veered off a little bit from this trend in 1998. But you get my point in any case, you know? So many people on this board are clueless, no idea what they're talking about.

Posted by: guest at May 28, 2008 1:06 PM

New York City real estate professionals are some of the most self-interested people on the planet, and Brownstoner is simply an "unofficial" avenue by which to hype the NYC real estate market (Snotty parts of Brooklyn in particular).

I strongly recommend not depending on the "New York City is immune" bs you hear so much of on this site.

New York City will indeed be negatively affected, even substantially, but probably not as much as other bubble markets, at least not for a long time. It will though, probably return to pre-bubble levels, but if you have not yet bought a place in this market, you will have to wait a few years to see this, which means, you will also see some neighborhoods increase while the bulk decrease, but don't let that keep you from waiting for the coming crash.

Crash it will, and for anyone who says otherwise, go drink some kefir!

Posted by: guest at May 28, 2008 1:24 PM

99.9% of the comments here are folks' opinions about the housing market in general, and most are rehashing their long-held views that are not going to change.
But the Times story was making a more nuanced claim, namely that for the strongest real estate markets (ie, NYC, Seattle, our beloved Brooklyn), the worst of the market may still be to come.
Couldn't we focus the discussion on this claim about the timing of the housing slump and stay away from the bigger picture (ie, the world is ending, or NYC prices will always go up)
It might be a little more fruitful. . . but maybe that's asking loudmouths on all sides to lower their voices a bit

Posted by: guest at May 28, 2008 1:24 PM

1:24, What I also took from the article is that even in Seattle, the downtown and inner urban core is still holding up.

I think we can say the same for Manhattan and Prime Brooklyn.

Fringe areas and suburban areas will see some declines. No question. But this is also happening at precisely the same time that fewer and fewer people want to live in suburbs and outlying areas.

I see no stopping the increased desirability of areas closet to the city (any city) in the future.

Posted by: guest at May 28, 2008 1:32 PM

Here's the posting I sent to the Times for the original article - it's my response to commenters like 12:34pm...
In NYC, the 'rent ratio' is a fundamentally flawed method for determining whether or not to buy. Unlike so much of the country, where new condo/townhouse/tract development is the norm, in New York it can be very difficult to find rental and sale properties that are truly comparable.
In general, owner-occupied buildings are typically in better repair, are in more desirable/established neighborhoods, and have amenities not available in rentals.
Also, because so many NYC buildings are co-ops, they offer owners a large degree of stability by discouraging rapid turnover & have largely protected owners from the sub-prime mess by requiring buyers to prove they can truly afford each purchase.
Add to this the distortion in NYC rental prices caused by rent stabilization/control [see commenter #13 for a prime example], and you'll see that the 'rent ratio' formula might be useful in places where 'cookie cutter' development is the norm, but it has limited value in more complex markets where the diversity of housing options mirrors the diversity of the population.
Interestingly, as the article itself mentioned, New York's complex market is precisely the one which has yet to see major price declines. So perhaps the housing slump can be compared to a crop failure: just as mono-cultures are far more vulnerable to disease than are diversely planted fields, investing in housing markets which are developer-driven will always be less reliable than investing in housing markets which are resident-driven. It's no small irony that many of the suburban sunbelt houses which are shedding their value are themselves built on land which would have been better left for raising crops.

Posted by: guest at May 28, 2008 1:43 PM

I really enjoyed your post, 1:43. Thank you.

It makes a ton of sense to me.

Posted by: guest at May 28, 2008 1:47 PM

its very simple. as the dollar goes, so will ny real estate. the late 80s/early 90s saw rampant crime, high interest rates, strong dollar. a perfect storm for nyc real estate will be a soft on crime mayor, rising interest rates, rising dollar. that happens and we're in a multi year funk. but remember, this is an island. like hong kong, not many places left to build so supply still thin.

Posted by: guest at May 28, 2008 2:03 PM

you should post that comment more often and everywhere, 1:43. more people need to broaden their scope of what's happening. everytime i hear someone compare nyc to phoenix, or miami, or las vegas or riverside, california leads me to believe that many people here have never been outside the state.

Posted by: guest at May 28, 2008 2:04 PM

I'm with you 9:17, dogs with sunglasses are a riot! RUF RUF!!!

Posted by: guest at May 28, 2008 2:04 PM

New York (Manhattan) is unique this country in that 80% of the non-rental housing stock is co-op. Co-op boards diliginatly review a purchasers financials and make sure they are able to pay for their mortgage and maint. Co-op boards, rarely approved sub-prime borrowers, and did not approve many people who could not pay for their apartment. This is why there is not, and will not, be a massive forclosure crisis in Manhattan. You see a foreclosure crisis in parts of Brooklyn, Queens, and the Bronx, specifically because of predatory lending, targetting sub-prime borrowers who should not have been buying condos they could not afford. I bought a small studi co-op two years ago. While my co-op restricts much of my opportunity to profit while owning (can only sublet 2 of 10 years) they don't let speculators or subprime purchasers in who will lower property values. Oh, and my building is very ethinically and racially diverse. So don't go thinking it only lets in whites. And if you must know, it's York Ave. in the 70's (not a cool area, and a 15 minute walk to the nearest subway.)

Posted by: guest at May 28, 2008 2:12 PM

OK 2:12, you make a good point about foreclosures.
But isn't that really a small part of what might drive the market down in Brooklyn or NYC?
I mean, even if folks don't get foreclosed on, prices might drop because buyers (even qualified ones like 95% of the buyers for a $2 M townhouse) just don't want to pay whatever price is being asked. ..

Posted by: guest at May 28, 2008 2:51 PM

That doesn't seem to be happening here though, 2:51. That's the thing.

Most savvy people know that the bulk of this city is on an island, we don't have unlimited land on which to build and that NYC is the global capital for fashion, the visual and performing arts, finance, advertising, soon to be a major player in the tv and film industry with Ugly Betty moving to NYC, etc...

There is a reason why there are 8.25 million here and the next largest city in the country is less than half that size.

People are infatuated with NYC. Seen the craziness about Sex in the City. It's going to create an entire new wave of people who want to come here...

For better or for worse...

Posted by: guest at May 28, 2008 2:57 PM

How about those 7 people shot in Harlem in an hour? That must have given those new harlem buyer a pause.

Meanwhile if the police had entervened and shot one of them, there would be protests - Where is Al Sharpton now when they shoot each other? that is okay?

Posted by: guest at May 28, 2008 4:01 PM

Responding to 2:51:

I think that the price increases in co-ops in New York (which were never as steep as in condos)(and keep in mind that a co-op will always cost 100-150K less than a comparable condo,) were do to people who genuinely want to live and own in New York for the medium to long-term, and could afford to do so. The boards would not approve speculators, and have flip taxes to discourage flipping, too. I think that New York truly is the capital of the world. It is in many ways unique from the culture of the rest of the U.S., and I think there are *somewhat* different laws of real estate that apply here as well. (for exapmple, I think the more supply you build in new york, the more crowding you will have. A paradox yes, but that's what I've seen.) What's really keeping New York prices high still, is the fact that som many high paying jobs are located in the city and the metropolitan area. There's a new phenomena of suburban retirees selling there homes in Hartsdale, etc... and moving into an apartment on the UWS, instead of moving to Florida or Arizona. ALso, the low value of the dollar is making New York real etate a bargain for foreigners. Only four things can lower NYC real estate prices: If the credit crunch gets worse (although mortgage rates are still very low, historically); If there is massive unemployment; If there is another terrorist attack (although actually I think people will have learned from the bargain hunting of 9/11 and they will snap things up much quicker this time); A good 'ole fashioned crime wave! (I'm hoping for this one, so there'll be less annoying Yunnies and drunk little girls running around.)

Posted by: guest at May 28, 2008 4:03 PM

For Dave the arbitrageur who doesn't understand his own business:

When owner-occupants are willing to pay more than the rental value of a property, rental owners happily sell their rental properties to owner-occupants. None of the current postings or recent sales would be purchased by a rational investor intending to rent it out. That means every landlord could make more money by selling rather than renting. Some will. Supply of owner occupied goes up, of rentals goes down.

Other land owners build new properties or convert non-residential properties or renovate old stuff to current standards or build out or down or up. Supply of owner occupied goes up.

Meanwhile some potential owners decide it is stupid to pay more to live in a home that is going to depreciate than to rent a nicer place. 1:43 thinks it's impossible to compare rents to purchase prices, but the rest of us do it all the time. Some people will decide that paying double for the same living space just to call it "mine" doesn't make sense. Demand goes down.

End result: markets converge. Value of property as a rental and value of property as owner-occupied, long run, will be reasonably close to each other.

Either rents are doubling, or sales prices are dropping by 50%. Since rents are much less susceptible to bubbling, they are more likely to reflect the actual costs and benefits of living in NYC.

NYC may be wonderful and it may be on an island, but that's already built into the rents, not a reason why it should cost twice as much to buy as rent. Co-ops are less likely to be immediate parts of a foreclosure crisis, but they rarely stray far in price from comparable condos, for obvious reasons. Rent stabilization has no impact on the market for expensive apartments, since it doesn't apply once the rent gets over $2k. None of these factors justify an out-of-whack ratio between rents and sales prices. Only tulips do.

Posted by: guest at May 28, 2008 4:14 PM

Prices will go up until buyers start to fear that they might come down. Then they'll come down.

Regardless of crime rates. You can rent really nice places in Brooklyn, without risking losing all your savings.

Posted by: guest at May 28, 2008 4:28 PM

4:14 - you are incredibly misinformed.

YOU need to read comment at 1:43 to see why the rent/own ratio in NYC will never again probably be what it is in other parts of the country.

Posted by: guest at May 28, 2008 4:33 PM

2:57 please...........half the people in this City are here to suck the teet of the government and pass on the tradition to their children. There are 1 million units of public housing (with still the constant cry for affordable and subsidized housing). Then their sons go to prison at a cost of $70,000 a year each. shall I go on?

Millions still on welfare - Save the "top of the heap" stuff for the movies.

Posted by: guest at May 28, 2008 4:33 PM

The people you speak of, 4:33 are not buying property in New York.

So I really don't see your point.

New people are not moving to NYC to go onto the welfare system or to find "affordable housing"

Posted by: guest at May 28, 2008 4:58 PM

4:58 , well if are not moving here for welfare and public housing NOW, they sure did for a good 50+ years.

Posted by: guest at May 28, 2008 6:35 PM

Actually they came for jobs but if you'd rather sound like an ignorant racist, go right ahead.

Posted by: guest at May 28, 2008 6:52 PM

I never mentioned race - you assumed .. limosine liberal.

If they came for jobs, when the jobs left, why didn't they follow? .. oh wait, here comes the knee jerk liberal response, its not thier fault, blame everyone else but take no personal responsiblity, be a victim and pass that down to all your kids too.

blah blah

Posted by: guest at May 28, 2008 6:58 PM

Like I said- ignorant racist. what- did you think no one on this blog knew what you meant? But as I said, be an ignorant racist.

Of course I can assume from your comments about my political leanings you must be a conservative. How quaint and repulsive- especially after 8 years of watching your ilk damage this country and take no responsibility for it. I guess you guys don't mind bleeding money as long as you're bleeding it out to your friends at Halliburton. Yep- the conservative way- take no responsibility, act like you're entitled and pass that down to all your kids.

Posted by: guest at May 28, 2008 7:07 PM

7:07: Nice try to pass the buck. Not every Democrat thinks people should sit their fat arses in public housing all their lives and then raise children to suck off the public teet as well. You, however, were accurately described as a limo liberal. That is why you have such a reaction to the charge.

And no, I am not 6:58. (I know that is what you thought. You LL's are so predictable!)

Posted by: guest at May 28, 2008 7:47 PM

No 7:47- you're not 6:58 but you're just as much a smug and arrogant know-it-all. Sorry to tell you I have as little to do with limos as possible and I also do not believe people- rich or poor- are entitled to "suck off the public teet" It's the Republican Conservatives who have taught us all a lesson in how to suck up public money while hissing at Liberals, who certainly care much more about community, compassion and the welfare of the country. And that costs money- but not nearly as much as the cost of an unnecessary war in Iraq, sending jobs overseas, kissing the butts of the Saudis (because they are soooooo rich), or offering billions to developers for basketball arenas all the while trying to have us believe the community will benefit. What responsibility does Ratner take when he's given all that money? None.

So pleasse don't try to analyze me or my politics- you haven't got the intellect, not obviously, the education.

Posted by: guest at May 28, 2008 8:03 PM

obviously "So please don't try to analyze me or my politics- you haven't got the intellect, nor obviously, the education."

Typing suffers when I'm pissed.

Posted by: guest at May 28, 2008 8:12 PM

logic suffers too, 8:12. If you aren't a LL, you wouldn't be so "pissed." Stop changing the subject to Republicans when I am questioning you and your attitude.

Your attempts to call me smug and arrogant simply point to your own smug behavior and arrogance.

Take a second to look in the mirror.

I have the education and intellect. (That was a sad attempt to belittle me.)

What you lack is self awareness.

Class dismissed.

Posted by: guest at May 28, 2008 8:53 PM

"Stop changing the subject to Republicans when I am questioning you and your attitude." You are kidding right? (sheesh! talk about lack of self-awareness) Did you not notice that all you did was repeat back my sentences? No axioms, no arguments, no bullet points- All you are able to do (and not very well) is make vague generalizations and attempt to use your much less than rapier wit.

If you have education and intellect it isn't obvious from your posts.

Posted by: guest at May 28, 2008 10:30 PM

4:14 here. 1:43 thinks that NYC sales prices need not have any relation to rents for 3 reasons, each silly. 1. "Rentals and sales are not comparable in NY unlike the rest of the country." This is precisely backwards. It is easier to rent quality housing in the nice neighborhoods in NY than anywhere else in the US. In most of the rest of the country, rentals for upper income people are virtually all short-term. 2. "Coops encourage stability and reduce the likelihood of subprime driven bubbles." This is correct, but irrelevant. To the extent that coops managed to exclude funny financing (and they can't police all of it), they picked off the better owners, leaving the marginal ones to drive the condo and house markets. But in fact coop prices haven't strayed far from comparable housing, including condos, private houses, so obviously potential buyers have viewed them as largely comparable. So as the bubble deflates, they are most likely to do the same. 3. "Rent stabilization distorts rental prices." No doubt, but no one suggests comparing stabilized rents to purchase prices of unstabilized units. Compare like to like: stabilized units sell for numbers that only make sense if they include a high probability that the stabilized tenant can be forced out illegally, and unstabilized units, including brownstones, sell for prices that make sense only if the owner believes that prices need not make sense. (See Dave's explanation for an example of that).

As for Dave at 4:55, obviously he learned his debating skills on talk radio: if you are wrong, just call your opponent names. If he actually had any reason to think that normal rules of competitive markets have been repealed in NYC he'd offer them.

Posted by: guest at May 29, 2008 8:25 AM

4:33 -- until the last decade, the rent/own ratio was always HIGHER in NYC than the rest of the country, because NYC had a deeper rental market with more options at more income levels than anywhere else. Elsewhere, owners paid a premium for luxury that they didn't need to pay here.

What has changed, other than the bubble? Not co-ops -- they've been around since the 1920s. Not a sudden disappearance of luxury rentals -- they get easier to find each year with new construction and renovated apartments coming off rent regulation. The density, crime rate, island, subways, garbage on the streets, and the rest of the reasons why NYC is better than it used to be and better than Boston/Chicago/SF/DC/LA/Westchester all apply equally to the rental market.

Posted by: guest at May 29, 2008 9:33 AM

Here is what is different: Buyers used to demand a discount because of the risk that the city would collapse around them. Now they pay a premium to avoid the risk that it will gentrify beyond their finances.

They are willing to pay more today because they think prices are going to go up tomorrow. That's the definition of a bubble.

Posted by: guest at May 29, 2008 9:36 AM

Good morning 8:12. This is 6:58 - and the other poster Quest is not me. But thank you Quest for your stance.

Just an FYI - so perhaps you can learn - I am lifetime New Yorker (born here, parents born in Bronx, Brooklyn). I am a democrat. I get up and go to work every day, even when I don;t want to. I do not think I am entitled to anything from anyone. AND I think the same goes for everyone else. Unlike LLs, I do not make excuses that there is some reason others cannot do the same. NO, get off your ass,go to work, go to school - and and the very least, make sure your children do not make the same mistakes you did. Be responsible - school is bad? move. read to them, etc. kids are expensive? don't have another one. common sense stuff. like Everyone else.

Posted by: guest at May 29, 2008 10:12 AM

good morning to you 10:12- and quest- who provided me some fun but is nowhere near challenging enough.

FYI my background is pretty much the same as yours. And so are my politics- so for you to accuse me of being a limo liberal was pretty much based on the fact that I took you to task on on your statements. Since I live in a mostly Black neighborhood and have probably more contact on a personal/family level than most white people seem to, I find blanket statements using- and we all know what they are- the special "NYC code" for the Black community. There is a huge number of working poor in NYC who so everything you do on far less money. I make no excuses for the ones who don't take responsibility, but no one seems to mention the ones that do because people like you are so busy using labels and generalities (such as calling me a limo liberal, hmmm?) that you lose sight of the fact that there are far more people in the Black and other ethnic communities who do exactly what you think they ought.

In so far as being a limo liberal- would that I could afford to be. I happen to be far closer to working class than limo class. But a liberal? You bet- and proud to be. Conservatives- look around you. 8 years of so-called conservative policies haven't done much for us. Where's their common sense?

Posted by: guest at May 29, 2008 11:45 AM

11:45. You are still clueless. I repeated your comments because they apply to you more than anyone else on this thread. Obviously, your thin skin can't handle the comments.

Since you are an idiot who only understands being bitch-slapped to sanity, here goes...

Here is what you said about another poster ....

http://www.brownstoner.com/forum/archives/2008/05/kitchen_solariu.php#comments

Since you are an idiot, you were responding to this comment ....

http://www.brownstoner.com/forum/archives/2008/05/kitchen_solariu.php#comments

You made all the ASSumptions that had no basis in reality.

You are an idiot and you don't even remember what you wrote or why you wrote it. You can't follow your own thoughts. How stupid are you?

I was commenting on your inability to accept that there are some Democrats who expect others to work for a living.

As for your idiotic and racist comment about living in a black community so you must understand black people better, you simply prove my point. "I am a white liberal and I know things about blacks that you don't" Get off your high horse. First, stop implying that everyone is referring to black people when they use "NYC code". That is so racist. And living among black people isn't special. Lots of people do it. Your bleeding heart silliness reeks.

Here is a clue for you: black people are just like everyone else. Well, not like you, since you are a limo liberal.

Another clue: There are lots of poor people in this city who aren't black or white. Expand your horizons. That means you need to get out of your limo and start actually intereacting with people in the city instead of trying to insult them before you hide in your little bubble.

Posted by: guest at May 29, 2008 1:54 PM

11:45: I thought you were "pissed" by your 8:12 PM post. Now you found it "fun." You are a liar and a revisionist historian. You sound like a Republican.

Posted by: guest at May 29, 2008 2:55 PM

11:45: Where are you from? You don't mention exactly. You just skim over that piece of information.

Posted by: guest at May 29, 2008 3:03 PM

Interesting. 11:45 doesn't want to answer any quesitons. Must be afraid to tell the truth. Wonder why?

Posted by: guest at May 29, 2008 4:23 PM