Last Week's Biggest Sales

Adelphi: "purchased for $1,300,000 in 2003"

Congratulations to the sellers for timing an optimal cash-out. It is 2003 that we are headed for, price-wise, or worse.

Posted by: guest at June 30, 2008 11:40 AM

Holy housing slump!

Posted by: guest at June 30, 2008 11:57 AM

Really, 11:40, we're headed for $227 per square foot luxury brownstone prices . . . great.

Posted by: guest at June 30, 2008 11:58 AM

11:40- Haven't people like you been telling us that 2002-2006 were the very top of a blistering market and if you didn't sell before 2007 you were screwed?

Seems like your statement is totally contradictory to what the naysayers have been preaching

Posted by: guest at June 30, 2008 11:59 AM

"clear evidence"

Case-Shiller Index. Crystal clear...YES

Posted by: guest at June 30, 2008 12:08 PM

South Slope is ON FIRE!!!

Posted by: guest at June 30, 2008 12:15 PM

"Seems like your statement is totally contradictory to what the naysayers have been preaching"

Not what it seems. We're consistent with the process, not the event. This boom/bust is on nobody's schedule. It strikes when and where it wants.

You cannot deny that prices are trending downwards. Cherrypicking a nabe or two is data spin. The boom was not confined to Fort Greene and South Slope. Neither will immunity be. In fact, there is no immunity. Just one economic pie to take slices from.

Posted by: guest at June 30, 2008 12:24 PM

I thought no one could get a mortgage??

These prices are IMPRESSIVE!

The naysayers are fools.

Posted by: guest at June 30, 2008 12:30 PM

Gowanus is UNDER WATER!

Posted by: guest at June 30, 2008 12:41 PM

12:24, your rent is due tomorrow.

Posted by: guest at June 30, 2008 12:49 PM

Boerum Hill is HOTT!! Best neighborhood in Brooklyn - by far. I'm moving here as soon as I sell my 1br on the UWS. Looking to buy 2 br in Boerum Hill for cash. Again, great neighborhood & prices can only go up here. Anyone know about the BAM Cultural District? I like that particular area.

Posted by: guest at June 30, 2008 12:59 PM

The conversations on here would be more interesting if there was more talk about what people liked and didn't like about properties and was less about speculation on prices going forward. Nobody knows what prices are going to do- if they did they'd be getting rich in real estate already and wouldn't be wasting their time reading the comments on brownstoner.

Posted by: guest at June 30, 2008 1:02 PM

These prices are AMAZING.

Between the Connelly mansion, PPW and these South Slope places, I'm really impressed with the sales in Park Slope in 2008 so far. Those are some serious numbers.

Posted by: guest at June 30, 2008 1:04 PM

Thanks, 12:49. It's under $1,000 (utilities free!!!) in a Prime Clinton Hill floor-through. What is that, your maintenance?

Posted by: guest at June 30, 2008 1:08 PM

1:02 you should read the first comment under the two condos for sale...not only does he know how much they will fall in price but by when!!!

But you are correct and I apologize for not adding anything.

Posted by: guest at June 30, 2008 1:08 PM

The flooded canal will keep the marauding western hordes at bay.

Posted by: guest at June 30, 2008 1:15 PM

I have a very close friend who works in the Real Estate business. She's quite well respected and is really great at her job, from what I can tell.

She said there is definite softening in the market in terms of sales, although she said it's about on par with sales pre-2002 or so. She also told me that it really depends on the neighborhood also. She said that for some reason, Park Slope is super hot right now and that there are a ton of people looking to get in on what they view a softer market. She works mostly in the Manhattan market, but said she has more clients ask about Park Slope than any other neighborhood right now.

Does anyone know why that is the case? I asked her and she hyped the neighborhood and said it's become what the West Village was in the 1980's and 90's, but what is it about PS that makes it so desirable? I think it's a fine place, but what is it about it that so many people love?

Posted by: guest at June 30, 2008 1:24 PM

"The conversations on here would be more interesting if there was more talk about what people liked and didn't like about properties and was less about speculation on prices going forward."

Wrong. Your response implicates your interest.

"Nobody knows what prices are going to do- if they did they'd be getting rich in real estate already and wouldn't be wasting their time reading the comments on brownstoner."

Nobody's betting their life on prices. We all know there's no guarantee on our predictions. When we say we KNOW, it's code for we PREDICT. The comments are a pulse of market psychology and are in no way a waste of time. It is underground sources like brownstoner comments where you find the truth, not the mainstream media that is designed to control popular opinion for the economic gain of a few men and women.

Posted by: guest at June 30, 2008 1:28 PM

There's no such thing as "prime" Clinton Hill.

Posted by: guest at June 30, 2008 1:38 PM

No more about Park Slope...we get it...it's the best neighborhood in the entire city, heck the entire universe...aliens would move there, if they could afford it.

Posted by: guest at June 30, 2008 1:40 PM

Brownstoner, can you stock the thread hijacker who endlessly cuts and pastes?

PS may be on fire, but I have several friends who've had to drastically cut the prices on their places to see any interest, so even that fire is cooling. Plus, I know from talking to realtors (we're in market for a townhouse) that they are getting *much* more negotiable. Does that mean you can pick up a prime PS tonnhouse for 200 psf? No, of course not. But can you get a substantial discount from the kinds of prices that are currently listed? Yes, from the evidence I'm seeing. Keeping the sales reports coming Brownstoner, I'm sure it will show the market is indeed softening, even in PS...

Posted by: guest at June 30, 2008 1:58 PM

FG is hot. Used to be that if any Manhattan yuppy (transplants AND born and bred Manhattanites) had heard of ANY Bklyn nabes, it was only Bklyn Heights, and maybe PS. Now, a lot of them seem to know all about FG too. I guess Spike Lee's movies started some public recognition of the area back when and BAM has heavily invested in its profile since the 90's. Those aren't the only mechanisms behind it, of course.

We saw the house on Lafayette. It was okay but needed some work, probably somewhere approaching 75-100K (fixing some structural issues, windows, kitchen and bath redos)so the ownership price is really 2M. I'm not shocked though. The location is majorly prime. Minutes from nearly every subway in NYC, the LIRR (walk to the train and you're off to Shelter Island!), BAM, restaurants, some very decent food shopping, a block from the park and the Saturday green market, and, yes, just a couple blocks from the Flea. I wish the new owners years of enjoyment.

Wish we had nabbed that house.

The house on Adelphi was very, very, very nice but I am wowed at the sale price for a non-South Portland/Washington Park house. Geez Louise!

PS despite the rain yesterday later on, the Flea was terrific. Kudos and congrats!

Posted by: guest at June 30, 2008 2:04 PM

"There's no such thing as "prime" Clinton Hill."

There's no such thing as "prime" rib.

Posted by: guest at June 30, 2008 2:40 PM

Well, obviously some houses are still selling at bubble prices -- not many though.

Potential buyers need to seriously consider the financial affect of even moderate price drops. If Ft Greene drops 10% in the next year, someone who puts down 20% will have lost half their equity, and someone who rented for the year will have picked up an extra 200k -- nothing to sneeze at and more than enough to cover 2 or 3 years of very high rent in the Washington Park triplex rental.

But a 10% drop is wildly optimistic. To return to trend and normal ratios of purchase cost to rental value and replacement costs, prices need to drop closer to 50% than 10%.

That's what's happening now in LA and SF. We're just about a year behind them. 2003 is on its way all over the country; it'll arrive here too.

Posted by: guest at June 30, 2008 2:52 PM

"The folks at 209 Dean are a bit optimistic in this market, don'cha think?

Posted by: johnife at February 8, 2008 1:28 PM"

Nope.

Posted by: guest at June 30, 2008 2:54 PM

"But a 10% drop is wildly optimistic. To return to trend and normal ratios of purchase cost to rental value and replacement costs, prices need to drop closer to 50% than 10%."

Translation:

"I have been outbid three times and I'm pissed. How much longer can this stuff keep selling at these prices?! I have a nice down payment but can't get anything closed. Waaaaah, it's not fair. Guess I'll keep renting for a year and try again later."

Posted by: guest at June 30, 2008 3:05 PM

"That's what's happening now in LA and SF"

No it's not. Prices in Los Angeles have dropped less than 20% and they have dropped around 9% in San Francisco.

Posted by: guest at June 30, 2008 3:15 PM

Whoever keeps talking about the purchase cost to rent ratios is an idiot.

New York has never had a purhcase/rent ratio like the rest of the country.

NEVER. To suggest so, shows your utter ignorance.

Posted by: guest at June 30, 2008 3:26 PM

2:52pm is what I like to call "the other side of the trade." This guy keeps waiting & waiting for NY to "revert to the mean." PLEASE, this is NY, buddy! Ain't happening.
The bull market in real estate ended 4th Q of 2005. We're now in the 3rd Q 2008 and prices in Brownstone Brooklyn are, at best, 5-10% negotiable from the peak ask. Housing busts typically last 3 years to trough & that begins next Quarter. NYC only softened. Plus we have a National trend toward reurbanization due to high energy costs & municipality failures resulting in high suburban property taxes. Demand is mad strong right now & those buyers sitting on the sideling the past 2 years are starting to make a move back in as the bright ones see that Brownstone Brooklyn ain't falling. 421A abatement is over. Any oversuppply by developers turns rental. Community boards won't allow high rises in Brownstone Brooklyn. Supply is limited. Whatcha thinks gonna happen to prices 1 year from now. God, what an idiot. Good luck earning interest of 2% on your down payment in your HSBC money market & keep mailing me your rent check & my mortgage which I'll deduct from my income. Love renters!

Posted by: guest at June 30, 2008 3:49 PM

I don't have a mortgage! I sold my Manhattan 2 bedroom and bought a HOUSE in Park Slope!!!

See ya suckers!

Posted by: guest at June 30, 2008 4:07 PM

... and I have a HUGE schlong!!

-4:07

Posted by: guest at June 30, 2008 4:21 PM

Get out your rubbers boys...it's gunna be a LOOOOOOOOONNNNG NIGHT!!!

- The Late and Great Anna Nicole Smith

Posted by: guest at June 30, 2008 4:33 PM

Useless drivel from the What again.

Oh no...studios are renting for $2800 and 1 bedrooms for $3500!!!

The wold as we know it is OVER!!!

Posted by: guest at June 30, 2008 4:45 PM

Don't worry 4:45, teh war is over on January 21, 2009 per the What. After that he and his cut and paste skills will disappear.

Posted by: guest at June 30, 2008 5:21 PM

?Whoever keeps talking about the purchase cost to rent ratios is an idiot.
New York has never had a purhcase/rent ratio like the rest of the country.
NEVER. To suggest so, shows your utter ignorance."

This comment is weird. Or maybe just badly written. Of course NY had a purchase/rent ratio. How could it not?

On the other hand, it is true that until the last few years NYC's ratio was different from the ratio elsewhere: we have a better selection of rentals, so the premium for buying was LOWER than elsewhere. In the rest of the country, people often have to pay a premium to buy because there are no comparable rentals. Here, you may have to look a bit, but you can rent in every neighborhood and at every quality level.

When the rest of the country was paying 15 times annual rent to buy, New Yorkers were paying 10. When I bought, at the peak of the last cycle, I paid 11 times annual rent, and it was historically high, both before and after.

So when you read the articles suggesting that LA and SF are heading for real corrections on the order of 1/3 or 1/2, figure we have the potential for worse.

Posted by: guest at June 30, 2008 6:15 PM

"The bull market ended in 2005" but prices have gone up 20% since then. Doesn't sound like much of a peak to me. But "PLEASE, this is NY, buddy! Ain't happening."

In NY, the laws of supply and demand have been repealed. Just because demand is heading down -- the professionals have been priced out of Park Slope, the Wall Streeters are getting fired, super-jumbo mortgages are virtually dead, Europeans have less cash (and less willingness to risk it on a depreciating dollar). And supply is up: the color-bar has (partly)lifted so that gentrifiers are now willing to spread out into 10x as much area as a decade ago, renovations and new construction have close to doubled the elite housing stock in the older areas, and condos are on the march. None of that matters. PLEASE, this is NY, buddy! Ain't happening.

Here in NY, we have an infinite supply of people with $3m cash who want to live in PS (or Boerum Hill) and don't care if prices drop because they aren't ever moving again (unlike those flitty actresses, Wall Street tycoons never change jobs and they love the hassles of homeownership).

And why not -- the bars are awesome. I mean, 15 years ago, there were 2 decent neighborhood places; now there are, what, almost as many in all of Brownstone Brooklyn as on one block of the UWS. Clearly, that's why prices are up. Fantasies of permanent profit and instant wealth have nothing to do with it.

Posted by: guest at June 30, 2008 6:34 PM

"New York has never had a purhcase/rent ratio like the rest of the country."

I don't know. Go to corcoran's neighborhood profile area and compare median/average incomes to what prices used to be (-67%). Incomes haven't changed (virtually). Debt has.

Posted by: guest at June 30, 2008 6:42 PM

um...I hate to break this to you, 6:15, but comparing the vast, sprawling, unlimited desert of the Los Angeles basin to the island of Manhattan (and prime parts of the boroughs) is completely and totally ignorant.

You have a lot to learn about supply and demand.

I've heard zero predictions for prices to halve in LA or San Francisco. The worst prediction I've heard is on the order of 35% in places like Las Vegas, Miami and Phoenix and lesser amounts around the country. Notice where the worst is happening...in places where huge speculation and enormous supply have outstripped demand.

Now tell me how that correlates to NYC where we pack them in by the millions, live on top of one another and most building has, is or will be coming to a halt. I know of no other city in the country expecting 1 million new residents in the next 20 years.

Posted by: guest at June 30, 2008 7:22 PM

Well 6:15,

There will be lots of boohooing in Brownstone Brooklyn by all those who paid 15x and 20x annual rent if your predictions hold true… But it also seems there is a premium being paid for the privilege/status issue tagged to buying in Brownstone Brooklyn that needs to be factored in. Admittedly, the people who paid 650-950K for homes in parts of Queens and Staten Island (and admittedly parts of Brooklyn) are those who are suffering right now, esp. the new constructions. But you have to look at it neighborhood by neighborhood. Frankly, the rents are so high in parts of Brownstone Brooklyn, the prices to own are not too far off from the 11x and 15x figure. I just did the calculation for a number of houses in FG which I know well. I found the sale prices are not that far off from the rent rolls x 12 to 15.

Not all sale prices are very sane right now, no. Some houses went for vanity prices. If one can afford a 3m house in FG, enjoy. It’s definitely a status thing. Those homeowners will probably not be relying on the rental income.

Heck, personally, we are fine paying more than we might to rent. We are “chez nous” and like it that way. Maybe if you’re weighing renting a 2-bedroom to buying a 2-bedroom, renting would make more sense. I don’t know. But owning a brownstone/townhouse is something else. Frankly, it would be fascinating to do a study on people’s attitudes and their “consumer confidence” from group to group: renters and owners in all categories (studio renter to brownstone owner to absentee landlord, to new high-rise coop owner or renter)…sounds like a grant-writer’s special. Anyone out there who can write a wicked grant.proposal?

I would argue there is tighter market for rentals in NYC than in the other cities you mentioned. I don't feel you are correct in your statement that "you can rent in every neighborhood and at every quality level.” But, I may be wrong. Maybe you can rent a brownstone if you nose around…somehow there just don’t seem to be that many available in BB or that many people even interested in renting a house. If someone wants to rent and not buy due to work/life/expected residency, most families who could afford to buy a brownstone might simply rent a big 3 or 4 bedroom apartment, though I hear those are hard to come by as well. Why would someone transferred to NYC for work with the clear possibility of moving in 5 years buy a brownstone? They’ll probably rent a large apartment and call it a day…and yes, rent in Park Slope (I know people in this category).

Also, another reason apartment-living is less desirable in NYC, it seems a majority of rentals in older housing stock is rather blechy and as a renter, you can't do much about it. At the high end of the spectrum (say on the UES) if you want to rent a whole brownstone you pay a major premium. I believe it’s the same in Bklyn Heights. Also, in terms of renting, a lot of the apartments in Manhattan in desirable areas are coops with fairly stringent rental policies keeping those units out of the general pool.

Remember to keep in mind something else: you write, "at the peak of the last cycle, I paid 11 times annual rent...” I'm not sure what cycle you're referring to, but think, for a moment, if you bought for 11x annual comparable rent for your home and if that cycle you're referring to was the downturn in 1990, then, reflect that you're well on the way to being done with a 30-year mortgage (if you have one), have a great equity stake, can do what you want to your home as the owner, may even have much lower carrying cost now than if you had been renting all along and had to keep paying rent increases year-over-year.

Listen, as more and more existing rentals in NYC are being "destabilized", rents hitting new highs in Brownstone Brooklyn, etc. the cost of ownership with the added intangibles of status, perceived investment, etc., the pressure on the rental market will continue to put pressure on the real estate market in general. Plus, demographics has pushed the desirability and competition for Brownstone Brooklyn. The very last boomers (b.1962) in their mid-forties are actually vying with the immense wave of the 30-something boomletters (born in the 70’s to the earlier boomer born after WWII). The boomlet is just in full swing and the “stroller phenomenon” will go on for another good 5 to 10 years as the kids born in 1987 hit the housing market. The twenty-somethings have already made their presence felt and there plenty more in the pipeline behind them ready to fill their shoes/apartments.

Thanks for your thoughts. It made me do some thinking, as you note above. I don’t refute your premise that we may go back to historical levels but, that level in desirable areas may settle at the x15 mark and a city like NYC may have many real estate pressures not at play in the cities you mention above. Of course, people will point to the fact that NYC’s population has not grown very much but I have felt that those demographics figures are a bit incorrect, that many people go uncounted. And anyway, raw numbers do not usually take into account the sift in demographics which are at play causing neighborhood shifts.

FGG

Posted by: guest at June 30, 2008 8:07 PM

Well 6:15,

There will be lots of boohooing in Brownstone Brooklyn by all those who paid 15x and 20x annual rent if your predictions hold true… But it also seems there is a premium being paid for the privilege/status issue tagged to buying in Brownstone Brooklyn that needs to be factored in. Admittedly, the people who paid 650-950K for homes in parts of Queens and Staten Island (and admittedly parts of Brooklyn) are those who are suffering right now, esp. the new constructions. But you have to look at it neighborhood by neighborhood. Frankly, the rents are so high in parts of Brownstone Brooklyn, the prices to own are not too far off from the 11x and 15x figure. I just did the calculation for a number of houses in FG which I know well. I found the sale prices are not that far off from the rent rolls x 12 to 15.

Not all sale prices are very sane right now, no. Some houses went for vanity prices. If one can afford a 3m house in FG, enjoy. It’s definitely a status thing. Those homeowners will probably not be relying on the rental income.

Heck, personally, we are fine paying more than we might to rent. We are “chez nous” and like it that way. Maybe if you’re weighing renting a 2-bedroom to buying a 2-bedroom, renting would make more sense. I don’t know. But owning a brownstone/townhouse is something else. Frankly, it would be fascinating to do a study on people’s attitudes and their “consumer confidence” from group to group: renters and owners in all categories (studio renter to brownstone owner to absentee landlord, to new high-rise coop owner or renter)…sounds like a grant-writer’s special. Anyone out there who can write a wicked grant.proposal?

I would argue there is tighter market for rentals in NYC than in the other cities you mentioned. I don't feel you are correct in your statement that "you can rent in every neighborhood and at every quality level.” But, I may be wrong. Maybe you can rent a brownstone if you nose around…somehow there just don’t seem to be that many available in BB or that many people even interested in renting a house. If someone wants to rent and not buy due to work/life/expected residency, most families who could afford to buy a brownstone might simply rent a big 3 or 4 bedroom apartment, though I hear those are hard to come by as well. Why would someone transferred to NYC for work with the clear possibility of moving in 5 years buy a brownstone? They’ll probably rent a large apartment and call it a day…and yes, rent in Park Slope (I know people in this category).

Also, another reason apartment-living is less desirable in NYC, it seems a majority of rentals in older housing stock is rather blechy and as a renter, you can't do much about it. At the high end of the spectrum (say on the UES) if you want to rent a whole brownstone you pay a major premium. I believe it’s the same in Bklyn Heights. Also, in terms of renting, a lot of the apartments in Manhattan in desirable areas are coops with fairly stringent rental policies keeping those units out of the general pool.

Remember to keep in mind something else: you write, "at the peak of the last cycle, I paid 11 times annual rent...” I'm not sure what cycle you're referring to, but think, for a moment, if you bought for 11x annual comparable rent for your home and if that cycle you're referring to was the downturn in 1990, then, reflect that you're well on the way to being done with a 30-year mortgage (if you have one), have a great equity stake, can do what you want to your home as the owner, may even have much lower carrying cost now than if you had been renting all along and had to keep paying rent increases year-over-year.

Listen, as more and more existing rentals in NYC are being "destabilized", rents hitting new highs in Brownstone Brooklyn, etc. the cost of ownership with the added intangibles of status, perceived investment, etc., the pressure on the rental market will continue to put pressure on the real estate market in general. Plus, demographics has pushed the desirability and competition for Brownstone Brooklyn. The very last boomers (b.1962) in their mid-forties are actually vying with the immense wave of the 30-something boomletters (born in the 70’s to the earlier boomer born after WWII). The boomlet is just in full swing and the “stroller phenomenon” will go on for another good 5 to 10 years as the kids born in 1987 hit the housing market. The twenty-somethings have already made their presence felt and there plenty more in the pipeline behind them ready to fill their shoes/apartments.

Thanks for your thoughts. It made me do some thinking, as you note above. I don’t refute your premise that we may go back to historical levels but, that level in desirable areas may settle at the x15 mark and a city like NYC may have many real estate pressures not at play in the cities you mention above. Of course, people will point to the fact that NYC’s population has not grown very much but I have felt that those demographics figures are a bit incorrect, that many people go uncounted. And anyway, raw numbers do not usually take into account the sift in demographics which are at play causing neighborhood shifts.

FGG

Posted by: guest at June 30, 2008 8:23 PM

I said it before and I'll say it again, the housing slump is indeed a problem, but it is not the entire US economy. What's more, some locations will not be greatly influenced by the credit crunch/subprime meltdown. Much of this was overstated from the beginning, by a liberal media eager to finally see the Bush economy fail. And yet it hasn't. To the utter anger and annoyance of those who want to blame Bush for everything from the black plague to the end of times. Bottom line is, there was a severe subprime mortgage meltdown which managed to slow the economy but not sink it. Much of the economic loss has been absorbed and discounted by Wall Street by now. Add to that mix, an overdemand for oil and raging liberals and you have the widespread media fed panic of a meltdown.
It doesn't help that we have assclowns like the one who regularly posts here, stirring up more fear with their "sky is falling" mentality. Still, we are in the midst of a worldwide economic boom, and the US is a pretty large part of the world economy so we are not sunk. Still no recession and most economists including the fed say there will not be one. sorry libs (but that won't stop them from saying we are doomed, anyway).
Add it all up and you see that housing prices are softening but not crashing, forclosures are up but not at mass exodus levels, rental markets are strong and prime housing areas of NYC remain prime.
As usual, the truth stands between both ends of the spectrum of lies that so typically characterize our economic and political discussions these days. Unfortunately, as long as most of the US only relies on the traditional liberal-slanted news sources, the disconnect between the hyperbole and the reality will continue, as will the growing resentment between those that own property and those that are resentful that they can't own in prime areas.
Solution, read the Wall Street Journal AND The NY Times. If you want to own, consider a brownstone in softer areas like crown heights and bed-stuy. Fort Greene was considered "marginal" even 20 years ago, after all.

Posted by: guest at June 30, 2008 8:43 PM

i'm not saying that brooklyn is cheap but compare it to cities like london, tokyo, or rome and you will find it not that crazy expensive, so if you don't like the prices and you want to buy something maybe you should look somewhere else.

Posted by: guest at June 30, 2008 10:17 PM

"Well, obviously some houses are still selling at bubble prices"

Yup, it's the same bubble you swore was gonna burst back in '96 so you DIDN"T buy that PS brownstone for $250k. You're a deluded BITTER RENTER and you always will be!

Posted by: guest at June 30, 2008 10:27 PM

People - we are looking for a townhouse in Park Slope and have had numerous brokers tell us to make an offer, any offer on a number of houses that are clearly not going to get anywhere close to their asking prices. A quick glance at Corcoran will show that yes, even Corcoran has been caving in and lowering prices. So those who say it can't happen in NYC are just plain wrong. Not saying the world will end or prices will plummet, but I think 10% decreases are easily forseeable, if not more. We sold our apt a few months ago so we are not "bitter renters" (in fact, we are very happily renting now while we look for a house, and content in the knowledge that when we find one, we won't have the stress of *having* to sell in this market, since we know people in that position and they are having to accept less $ than hoped for). We're not holding our breaths for a reversion to 2003 prices but we're also seeing a lot of evidence that things can slide back quite a bit. And for those who say we're at the bottom now, we really are not - if anything, the shift in the market is only starting. Prices have been astronomical up through this spring, and are still high, probably because now brokers/sellers are factoring in that buyers will not offer ask, but expect at least at 10% discount... But then properties linger and have to have a 10% price cut anyway, and then still linger...The sellers who will do well are the ones who realize that yes, demand is out there, and you can still make lots of money on your property (assuming you bought before 2005) if you price it realistically - heck, you may even get a bidding war, but the key really is a price point that makes sense and takes into consideration the weakening market...

Posted by: guest at June 30, 2008 10:41 PM

These prices are making me almost crap my pants. It is disgusting. Those prices so, what you can live in NY. I just can't believe it has come to this.
Time to move to Texas where I could buy fifteen huge houses for that money.
I know, good riddance to me. But who is buying these damn houses?

Posted by: guest at July 1, 2008 12:26 AM

Three million dollars to live next to all you Ass Hats. Damn Lew weaze.

Posted by: guest at July 1, 2008 12:30 AM

The beauty of comparing rents to purchase prices is that rental values, in a fairly open market such as we have in (destabilized) NYC, will capture neighborhood changes, urbanization, crime decreases, job markets and so on -- without the distortion of people overpaying because they think that prices are going up or underpaying because they think that prices are going down.

Renters pay for current value, not for guesses about the future (that's what makes the "bitter renter" ranter so angry at them: he thinks that grasshoppers should always die and that ants are guaranteed survival just because they are less happy). So they are a good way of figuring out how much of the market is fluff/hysteria/"liberal media"/boosterism hype/etc and how much is really that NYC (or PS) has become a more attractive place for affluent people.

Even if some people will only buy houses or only live in doorman buildings, or some will only own and others only rent, so long as enough people will switch based on value or investors can convert one type of building into another, the market will eventually adjust towards equilibrium, in which values are roughly equivalent.

In my neighborhood, rental costs are half of purchase costs, even after adjusting for quality and especially at the higher end. Purchase to rent ratios are well over 25. If they are 11-15 in yours, buying is probably fairly safe, assuming you can sit out the Wall St bust, the credit crunch, and the possibility that the housing market will overshoot on the downside as those things work through.

Posted by: guest at July 1, 2008 9:55 AM

for 7:22 who hasn't heard any predictions of price declines this time around that resemble the ones in the early '90s: try reading this blog, or any other real estate blog, or just look at the Case-Shiller indices and extrapolate the curves back to trend.

And remember to add in inflation. If the whole process takes 5 years, and inflation is running at 4%, even flat nominal prices will mean a loss of close to a quarter.

Posted by: guest at July 1, 2008 10:00 AM

for 7:22 who hasn't heard any predictions of price declines this time around that resemble the ones in the early '90s: try reading this blog, or any other real estate blog, or just look at the Case-Shiller indices and extrapolate the curves back to trend.

And remember to add in inflation. If the whole process takes 5 years, and inflation is running at 4%, even flat nominal prices will mean a loss of close to a quarter.

Posted by: guest at July 1, 2008 10:06 AM

Here is an interesting chart showing the collapse of the securitization market. http://www.nakedcapitalism.com/2008/06/death-of-securitized-mortgages.html

Why is that relevant to PS?

1. Securitization has been a big source of Wall St profits, and Wall St profits directly and indirectly (via Manhattan sales) drive a good deal of the demand in our market. No securitization means fewer bonuses means fewer bankers buying 2 BR coops for silly prices means fewer cashed-out Manhattanites buying overpriced brownstones.

2. No securitization means that banks that make big mortgages need to hold them rather than sell them. Which means they need to have equity reserves to support the loan. But they don't. So, it's going to be hard to get jumbos and harder to get superjumbos and impossible to get no-income verification loans. Which means that professionals trying to compete with the rich by borrowing aren't going to be able to.

Reduced demand plus increased supply -- prices are going up, up, up. At least once securitization resumes, when investors figure out how to price these things. Jumbos should come back relatively soon, say within a few years of a clear real estate market bottom. Liar's loans/Alt-As--not so clear.

Posted by: guest at July 1, 2008 10:13 AM

As usual, it shows that real estate is LOCAL! Credit crunch, mortgage crisis and housing slump don't mean a thing in NYC where salaries are high. It means something in Miami, Vegas, California, Texas where people with low income have been trying to speculate and got burnt.
People who buy townhouses or brownstones usually intend to live in it and are not speculators.

There are not many beautiful historical browstones on the market and these will always keep their value. It's pretty simple. Historical brownstones supply is limited. 1BR/2BR new condos supply is unlimited.

Posted by: guest at July 1, 2008 10:16 AM

No bubble here. Everything is just peachy. Roses and Sunshine!

Good Luck.

Get A Clue.

Posted by: guest at July 1, 2008 10:22 AM

historical brownstone prices march in lock step with condo prices, usually somewhat behind them on a psf basis.

And while the supply may be limited in some metaphysical sense, in the bubble years it has increased rapidly through (1) conversions from rentals and (2) expansion of neighborhood boundaries. No one would have called yesterday's HOTD a historical brownstone 10 years ago.

So increase condo supply and increased "brownstone" supply should have the same effects on prices. They'll keep their value just as they did in e.g., 1930-1950; 1968-1978; 1988-1995.

Posted by: guest at July 1, 2008 10:38 AM

No jumbos means the lawyers join the artists, professors, etc: priced out. Now it's just best-sellers and movie rights driving the market.

Posted by: guest at July 1, 2008 10:43 AM

10:38 AM,

Uh...

"No one would have called yesterday's HOTD a historical brownstone 10 years ago."

Sorry to break to the news, but many would probably not call yesterday's HOTD an historical brownstone today.

Prime is prime. Most people buying know the score in Brownstone Brooklyn.

Posted by: guest at July 1, 2008 12:51 PM

10:38 AM,

Uh...

"No one would have called yesterday's HOTD a historical brownstone 10 years ago."

Sorry to break to the news, but many would probably not call yesterday's HOTD an historical brownstone today.

Prime is prime. Most people buying know the score in Brownstone Brooklyn.

Posted by: guest at July 1, 2008 1:16 PM