Red Nabes Lose: Condo Price Cuts all the Rage

Pretty is in eye of beholder. Perhaps someone looking to be 1st time homeowner this is beautiful encouraging news.

Posted by: guest at June 6, 2008 9:30 AM

I read here how big Bed Stuy is compared to other nabes all the time. Doesn't seem so big on that map.

Posted by: guest at June 6, 2008 9:34 AM

DOWN GOES BROOKLYN! DOWN GOES BROOKLYN!

Posted by: guest at June 6, 2008 9:39 AM

GLOOM AND DOOM!!!

Posted by: guest at June 6, 2008 9:48 AM

Give me a break. This "map" has no credibility. Its about sale prices not changes in prices before a sale. And prices are still going up strongly.

Posted by: guest at June 6, 2008 10:00 AM

I don't know how relevenat a focus on changes in "list" prices is for tracking real estate valuation. If someone initially lists their property at a a ridiculously high price and then sells it a a reasonable price, they sold it a cut price.

Posted by: guest at June 6, 2008 10:15 AM

this info is for new condos.

we're talking novo, etc.

not surprising...

Posted by: guest at June 6, 2008 10:31 AM

i have checked out many condos recently in williamsburg as i have 3 different friends buying right now. i bought in 2006 which was supposed to be a stronger market in theory, but from what i am seeing, the psf prices are way up across the board. there is absolutely nothing on the market in my immediate area for what we paid - everything is significantly higher. and, on the east side of the BQE, prices appear to have skyrocketed.

this is just my casual observation of the market, but the post above seems correct. also, i think that if there have been price chops off of list prices, that the list prices were probably really really high.

will say that many of the new developments i have gone to look at with my friends are extremely nice and probably have more upscale appliances and more amenities than previous developments. most of the buildings are way better than negative posts about condos on the blogs would have you believe. have friends buying at 100 N. 3rd across from the Mill, and it's really fabulous. also saw warehouse 11 and immediately went to check out their site for myself. i would love to live there! however, as i noted earlier, a 1700 sq. apt there is about $200K more than i paid for a 2000 sq ft apt.

Posted by: guest at June 6, 2008 11:14 AM

Who cares about condos. You can always build lots of new condos. Brownstones are a premium because the supply is limited.

Posted by: guest at June 6, 2008 11:43 AM

I heard that pessism and depression take years of your life. Sigh! Would be just sad for the What to expire before all the world's asshats were forelcosed on for their lack of value.

Posted by: guest at June 6, 2008 12:08 PM

"I read here how big Bed Stuy is compared to other nabes all the time. Doesn't seem so big on that map."

Take another look. It's the largest stand-alone area on the map. Larger areas are groupings of smaller sections of Brooklyn.

Bed Stuy is nosediving now but when the market bounces back (many many many years and foreclosures from now), it will be an absolute HOTBED for renewed gentrification. Brownstone stock there is relatively abundant.

Posted by: guest at June 6, 2008 12:43 PM

The What - How's our stock market doing today?

Posted by: guest at June 6, 2008 12:49 PM

hi Mr. What - I really don't mind your comments, but you seem to think that everyone's income is going to go down or disappear. I am a condo owner, and first of all, we put 30% down, not 10% - we were in no way over extending ourselves. After taxes, and including cc's - our monthly is about $3500 - sorry, but that's nothing! we have 2 incomes and my husband is an internet advertising analyst. his field is growing by leaps and bounds. i'm in a creative services industry and own my own business and although we have variations in our level of business, I continual to make a healthy salary and have for years.

not everyone works in finance and my neighbors seem to be doing really well. in fact, one neighbor is selling and upgrading condo's as we speak.

also, i think you underestimate personal family wealth of many NY'ers. there are many people with significant family money. my father could simply buy my mortgage in a heartbeat if necessary.

Posted by: guest at June 6, 2008 1:02 PM

"also, i think you underestimate personal family wealth of many NY'ers. there are many people with significant family money. my father could simply buy my mortgage in a heartbeat if necessary."

The problem with this argument is that family money is old money. This factor was present long before the recent boom took off. Why didn't the boom take off sooner, before 1997 or 2001? No matter how you slice it, it all comes back to cheap, easy credit. Family money cancels out.

Posted by: guest at June 6, 2008 1:31 PM

I still haven't realized that BKN is TW. Spell check came up blank.

Posted by: guest at June 6, 2008 1:44 PM

"my husband is an internet advertising analyst"

It is continually amazing the myriad ways people can make money. Why anyone bothers going to college escapes me.

Posted by: guest at June 6, 2008 1:56 PM

The What & Brooklynnative:

The thing YOU guys never get is the fact that many many people in certain industries here, including us, simply can't make a living outside of NYC. This is where the jobs are. Or, if we were to find jobs in our field outside of NYC, we make 1/3 the money. Living outside NYC does not make us do better financially even if our house costs a little less money to buy or rent.

As long as people HAVE to live in NYC and as long as they prefer to own and not rent, and as long as they prefer to ride the subway to work instead of drive on a congested freeway to the train station, the real estate will do just fine in Brooklyn thank you very much.

This is about a huge migration back to cities which happened all over the country over nearly two decades. Name any state and I can point out how the properties INSIDE the cities have held their values far far more than the suburbs. If you think this only happened in Brooklyn you're retarded and obviously never travel or do business anywhere else in the country. Which then makes me take you less seriously than I already do.

Posted by: guest at June 6, 2008 2:15 PM

Nice try BN. the What is the turd I just flushed.

Posted by: guest at June 6, 2008 2:17 PM

Holyfield and Ed McMahn are your examples of how "anyone" can lose their money - now I know you are officially crazy.

Posted by: guest at June 6, 2008 2:28 PM

Actually Brooklynnative at 2:35, I was thinking of places like this:

Seattle
Portland
Minneapolis
Chicago
Atlanta
Raeigh/Durham
Austin
D.C.
Los Angeles (I used to live there and all the well-located in-town houses are selling just fine; it's the suburbs they can't sell)

But good for you, you thought of a mere 3 cities that aren't doing so well in their urban areas, Brooklynnative.

But come on, AGAIN, we're not hedge fund traders! How many times do people have to point that out to you and The What????? Nearly everyone buying brownstones in Brooklyn are in media and arts and IT. Literally every single f-ing person we know on our block are in those industries. Every single one. And they AIN'T moving to goddang Greenwich Connecticut. Get a grip on reality.

Posted by: guest at June 6, 2008 3:07 PM

The fact more new parents and other people need at-home office space to perform their jobs via the internet is exactly what has fueled the interest in brownstones in Brooklyn. It's why we bought one instead of an apartment. It didn't even occur to us to leave the city just because we needed more space.

So bad argument, Brooklynnative. Just because people need a home office doesn't automatically mean it will alter their entire lifestyle choice and make them go to Greenwich CT.

Posted by: guest at June 6, 2008 3:20 PM

Just one data point:

In our condo in PS (30apts 1 and 2br) about 25% of th owners one way or another depends on Wall Street - IT at banks, quants, IB, hedge fund people. lawyer and so on. No high-level traders though except the one that is moving to CT now.

Posted by: guest at June 6, 2008 3:29 PM

Blah blah. Just admit that you WANT all this to be true, Brooklynnative, for your own personal political reasons. People should know that as they read all your little references you managed to cherry-pick and twist here and there. The mortgage crisis happens to be very convenient for you. You forget there have been chicken littles on this blog for years, well before this mortgage crisis.

You and The What are trying to force a change in a very long established trend of migration back into urban cities, by creating some kind of panic. Doesn't that sound pathetic to you? It does to us.

Especially because density is good for the environment. So you're basically anti-environment by trying to encourage suburban sprawl. Wow, you guys really are winners in every way.

Posted by: guest at June 6, 2008 3:31 PM

In Wisconsin I would instead point out Madison, WI which has made headlines as one of the college towns (it's also the capital) to have held its values during this downturn. Brooklynnative. Milwaukee hasn't done well for many years because it has lost industry. Kind of a very specific factor that has nothing to do with the mortgage crisis.

College towns and cities that are cultural centers all over the country are totally holding their values better than the suburbs.

I am SO not backing down from that statement. Deal with it.

Posted by: guest at June 6, 2008 3:34 PM

Buying in a Park Slope right now is like throwing money out the window.

Posted by: guest at June 6, 2008 3:36 PM

Buying in a Park Slope right now is like throwing money out the window.

Posted by: guest at June 6, 2008 3:36 PM

Brooklynnative, this is what you said:

"That said, I agree there is a migration to certain cities but at the same time, I think the internet will eventually reverse that trend."

You mentioned traders at hedge funds as an example but you were making a statement about telecommuting and saying you think it will reverse the trend to move into cities.

You know when I first heard that theory about telecommuting meaning people could live anywhere so they'd leave the cities? In 1995. 13 years ago. Since 1995 there has only been stronger and stronger interest in living in cities. Telecommuting never resulted in people leaving cities.

Posted by: guest at June 6, 2008 3:44 PM

You can name 1000 cities and not one would compare to New York City. aka The center of the universe!

Brooklyn native you should know this. Unless your family was forced out 400 hundred years ago and you're commenting from a Teepee in Arizona.

Posted by: guest at June 6, 2008 3:47 PM

nobody in IT is affordin' a brownstone in prime brooklyn. unless by IT, you mean senior management of software/internet companies. i work in front office at a hedge fund (for 1 year, 3 years sell-side) and i am nowhere near affordin' one. even if i was, i wouldn't in this environment. once you brokers all lose your jobs and your internet connections, the traffic on this site is going to fall off a cliff.

Posted by: guest at June 6, 2008 4:47 PM

3:03 seems not to understand the difference between a reality check and a political agenda.

NYC clearly has become more attractive to certain types of affluent people. That's why rental rates are up despite the enormous expansion of housing stock for affluent people.

But the price bubble has little to do with these long term trends. First, NYC has been been attractive (and increasingly attractive) to artistic/IT/literary types for 50 years at least; the bubble started only in the mid-1990s. Second, to the extent that NYC is really more attractive and there is a real demand for a limited housing stock, rents rise. That is a real phenomenon. The basic sign of a bubble is that prices stop tracking the underlying reality. Here, we can see a bubble because sale prices and rents are completely out of whack.

Desires to own rather than rent can explain a gap between rental and ownership prices, but not an ever increasing gap. The current gap is completely unprecedented, by a factor of close to 2. Historically in NY it has been cheaper to own than to rent, reflecting the usual reality that rich people do better, and even at the peak of the 1987 boom it was only the same cost.

Right now, in most of the brownstone neighborhoods, buying costs double renting. That's a bubble, whether or not NYC or Park Slope or Bushwick is the center of the universe. (And, incidentally, it isn't. Even in the US, there are far more nice center cities in the US with decent food and theater than there were even a decade ago. The trend is against NY's uniqueness, even ignoring that we no longer have any distinctive industry, retail, etc.)

Posted by: guest at June 6, 2008 4:55 PM

long-term migration trends won't make a bit of difference in the next 2-3 years when stuff you bought in 06-07 is off by 10-20%, so stop bringing it up on every post. you want another demographic trend? the baby boomers are hitting retirement, which means the pig in a python portion of our population is downsizing and going to fixed income and then dying. that should do wonders for demand over the next 15 years.

back to today - the downshift in wall street doesn't happen overnight and is still unfolding as we speak. bonuses are going to be way down (and mostly stock) even vs. last year and there are fewer people who actually have jobs. plus, more layoffs are coming. this does not translate into confidence for finance people or anyone else in "IT, creative" or whoever you think is buying $2mn brownstones or $1200 sq. ft. apartments. you guys are either totally clueless or totally desperate, or both.

Posted by: guest at June 6, 2008 5:05 PM

3:03?

Posted by: guest at June 6, 2008 5:08 PM

Brooklynnative - you are talking to deaf ears. I for one very much appreciate an informed analysis. It is AMAZING to me that people are in such denial on this site. Frankly the lack of intellectual curiosity is pretty sad. Shows how truly out of it people in the "arts" can be - just not a clue about what is going on in the financial markets right now and no interest in learning.

Posted by: guest at June 6, 2008 5:09 PM

3:07

Posted by: guest at June 6, 2008 5:12 PM

Most sales in the bubble have been by people who are using the equity they made because of the bubble. One Wall Streeter at the top of the chain paying too much for an old UWS apt that no one wanted when it went coop a generation ago allows a dozen other people to trade up or trade down.

But if the Wall Streeter loses his job or his confidence and decides to rent instead of paying $2500/sft, then the whole daisy chain ends. And if some boomer in Park Slope decides to retire, all the trading up or down doesn't bring the new money into the system that is needed to balance the stuff that just moved to a really cheap condo in Florida/AZ/Greenwich/Lodi/Whatever plus lots of money to travel to Paris.

For prices to keep going up, there needs to be a constant flow of new people who are willing to pay ever higher prices with real money -- not tradeup money -- in to the system. That's what allows the rest of us to trade our overpriced condos for overpriced brownstones and vice versa.

Posted by: guest at June 6, 2008 5:22 PM

Actually, not 3:03 or 3:07 but 3:31.

Posted by: guest at June 6, 2008 5:24 PM

Telecommuting made it easier for me to leave the city -- and to come back. But it doesn't explain why it is so much cheaper to rent than to buy.

Posted by: guest at June 6, 2008 5:27 PM

Ed McMahon and Evan Holyfield are not victims of a bad economy but victims of their own foolish spending habits. Their financials woes have been growing for years. They should have down sized from their ridiculously gigantic mansions into normal homes among other things years ago when they both had more options. Of course they can't find buyers for their mansions now.

I always wondered why anyone would need a house with 17 bedrooms if they are not related to Warren Jeffs.

Posted by: guest at June 6, 2008 6:27 PM

"Internet Advertising Analyst".

Jeezus.

Posted by: guest at June 6, 2008 6:43 PM

Damn, Brooklyn Native's juju is almost as good as The What's. You dudes should pair up.

Posted by: guest at June 6, 2008 7:18 PM

"Thursday's huge stock rally came on a day when oil rose 6 bucks, the Dollar fell half a buck, and home foreclosures hit a record high, as if those were good things. Think about that."

We have and have concluded it's down to the psychotic workings of the minds of Merrill Lyncher's (lynch. If only.) and their friends the hedge fund hamsters.

And you folks really beLIEve Barack Obama is going to alter this in any way? My friends, that's not change we can beLIEve in."

Posted by: guest at June 6, 2008 7:22 PM

8:40 wow... i don't think you know what you are talking about. advertising has moved HALF OF ITS BUDGETS hello! to internet advertising. and, guess what there aren't any college classes offered about how the hell to manage it. soo anyone with any experience in this is seeing a lot of money thrown at them. it's the fastest growing media right now. you are clearly not very bright.

Posted by: guest at June 6, 2008 10:56 PM

Re: June 6, 2008 2:15 PM
"Name any state and I can point out how the properties INSIDE the cities have held their values far far more than the suburbs. "

Err, I hate to break it to you, but whichever way you slice it, Brooklyn is the 'burbs.

Posted by: guest at June 6, 2008 11:34 PM

still don't see prices right now as less than a couple of years ago. they simply are higher

Posted by: guest at June 7, 2008 12:26 AM

"Err, I hate to break it to you, but whichever way you slice it, Brooklyn is the 'burbs."

No it's not.

You should try visiting NYC sometime instead of staying out in NJ all the time making cluelesssly embarrassing statements.

Posted by: guest at June 7, 2008 11:16 AM

Idiots. Brooklyn isn't even that expensive! Have you BEEN to other major cultural cities in the country? Go ahead, just try to buy a 2,700-3,000 square feet house in close-commuting time to your office for under a million in L.A. or San Francisco. Like you can still do in parts of Brooklyn. Or try buying a 1,000-1,200 apartment in those cities for less than $500K like you still can do in parts of Brooklyn.

Even in this downturn, if we took what we made selling our 3-story house in an historic up and coming Brooklyn neighborhood ($1.2 million) all we could get with our money in L.A. would be a dinky 2 BR house about 1300 square feet. If we didn't want to have to drive an hour on the freeway to work, that is. Anything in-town in those cities within 30 minutes commute like we have here in Brooklyn, is very expensive.

Get real and stop whining.

Posted by: guest at June 7, 2008 11:26 AM

Firstly, Newark and Providence are not good examples of cities on the decline. They are both attracting new residents and are vastly better than they were 10 years ago.

Milwaukee is also not a terrible place to live. I know from experience.

We just moved to Park Slope from Portland, Oregon.

The place we sold in Portland (3 bedroom in the Pearl District) was MORE than our 3 bedroom in Park Slope.

Those who say that Brooklyn is severely overpriced, clearly haven't left Brooklyn in many years. And that's a fact. Our place we sold was 1.3 million bucks. 200K more than what we bought our place here for. We found Brooklyn to be a deal compared with where we were coming from.

You all need to experience more of this country, it would seem. Especially you, Brooklynnative.

Posted by: guest at June 7, 2008 1:20 PM

I don't know Portland, but the fancy areas of Brooklyn are a good deal more expensive than parallel areas in SF, Chicago, LA and DC. Of course, if you think the parallel to Bedstuy is Beverly Hills, then Brooklyn Heights might indeed be a bargain at $1200/sq ft.

Are we getting lots of out of town bargain hunters these days?

Posted by: guest at June 7, 2008 6:30 PM

The nicer areas of Seattle, especially the luxury buildings in downtown Seattle are most certainly comparable to Ft. Greene, Park Slope prices.

I could name 10 areas of San Francisco which are 20% more expensive than parts of Brooklyn.

Chicago is a bet cheaper than Brooklyn, as are some parts of Los Angeles and DC, but two of those are sprawling areas, one in the Midwest and one in an area where it takes 3 hours to drive from one part of the city to the other, so the comparison doesn't really ring true when talking about such a densely populated area like Brooklyn.

None of the cities you mention are the capitals of fashion, the performing arts, the visual arts, advertising or finance, either.

Posted by: guest at June 7, 2008 8:08 PM

6:30pm, you're just twisting every word I said. No need to try that here, ala Karl Rove, people are too smart.

People know they can buy in decent parts of Brooklyn for less than they can buy in similarly located (per commuting time) in-town places in L.A. That statement is indisputable.

When I pointed out L.A. is $1,000 to $1,2000 per square foot that is not Bevery Hills! I WISH I could buy in Beverly Hills for that little, please. It costs that much in places like Brentwood, Culver City, Miracle Mile, West Hollywood, Hollywood, Silverlake, Los Feliz. Places where you spend over a million to buy a modest 2 BR or 3BR little house. And on top of getting less space you pay 2 or 3 times the property tax.

For a million or just over a million you can still buy a house in Windsor Terrace, Midwood, PLG, Bed Stuy and all those place are a commute to Manhattan of less than 30 minutes. Or you can buy a 2BR coop or condo in those neighborhoods for $500K or less. Looking at the fact NYC is a huge international city with the kind of job market and commerce it offers, that's a bargain.

We're not living in a tri-state market. We're in a world market. Where are comparisons are other major cities here and in Europe and Asia.

Try some traveling outside NYC to gain some perspective.

Posted by: guest at June 8, 2008 12:57 PM

My 3 family brownstone conversion to Condo's in Carrol Gardens is not doing well. I dropped the price to 699K Luxury Condo with Pvt Roof Deck, still 9 realtors and only 2 persons looked at it. So now Im going to rent both of them and wait for the market to come back, and It will Come Back, it always does.

Posted by: guest at June 9, 2008 8:51 AM