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October 28, 2008

Case Shiller's Silver Lining?

Over on the Wall Street blog Clusterstock today, they've managed to find some good news within the latest batch of data from the Case Shiller Index. Although the index year-over-year decline in August rose to 17.7% (versus 17.4%), the rate of acceleration has been slowing, prompting the finance blog to muse that "It seems reasonable to think that August or September might mark the peak in the rate of year-over-year price decline."

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I don't like the window treatments in that house pictured.

Posted by: dittoburg at October 28, 2008 1:37 PM

Is Clusterstock unaware of October 2008?

Posted by: dittoburg at October 28, 2008 1:38 PM

The price declines have barely begun in NYC - as NYC has been on its own track thus far, it may continue to be. That is, since it took longer for housing bear market to come here, it may also take longer for the market to bottom out before recovering.

Posted by: Miss Muffett at October 28, 2008 1:42 PM

"...August or September might mark the peak in the rate of year-over-year price decline."

Not even close. dittoburg says it all at 1:38. That long ass two month lag knows absolutely nothing about my handle.

Posted by: DOW8000SP800 at October 28, 2008 1:55 PM

We're so far from mortgage payments even approximating market rents it's not even funny.

Prices on the entire East Coast (NYC Particularly) have a long long way still to fall.

Nice try spinning "rate of acceleration has been slowing" to actually mean anything!

About as significant as reading tea leafs. . .

Posted by: IronBalls at October 28, 2008 2:05 PM

If you go back to Blogdett's post, you'll see that the first commenter raised the point that the data reflect closings in August, before the worst of the credit crunch arrives, and that the decline will continue. Henry then comments that he agrees, pretty much negating the point of his original post.

Posted by: citykitty at October 28, 2008 2:49 PM

agree with all above. prices are going to come down hard. especially when crime goes up in the city, and people are ready to get out of brooklyn, even if it means losing some money.

anecdotal, yet I think on point: I was feverishly in the market for SEVEN years...always bidding & never coming out on top. since the financial crisis hit, however, I have NO interest in buying anything. I have even stopped going to the ny times real estate page, which was my obsession for so long. I have embraced my rental apartment, which now I see for all the glory of flexibity that it is. If the city gets too bad, or if I lost my job, I could just cut out of here with no strings attached. and that feels pretty sweet right now.

so I'm not sure who the new buyers are.

and let's not forget the estimated 200,000 jobs that are being eliminated in this city.

Posted by: xanadu at October 28, 2008 3:07 PM

Those jobs were just realtor jobs.

Posted by: dittoburg at October 28, 2008 3:27 PM

Xanadu,

You looked feverishly for 7 years of a seller's market and drop out when it's shifted to a buyer's market?

Posted by: Boerum Hill at October 28, 2008 3:49 PM

it's pretty weak sauce if the best you can say about the data is that the delta on the decline 'might' be going down.

That's like saying you got mugged yesterday and are going to get mugged again tomorrow but, on the bright side, they're going to take less from you tomorrow!

Posted by: the chicken at October 28, 2008 4:01 PM

sorry - just re-read. It's not even the delta that's going down but the theta!

So to continue my analogy, the mugger tomorrow is going to take more than he did yesterday but at least the extra that he's going to take is less than the extra he took from you yesterday over the day before!

Posted by: the chicken at October 28, 2008 4:04 PM

sorry again - not theta, I meant gamma. I'm always forgetting my greeks.

Posted by: the chicken at October 28, 2008 4:05 PM

crime is going to go up because cost of housing is getting cheaper and bonuses on Wall st are down to nothing and hedge fund guys will be unemployed?
I think crime will be down because the wallst/hedge fund guys won't be able to stealing our money any longer because they will be out of work.

Posted by: Petebklyn at October 28, 2008 4:17 PM

That is my point, Boerum Hill. I was very actively & obsessively looking to buy. But the mentality has changed. I don't know what is going to happen to this city in the new world order. My defection is part of the reason that prices are going down (only a part). I don't even want to buy because that whole panic mentality is over...the idea that you have to get into this market before it leaves you behind. Over. Done. A brownstone in Brooklyn is just not what I want right now. I want flexibility. And gold coins.

Posted by: xanadu at October 28, 2008 5:49 PM

"You looked feverishly for 7 years of a seller's market and drop out when it's shifted to a buyer's market?"

Great point.

Now is the time to look and gather the right information on buying a home. Not some investment in some "hot" area that you hope to flip, but a home. A place to live. At a price that middle class people can afford.

The bottom is still far off and far way down, but you have to plan for the future. Right now, I'm getting the right information and a good financial basis so that when homes are affordable and prices are realistic, my family and I will be ready.

Posted by: theandrewlee at October 28, 2008 7:13 PM

"You looked feverishly for 7 years of a seller's market and drop out when it's shifted to a buyer's market?"

Great point.

I think the bottom is still far off and far way down, but you have to plan for the future. Right now, I'm getting the right information and a good financial basis so that when homes are affordable and prices are realistic, my family and I will be ready.

Posted by: theandrewlee at October 28, 2008 7:14 PM

To be quite honest, I can't wait until prices fall back to normal again and my house is worth a pittance of what its worth now. Why? Because I have no plans on ever leaving the city until I'm carried out in a box, I could care less if I leave my kids a legacy in an old overpriced Williamsburg house - and they do not want to live here anyway, and primarily because my freaking insurance and property taxes will quit going up every year. I am not an investor looking to flip my home, so who really cares if it increases on paper. Bring on 2001 prices!

Posted by: williamsburgguy at October 28, 2008 9:33 PM

the biggest risk to nyc real estate prices is obama as president. yeah i said it. if you don't like it, refute that statement logically instead of moaning.

Posted by: BrooklynLove at October 28, 2008 9:46 PM

BrooklynLOve - can you please explain, in concrete terms, why Obama would hurt NYC real estate prices more than McCain would?

Posted by: Miss Muffett at October 28, 2008 10:40 PM

by taking money from the people who would support higher price levels and giving it to those who cannot.

Posted by: BrooklynLove at October 29, 2008 7:25 AM

Yes, its always clear cut, black & white like that BrooklynLove. The amount of money that people making $500,000 plus will give up in higher taxes will be largely immaterial. Certainly not enough to effect real estate purchase decisions. Life will still be good!!!

And, Obama should be able to placate those committing the street crime with lower taxes. Its a win-win!!!

Posted by: daveinbedstuy at October 29, 2008 8:20 AM

BrooklynLove - Under Obama's tax plan, families earning over $250K would not pay more than they did in the 90s (in fact, they could pay less), a period when real estate values were steadily rising. So your argument does not really make sense - just another over-simplification which sadly shows that McCain's distortions are working on some people.

Posted by: Miss Muffett at October 29, 2008 9:18 AM

The Obama plan will raise marginal rates on incomes over $250 by about 4 percentage points to Clitnton year levels. The Obama plan also calls for a surplus social security tax (at an unspecified rate but rumored to be 4%) on incomes over $250K. So, $25OK earners will pay more tax than they did in the 1990s. This will result in a net increase in taxes paid by New York City residents. There are a lot of good reasons to vote for Obama, but it's not a "distortion" to say that tax bills for those who actually pay taxes will go up.

Posted by: Boerum Hill at October 29, 2008 10:03 AM

"by taking money from the people who would support higher price levels and giving it to those who cannot."

Hey! Everybody that is rich - go out and buy a house whether you need it or not! I don't think I'm going out on a limb to guess that most of the people that might be financially capable of supporting higher price levels already own a home.

Beyond that, why is supporting prices a good thing? If the property is your home then you should care not one jot about whether the value has gone up or down in value.

Your comment is financial snobbery at its very worst. New York and Brooklyn are the places they are precisely because of the diversity (financially, socially, ethnically) of its inhabitants. Do you want NY to become one giant Battery Park City?

Posted by: the chicken at October 29, 2008 10:17 AM

Boreum H - if you're self employed, you can double your 4% social security figure.

Miss Muffett, just because one see's issues with Obama's tax policy doesn't mean that one is pro-McCain. That sounds like Bush's "if your'e not with us your un-American" type logic.

Its always wise to look at the actual details of a candidates' promises over the media-friendly summarizing soundbites. Its clear that those over $250K (salaried) will take a hit, and if NYC raises income taxes too, it will be a significant hit.

Posted by: dittoburg at October 29, 2008 10:19 AM

first of all i think both candidates are horrid. i wish that i could vote for richard pryor.

still waiting for an informed and educated rebuttal.

Posted by: BrooklynLove at October 29, 2008 1:22 PM

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October 28, 2008

Case Shiller's Silver Lining?

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