Open House Picks: Six Months Later

Cuts have barely begun...

Posted by: Miss Muffett at December 5, 2008 1:02 PM

Aussie - I know you don't agree, you've made that clear. But I wonder if it's just a matter of perspective. That is, yes, there are some big cuts now, but there are many sellers clinging to old prices/minor cuts and thus having their places linger (which is confirmed by this feature, or any perusal of current listings). That's what I mean when I say cuts have barely begun. And some of the cuts ARE starting in the prime areas, even substantial ones. All indicators point to these cuts increasing. All I want is a nice place I can afford - I'm not wed to a magic percent decline since there is so much variation property by property, block by block, and I am confident that we will find what we want and will get a better deal when we finally do buy than if we had bought this past year.

Posted by: Miss Muffett at December 5, 2008 1:55 PM

Well, Aussie, you can stay in denial, but even you are conceding price declines all around - it's just a question of how much, how long.

Posted by: Miss Muffett at December 5, 2008 3:08 PM

Ringo, I have every intention of buying, and I actually don't go see everything - only places that actually seem like they have some promise. And Architerrorist, why is it entitled to want a place I like at a price I can afford? Isn't that the responsible approach to buying a home? It's not like I'm expecting to buy a grand mansion on the park for a few bucks! I'm prepared to pay a still-hefty price for a relatively modest place, just not an astronomical, comical price (which is still what some sellers are asking). Your assumptions are baffling. Much as we like Ft. Greene, it's off our list for now since we need to stay in District 15 for school reasons (have one kid enrolled already).

Posted by: Miss Muffett at December 5, 2008 5:41 PM

Sorry, but how does a "nice place I can afford" = perfect 3rd Street brownstone for under 1 million? People need to chill. Sam, I guess you're right - maybe there are a lot of frustrated realtors/owners on here today.

Posted by: Miss Muffett at December 5, 2008 5:46 PM

Give me a break, Aussie. The stock market has fallen nearly 50% from its highs and it is NOT "T H E E N D" as you so melodramatically put it. Yes, major declines in the value of assets cause real pain, but there is no getting around the fact that we have lived through a huge bubble that created a LOT of wealth for a lot of people and now some of those people are at risk of losing a lot of it and, more tragically, many innocent bystanders who never benefited in the first place will suffer. I don't take that lightly. But your pronouncements border on the absurd. Also, I'm not dead set on any specific % number for what the decline will be, so maybe it will be only 20-30% and not 50% - no one knows for sure. Surely some properties will go down more than others, for various complex reasons (condition of property, exact location, etc.). But truly, everyone agrees that prices are only headed down, not up, for the foreseeable future. Given the unprecedented run-ups of the last few years, I really think your fear-mongering is over the top.

Posted by: Miss Muffett at December 5, 2008 7:50 PM

And by the way, Aussie, relatives and close friends of mine have seen their investment portfolios shrink by nearly half and it is most certainly NOT "the end" for them. Painful? Yes. They certainly need to revise budgets accordingly, in some cases dramatically. But there is more to life than the value of one's assets. Shockingly, life can go on even if your net worth is down. And there can still be much in life that IS lovely - friends, family, things that *really* matter.

Posted by: Miss Muffett at December 5, 2008 9:34 PM

Thanks PDT. By the way, another interesting factoid pointing to the inevitable price declines: the 3rd St condos featured *yesterday* already had a $50K price cut as of today.

Posted by: Miss Muffett at December 5, 2008 10:57 PM

We're serious buyers, so no, not window shopping. Really, we only started lowballing in the last few months (didn't seem an option before that), and in that time we've only seen a couple of places we were interested in bidding on. But we're hopeful that more will come on the market. Old-timers can still make lots of money, even at significant reductions.

Posted by: Miss Muffett at December 5, 2008 11:57 PM

Aussie, you've accused me of peddling fear, but really, you are the one doing so. For much of the country, values have *already* fallen greatly, so the relate-estate-related damage to many businesses has already been done - hence this huge crisis we're in. For complex reasons, NYC has been little touched thus far, but if NYC *does* fall as hard as the rest of the country, surely this will be just a relatively small addition to the overall problem, not suddenly the end of everything as you say. Don't forget that RE values have more than doubled, indeed tripled in some cases, since 2000, so if they have risen 200-300% in that short time, a 50% fall does not seem that far-fetched, and would probably bring us to levels last seen around 2003. I'm not saying that will definitely happen, but I also don't see why it would be so catastrophic since many people who bought in the last 5 years would try not to sell (unless they were trading up to a similarly discounted property), and I would venture that there are many, many people who own real estate in this city who have owned their property for more than 5 years. I'm not denying or downplaying that the city could suffer in some ways from that kind of drop but we have by now seen a huge willingness on the part of government to intervene to stave off the worst, and I truly do not think Bloomberg (who will likely remain mayor during the continuing unfolding of the crisis) will allow this city to sink no matter what happens to its real estate values - look at how well he handled the crisis of the scary post 9/11 period.

There are so many truly terrible things that can happen - history and the world are full of examples - but a real estate correction is nowhere in that league. You are really fear-mongering, and I wonder if it's because you somehow want to scare prospective buyers away from low-balling by convincing them that it is somehow their patriotic duty to keep today's irrational prices artificially inflated by the kind of fear you are peddling. People - the world will not end if NYC real estate values readjust to more normal levels. Yes, some people will suffer, but many, many others will be just fine, and first-time buyers will at last be able to buy in, something that was a pipe dream for many the last few years.

Posted by: Miss Muffett at December 6, 2008 5:43 PM

Well, Wasder, when Aussie says it's T H E E N D if there's a 50% fall in NYC (which has barely seen cuts in some areas) then I'm sorry, he does seem to be stoking fears about price drops. But you're right - no one know how big the price drops will be, and really, no one knows exactly what the effects of those drops will be, because the role of gov't in this crisis is going to be huge. Honestly, I don't think there will suddenly be garbage piling up, huge cuts in the police force, etc. just because of major real estate declines. Bloomberg will NOT let that happen. So I don't see a retrenchment to price levels of merely a few short years ago to be "cripping" at all. For Pete's sake, this city, and many communities of people, have been through all kinds of horrible things (which can make a real estate correction, or even collapse, look like a walk in the park), and I'm amazed at the resilience of people to weather crises pretty damn well.

Posted by: Miss Muffett at December 6, 2008 9:28 PM

Aussie - for someone who tries to appear so well-informed, you make a lot of incorrect assumptions. How on earth can you presume that my belief will end on the purchase of my property? I've said many times that I'm not trying to time the bottom of the market, so we fully aware that we may buy something before things bottom out, if we find something we love that we can afford. And you know what? We won't agonize on a personal level that prices are going down further - that is, if we were to buy and the value of our place went down further, but we loved it, so be it. But that does not mean I won't continue to follow the market. So if things look like they are still declining after we buy, it's absurd to say that suddenly I will put blinders on and "end" the belief that they are going down some more. And what on earth do you mean that my view is "not authentic"?!?

I'm well aware of the mess we're in, and know more than your condescending posts imply you believe.

I am completely confident that RE prices will fall *in NYC* by a significant amount (which thus far, has been a major anomaly in the US market) but I'm not so presumptuous as to attach a specific number since there are too many wild cards. I am not transferring out of the US (though I too, could do so) since I am firmly loyal to Brooklyn.

Posted by: Miss Muffett at December 6, 2008 9:42 PM

"Your argument that NYC didn't go down before so will go down now without other areas has no substance to it."

Why not? It's not that the anyone is saying NYC will go down *without* other areas - rather, that the other areas have *already* fallen but NYC has remained relatively untouched. NYC has lagged before and can lag again this time. Besides, everyone is saying the national market has further to fall. But, because it has already fallen so much, it will probably not fall that much further. NYC, by contrast, has barely been hit by comparison, so it has a lot of catching up to do.

You are totally dismissive of this argument, but it is you who offer no substance to support your complete dismissal.

The damage to corporate balance sheets that you discuss has already happened, and the doom and gloom of the financial markets prices in the pessimism that the balance sheets are not going to get better anytime soon. The addition of NYC real estate declines is not, by itself, going to radically alter that reality which is already firmly established, and which is based on a *much* bigger real estate market that is not just national, but also global. NYC, comparatively, is a drop in the bucket.

And no one is saying life will be totally rosy for the next few years. Rational people realize that we must brace ourselves for some tough times. But that does not mean things have to fall apart. Don't forget that the role of government will be huge. There is broad consensus that this recession will be deep and long, but there is also unprecedented support for massive government intervention. I suspect NYC in particular will work hard to preserve the quality of life gains of the last 10-15 years. Does that mean things will rosy? Of course not. But really, Aussie, a decline in NYC real estate prices is not necessarily as catastrophic as you insist.

Posted by: Miss Muffett at December 7, 2008 9:53 AM