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March 6, 2009

Open House Picks: Six Months Later

Comment: It took 15-20% mark-downs to get these deals done, and they were pre-Lehman.
Open House Picks 9/5/08 [Brownstoner]
Previous Six Months Later Posts [Brownstoner]

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OK..here goes...from Gartman today...

Home sales increased 100.8% in January in
California compared with the same period a
year ago, while the median price of an
existing home fell 40.5%, the CALIFORNIA
ASSOCIATION OF REALTORS (CAR)
reported today.

“Statewide sales in January edged past the
600,000 threshold for the first time since
October 2005,” said CAR President James
Liptak. “The strength in California home sales
in recent months signifies that the market is
gradually working its way through the large
numbers of distressed sales that have followed
in the wake of the troubled mortgage problem.
With favorable home prices and historically
low mortgage rates, affordability in the
California housing market is now at its
highest since the start of the decade.”
Closed escrow sales of existing, single-family
detached homes in California totaled 624,940
in January at a seasonally adjusted
annualized rate, an increase of 100.8% from
the revised 311,160 sales pace recorded in
January 2008. Sales in January 2009
increased 14% compared with the previous
month.
The Unsold Inventory Index was 6.7 months in
January, compared with16.6 months in
January 2008 (a reductionof almost 10
months), and the median number of days it took to
sell a single-family home was 49.9 days in
January 2009, compared with 70.8 days in
January 2008 (almost a 21 day reduction).

Bottom Line: The way the media reports it,
you would think we were years away from a
solid recovery in the real estate market,
especially in states like California, when some
of the housing data suggest otherwise. The
40.5% fall in California home prices is helping
to stimulate home sales there, as the Law of
Demand would predict. Overall sales volume
has increased in California by 20.5%, from
$1.32 billion a year ago to $1.58 billion in
January this year, the Inventory Index has
decreased by almost 10 months, and the
median number of day to sell a home
decreased by almost 21 days. In other words,
market forces are working in the California real
estate market.

Posted by: daveinbedstuy at March 6, 2009 12:42 PM

that poem doesn't rhyme very well dave

Posted by: dittoburg at March 6, 2009 12:54 PM

http://www.nytimes.com/2009/03/08/
realestate/08condo.html?hp

Posted by: 11217 at March 6, 2009 12:56 PM

It's haiku, ditto. Broaden your horizons. Everything isn't just England and the USA.

Posted by: daveinbedstuy at March 6, 2009 12:58 PM

Market forces are working because prices have dropped dramatically. Even places like SF are now "cheap" compared to Brooklyn. You have to have big price cuts before you get the situation described above: "With favorable home prices and historically low mortgage rates, affordability in the California housing market is now at its
highest since the start of the decade.” After those cuts occur here, our market will eventally work its way back to health.

Posted by: shillstoner at March 6, 2009 1:00 PM

You mean England and its colonies

Posted by: dittoburg at March 6, 2009 1:00 PM

Mr. B - I don't think the Open House listing from Sept 5 is posted here - it brings you back the the Open Houses from Aug 22?????!!!!

Posted by: gemini10 at March 6, 2009 1:09 PM

Brownstoner,

Links aren't matching up.
You've got a link to
Open House Picks 8/22/08
instead of to September 5, 2008 open house picks

http://www.brownstoner.com/brownstoner/archives/2008/09/open_house_pick_201.php

Posted by: Bklnite at March 6, 2009 1:12 PM

ditto, that was hysterical. You have me belly laughing!

Posted by: TownhouseLady at March 6, 2009 1:14 PM

I thought a haiku consists of 17 morae. That was closer to 217.

Posted by: Biff Champion at March 6, 2009 1:18 PM

what % drop in comps from, say, early '08 or mid-2007 do these sales represent? anybody know? anecdotally, even? cuz those sale prices, even with the discount, seem high to me. or maybe it's just from where we are now, anything like those numbers in those neighborhoods seems high...

Posted by: i disagree at March 6, 2009 1:20 PM

I am convinced now after watching that brilliant Jon Stewart clip from 2 days ago that showed Rick Santellis rant and clips from the past year over on CNBC that no one knows anything about anything. Everyone is full of crap. And to sit here on brownstoner and try to figure out the market is a joke, especially from bloggers who sit on the bums all day and look at the internet. Sorry.

Posted by: billyboomer at March 6, 2009 1:23 PM

Biff...its real estate haiku. There are different rules.

Posted by: daveinbedstuy at March 6, 2009 1:25 PM

Just the beginning. Where are the handful of delusional cheerleaders who always go goo goo gaa ga with the old data?

Posted by: cornerbodega at March 6, 2009 1:45 PM

Thats ok, no need to apologize bloomer.

Posted by: dittoburg at March 6, 2009 1:54 PM

Just the beginning. Where are the handful of morons who have no data to support a theory that brownstones will fall 50, 60, 70%

Posted by: daveinbedstuy at March 6, 2009 2:03 PM

> "It's haiku, ditto"

No, this is haiku:

Sales are up and yet
Prices are still plummeting
Bubble go *pop* now

Posted by: SnarkSlope at March 6, 2009 2:05 PM

Snark that was good.

Or dare I say:

Haiku very much!

Posted by: Biff Champion at March 6, 2009 2:08 PM

Dave - Too bad we don't have a president that can communicate this good news that is happening in California. The best way out of this mess is for NO MORTGAGE BAILOUTS. Prices will reach their appropriate levels, new and well qualified buyers will get good deals and will never be foreclosed on, and a good real estate cycle will begin. Moving companies, painters, landscapers, real estate attorneys, appraisers, etc. will get a ton of work.

But this goes against our gloom and doomer in the White House, who will say anything to get his socialist fantasies going. I am proud to say he did not get my vote.

Posted by: Suburbandude at March 6, 2009 2:10 PM

Suburbandude...didn't you know that there is a complete blackout of anything positive by the news media!!!!

Posted by: daveinbedstuy at March 6, 2009 2:15 PM

So it's true. Now that people are no longer scared by the word "liberal," the right wing noise machine started tossing around the word "socialist."

Lame.

Posted by: SnarkSlope at March 6, 2009 2:18 PM

Mortgage haiku: http://tinyurl.com/52eaxy
Ganbatte kudasai.

Posted by: vinca at March 6, 2009 2:19 PM

ok - back to the thread at hand
am I the only one who is SHOCKED by the actual sale price of the Windsor Terrace House - I mean a 1 family(legal 2) for almost 1.4 in WINDSOR FRIGGIN TERRACE! -I can't see the interior anymore on the Corcoran site - but from the likes of the comments from Sept 5th - it didn't seem that great inside!

Posted by: gemini10 at March 6, 2009 2:19 PM

WT pics here:

- http://www.corcoran.com/property/PhotoTour.aspx?Region=NYC&ListingID=1343041

Posted by: SnarkSlope at March 6, 2009 2:29 PM

Saw the WT place when listed. Buyers must have eaten paint chips as kids.

Posted by: invisible at March 6, 2009 2:34 PM

i mean i am team bull
but I ain't team crazy
wow - am really still in shock
Snark - thanks for the pics
it must been the "Flahrodia" room that realllly got those buyers

Posted by: gemini10 at March 6, 2009 2:43 PM

Just for the record

1) It's not actually Windsor Terrace, but South Slope

2) The yard is HUGE

Agreed, the price is high in my opinion.

Posted by: MR at March 6, 2009 2:51 PM

I'm impressed with the price on the PLG house given the complete lack of effort on the part of the broker...

Posted by: geekspice at March 6, 2009 3:03 PM

"Just the beginning. Where are the handful of morons who have no data to support a theory that brownstones will fall 50, 60, 70%" ~dibs

dibs a reminder:
1. Your POS property is in the ghetto. Brownstone bk does not include your s*hithole.
2. You're at the highest risk in all of nyc mr. Ghetto speculator.
3. Have a great weekend!
4. Oh its just the beginning ;)

Posted by: cornerbodega at March 6, 2009 3:24 PM

cornerbodega...still no data to support your theory????

I'd hate to think of what kind of a studio apartment shithole you live in!!! And the rent IS going up.

Posted by: daveinbedstuy at March 6, 2009 3:38 PM

As a fellow socialist told me after the election: "If only we were getting the socialist that the right wing accuses us of voting for..."

As for data, I would check the Case-Schiller Index for NYC from 1997 to present against household incomes for the same period. I get a 35% real drop that's yet to come as the market shakes out excess inventory. Though brownstones in popular neighborhoods, I'm guessing, will probably fall less than that. 'Cause they're all pretty-like.

Posted by: tonewlots at March 6, 2009 3:46 PM

"Comment: It took 15-20% mark-downs to get these deals done, and they were pre-Lehman."

Penny-wise (deposit), pound-foolish (massive depreciation) Brooklyn buyers. Can't walk away from a contract.

"Bottom Line: The way the media reports it,
you would think we were years away from a
solid recovery in the real estate market,..."

You would think correctly. The recovery will be a very wide U-shape, not a sharp V-shape. By recovery you mean a return to peak prices, not peak volume.

"...especially in states like California, when some
of the housing data suggest otherwise."

The data suggests a temporary volume recovery, not price recovery. Temporary because we are just entering an economic depression. Sales will virtually cease when unemployment peaks.

"what % drop in comps from, say, early '08 or mid-2007 do these sales represent?"

Zero. Those buyers grossly overpaid (from where prices will crash land to). Asks were were likely set above comps. So these percentage drops make the thread look like one for Team Bear when it's really one for Team Bull.

"I am convinced now after watching that brilliant Jon Stewart clip from 2 days ago that showed Rick Santellis rant and clips from the past year over on CNBC that no one knows anything about anything. Everyone is full of crap. And to sit here on brownstoner and try to figure out the market is a joke, especially from bloggers who sit on the bums all day and look at the internet. Sorry."

This is your brain on TV.

"...there is a complete blackout of anything positive by the news media!!!!"

What positive news are they blacking out, dave? Young Asian men moving into Bed Stuy doesn't count.

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 6, 2009 3:51 PM

Half of country's foreclosures in 35 counties

Half of the foreclosures nationwide in 2008 took place in just 35 counties across a dozen states, according to data from real estate listing firm RealtyTrac. Most of the counties are in South Florida, Southern California, Las Vegas, Phoenix, and Washington, D.C. The counties make up about 1 percent of all counties in the country and are home to about 20 percent of U.S. households.

Posted by: 11217 at March 6, 2009 3:56 PM

Rents are actually going down; a good friend of mine is looking in the Heights, and it's now possible to get a 1 bedroom for under 2k. Probably not a palace, but still. Data, schmata --once it's in the data, it's history. Did no one else notice that NOP, the most gracious and statesman-like poster on Bstoner, asserted a 25% to 40% price drop from here?

Blaming the media and Obama is evidence of magical thinking. CNBC is a 24 hour Pollyanna, and what difference does CNBC make? This is reality, not American idol; this is a structural shift in the economy. The sooner you stop blaming Anderson Cooper, the sooner you may take steps to survive. Dave, maybe it's not too late to trade back for your Manhattan place...?

Posted by: Whuh at March 6, 2009 4:04 PM

Those people who are so positive that the "crash" is only in 35 counties or that cities like NYC will be different should spend a little time on RE blogs based in San Francisco or Seattle or Boston. It's eye-opening to read about what is going on out there. Not to mention the amazing apartment you can buy on Nob Hill with breathtaking views of the bay for only 700K! I want it!

Posted by: shillstoner at March 6, 2009 4:20 PM

can anyone clarify for me why the rents in in high crime hoods of north bk are more than they are in stable areas of the bk south.u can get a 2 bed. for $900 a months in CI.and dont give me proximity to manhattan either.

Posted by: buckfast at March 6, 2009 4:37 PM

http://www.trulia.com/property/
1074683741-1545-Broadway-205-San-Francisco-CA-94109

Not really seeing the excitement in what you get for 700K in Nob Hill. An ugly 800sf, 2 bedroom which looks like the NOVO inside complete with vertical blinds and aluminum siding exterior.

Posted by: 11217 at March 6, 2009 4:41 PM

Oh and BTW, California is bankrupt.

Posted by: 11217 at March 6, 2009 4:42 PM

Not really seeing what I'm getting in Boston for 700K either. Here's a ONE bedroom in Back Bay for 675K. Are these supposed to shock me with how cheap they are?

http://www.trulia.com/property/
1075556218-280-Beacon-St-5-Boston-MA-02116

Posted by: 11217 at March 6, 2009 4:52 PM

Well, considering that Nob Hill and Back Bay are the equivalent of the West Village and Carnegie Hill in Manhattan, yes, those are very shocking prices. If you want a comparison to Brooklyn, look in Brookline or Charlestown or the Western Addtion.

Posted by: shillstoner at March 6, 2009 5:09 PM

At the Windsor Terrace place, iirc, the previous owner had suddenly passed away and was a serious DIY hobbyist (maybe even ex-construction trades guy). There was a basement FULL of power tools, unbelievable woodworking, construction, and other supplies. Seriously, it was like the inventory of a small hardware store. My understanding was that all came with the place.

That sunroom also felt awesome in the fall, and it was very easy to imagine yourself growing tomatoes and flowers in the winter in that sort of greenhouse just beyond it. Also, everything about the place felt perfectly done. Just, you know, that feeling that someone had taken real time and care to make sure edges lined up and everything was done just right. And yep, the yard was large and very actively gardened; there were planted beds and lots of pretty things.

That said, the place had been renovated and decorated with a VERY specific taste, as the pictures barely begin to indicate. The floors in the entryway were all large black marble tiles, and I think some of the bathrooms were floor-to-ceiling marble.

Still, I think someone will be very happy there, and I'd be shocked if they had any kind of maintenance problem, the place felt so well-maintained. Even though IMHO, they overpaid.

Posted by: lookin fer stuff at March 6, 2009 5:09 PM

"Well, considering that Nob Hill and Back Bay are the equivalent of the West Village and Carnegie Hill in Manhattan, yes, those are very shocking prices. If you want a comparison to Brooklyn, look in Brookline or Charlestown or the Western Addtion."

*
Well considering that the entire city of San Francisco is made up of 799,000 people and Boston 608,000 people, I'm really not sure I'd compare either of them to anywhere in the 8.3 million people in the city of New York (or 1.7 million in Manhattan, if you rather).

Ever been to Nob Hill or Back Bay?? They are great, but they have a ton more in common with Park Slope than they do with the West Village.

Posted by: 11217 at March 6, 2009 5:20 PM

"Equivalent" Look it up in the dictionary. Not the same as "similar to."

Posted by: shillstoner at March 6, 2009 5:27 PM

Last I checked, Brookline was not in Boston proper. It's a suburb.

And last I checked, Brooklyn was in NYC proper.

So no, they are not equivalent.

Posted by: 11217 at March 6, 2009 5:30 PM

11217,
Prices don't drop that quickly. If these properties were bought recently at a high, owners are typically reluctant to sell at a loss, unless they must move. This is why real estate prices aren't as volatile as stocks or commodities. This is going to take years to sort out.
Vin

Posted by: vinnie_barbarino at March 6, 2009 5:33 PM

Vinnie,

I don't claim that prices drop quickly and am fully aware that we've still got a ways to go here.

But people who make it seem as though it's "cheap" to live in San Francisco or Boston simply don't know what they are talking about.

Given what a much more vibrant city NYC is compared to either of those cities (in my opinion) I think it deserves to be a bit more expensive. I've never heard Boston or San Francisco referred to as the capital of the world before.

Boston is gorgeous but it's also BORING AS HELL!

Posted by: 11217 at March 6, 2009 5:39 PM

And you can hardly get a cab in Boston. Awful. San Francisco, slightly less of a problem.

Posted by: daveinbedstuy at March 6, 2009 5:54 PM

"Last I checked, Brookline was not in Boston proper. It's a suburb.

And last I checked, Brooklyn was in NYC proper.

So no, they are not equivalent."

Brookline is next to South End and 4 blocks from Back Bay--and it has excellent public schools. So it is actually far better than Brooklyn, from a practical perspective.

"Given what a much more vibrant city NYC is compared to either of those cities (in my opinion) I think it deserves to be a bit more expensive. I've never heard Boston or San Francisco referred to as the capital of the world before. "

Well, if it worth it you...

The obvious comparison is between places where people can usually get jobs in similar fields. Many of us who work in NYC could--theoretically--get jobs in Boston or SF.

Posted by: shillstoner at March 6, 2009 5:59 PM

Sure, I've thought about moving to San Francisco as a passing thought. I've had a handful of people I know move there as well.

All have returned to NYC.

The running theme was that they missed the energy and vibrancy of NYC.

And as a gay man the thing I hear time after time about living in SF is that it's nice if you are coupled up and 50. The singles scene in SF is nearly nonexistent. What there is of it sounds like not my thing at all.

We all have different factors for living where we do.

The sheer fact that Boston has 600,00 people, SF 800,000 and NYC 8,000,000 should tell you a little something about desirability, however.

Posted by: 11217 at March 6, 2009 6:08 PM

the western addition is pretty ghetto, and tiny.

Posted by: Ahh beer at March 6, 2009 7:31 PM

Whuh: " Did no one else notice that NOP, the most gracious and statesman-like poster on Bstoner, asserted a 25% to 40% price drop from here?" Yes we did and took it seriously. Probably the only other person here besides Bob Marvin that we take very seriously:)

We've been bearish from very early on and even gave credit to the What when his predictions about the stock market and RE turned out to be true. However we've continued looking for deals and hoped for more modest declines in prices but we are now 100% convinced that the declines will be huge in the 25% to 40% range (even for brownstones DIBS) and NOP's warning was the straw that broke the camels back.
Yep NOP is on a blogg here but his contribution is one of the very very few here that seems to be without bias or personal motive...an absolute gentleman.

Mr B thanks for that most important piece of comment there:
"It took 15-20% mark-downs to get these deals done, and they were pre-Lehman".

Posted by: pierre de taille at March 6, 2009 11:31 PM

"The sheer fact that Boston has 600,00 people, SF 800,000 and NYC 8,000,000 should tell you a little something about desirability, however."

That is perhaps the dumbest comment I've ever read on this blog. An accomplishment!

Posted by: shillstoner at March 6, 2009 11:50 PM

although in different manners, dibs and 11217 seem to come up with "dumbest comment" on a regular basis. Check out Dibs' "85% of the population is employed" as a positive for the economny...

Posted by: cornerbodega at March 7, 2009 9:50 AM

"We've been bearish from very early on and even gave credit to the What when his predictions about the stock market and RE turned out to be true. "

ROTFLMMFAO Liar Liar pants on fire!!!!! It took a long time before the retards got in sync with reality!

Hi guy a little late night patrol on Brownstoner and when I'm not around the Assheads spread lies..

The What (Taste the rainbow)

Someday this war is gonna end...

Posted by: Return of The What at March 8, 2009 1:43 AM

Not to mention the latest ruling against Tishman Speyers that all their deregulated units must go back to regulated status, the rents lowered accordingly, and hundreds of millions of dollars in "overcharges" refunded to tenants. The court ruled that because Tishman was getting J-51 tax abatements, they weren't allowed to deregulate apartments.

Big landlords being put out of business by NYC's tenant centric court system does not bode well for local housing prices.

Everything seems to be getting worse and worse. It really does seem like the "perfect real estate storm" is starting.

You folks wait for a 50% off sale just may get it. My feeling is that when it happens, many of you won't feel like living in NYC anymore anyway.

Posted by: IronBalls at March 8, 2009 9:45 AM

so much about a brownstone in bedstuy

http://www.nytimes.com/2009/03/08/opinion/08kolhatkar.html

“I have to work 20 days a week to make my bills,” he says. “At the end of the week, I have $10 left.”

Posted by: MaplewoodGuy at March 8, 2009 1:18 PM

MaplewoodGuy,

Interesting article . . . thanks for posting it.

Funny that the author points out that the owner cleared debris from the back yard, painted the iron fence, and threw out the "crack-fridge" as evidence that he'd done lots of work to the place.

The run-up in local real estate prices over the last ten years is about to evaporate completely. Such high prices never made sense in the first place, but no bank anywhere is going to be making big loans in fringe neighborhoods without "golden credit" again.

What goes up is about to go back down -- gravity in action, I guess.

Posted by: IronBalls at March 8, 2009 1:59 PM

MaplewoodGuy nice story but this guy has already lost his house, he doesn't know it yet!

There are a ton of Asshead like this guy working their brains out on a losing asset!

Very soon the reality will catch up to the dumbasses who believed in the Mutant Asset Bubble ....

The What

Someday this war is gonna end..

Posted by: Return of The What at March 8, 2009 2:20 PM