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March 20, 2009

Open House Picks: Six Months Later

Comment: 0-for-4 on the first batch of post-Lehman Open House Picks!
Open House Picks 9/19/08 [Brownstoner]
Previous Six Months Later Posts [Brownstoner]

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Comments

4.8% Reduction... that'll move some real estate!

Posted by: tybur6 at March 20, 2009 12:46 PM

I LOVE that Cobbile Hill place - gorgeous,but at 3 million??
I think they could move it at 2.5
I can't get the link to the ditmas house to work...
Am sorry those houses are all still on the market though!

Posted by: gemini10 at March 20, 2009 12:53 PM

The house on Albemarle Terrace was rented out.

Posted by: babs at March 20, 2009 12:55 PM

This will be interesting to follow now that we are beyond the 6 month point after the Lehman time marker.

Posted by: wasder at March 20, 2009 1:00 PM

It's always interesting to go back to the posts written on the day of these.

Posted by: the chicken at March 20, 2009 1:14 PM

gemini10 -
The ditmas house link from nyt 6 mo. ago is no good, but found it on streeteasy

http://www.streeteasy.com/nyc/sale/328769-multi-493-stratford-road-kensington-brooklyn

http://www.danshapirorealestate.net/New_York_City/New_York/Homes/Ditmas_Park/Agent/Listing_1751608.html

Posted by: Bklnite at March 20, 2009 1:20 PM

"0-for-4 on the first batch of post-Lehman Open House Picks!"

Team Bear...We Go Hard We Go Hard...

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 20, 2009 1:25 PM

Not much seems to be moving right now.
Whether we are approaching a bump or a cliff remains to be seen.

Posted by: sam at March 20, 2009 1:42 PM

sam...where were you last night??????

Posted by: daveinbedstuy at March 20, 2009 1:45 PM

My $0.02 - Sellers would be foolish to lower prices now given the massive inflation that we are facing around the corner. The news of wednesday means that the Fed will do WHATEVER it takes to make sure that nominal housing prices do not decline. Of course, real prices will likely continue to decline for a long time to come. The stalemate in the market is a reflection of seller's fear of underpricing real assets in an inflationary environment and buyer's fear of overpaying for an asset whose real value is sure to decline. Then again, I have been wrong about my real estate market predictions in each year of the past decade, but as you know, prior performance is no indication of future results.

Posted by: superlawyer at March 20, 2009 2:01 PM

As I have noted before, the story right now is volume. Transactions are down and inventory (real or shadow) is building. As prices decline, transactions will pick up. Pretty basic back-end-of-a-bubble behavior. 4 properties, no transactions. Sort of speaks for itself.

I guess I'm surprised to see this weakness with single family properties. I am increasingly of the view that condos will get crushed and single family properties will have a softer landing. But as I told Wasder last night, if you can't change your views as new information comes in, you're just a blowhard.

Posted by: lechacal at March 20, 2009 2:04 PM

I love those carriage houses on Verandah but if you look at the floor plan you see how small some the bedrooms are. The wide angle lens makes the rooms look spacious, but Verandah houses are cute and "cozy". Charm is a plus but you can get a MUCH larger house in the area for that price.

Posted by: Carol Gardens at March 20, 2009 2:04 PM

But we've had numerous "biggest sales of the week" postings for contracts entered post-Lehman that seem to counter the implications of these 4 houses not selling yet. I think it is hard to extrapolate any true tredn from a few sales here or there over a short period of time...

Posted by: 1842 at March 20, 2009 2:09 PM

Lechacal is spot on.

Posted by: Miss Muffett at March 20, 2009 2:10 PM

When did Americans start staying "spot on"? And is it especially common online? I see it all the time now.

Posted by: southbrooklyn at March 20, 2009 2:22 PM

Four houses that haven't sold and the sky is falling. We'll have last week's biggest sales and 4 more will have gotten sold. Full stop.

Posted by: daveinbedstuy at March 20, 2009 2:25 PM

"Spot on" - Good question for the Safire "on language" column in Sunday NYT magazine.

Posted by: Miss Muffett at March 20, 2009 2:25 PM

1842, you are right that it may be misleading to extrapolate too much from a report on 4 properties, but I think the trend is generally in line with what I said.

Posted by: lechacal at March 20, 2009 2:29 PM

I say spot on all the time b/c I work with sooo many brits!

Posted by: gemini10 at March 20, 2009 2:31 PM

DIBS, biggest sales are by definition actual transactions. I don't see any logic to your post (and I'm not just saying that because you called me an asshole last night, which as I said is fine - you really just aren't making sense). And no, the sky is not falling, just prices, something I believe even you agree with at this stage.

Posted by: lechacal at March 20, 2009 2:33 PM

1842 - The Sept 08 Lehman crash is not necessarily going to show things going off a cliff right away, since (as the bonus uproar shows), there was still plenty of cash sloshing about the system. It's when that cash starts to dry up that prices will really be impacted. There is so much that's changed and continuing to change in this new climate. I think of my own situation, where a year ago, I could have relied (if needed) on some family help with a downpayment (and I know many younger people in that situation). While I was working hard to find a place I could afford on my own, prices were so high that it seemed we might have to stretch and possibly ask for that family help. Now, not only is that family help out of the question due to their stock market losses, but I may have to help out my family with the proceeds from my previous RE sale. There were various articles in the past years that talked about this dynamic - the older generation helping out the younger one - but for many in the older generation, their portfolios have been obliterated.

Yes, many people are still employed but everyone I know is simply MUCH more prudent now, and prices which may have seemed palatable just a year or 6 months ago now border on the absurd. Plus, factors like public school weight a lot more prominently is people's minds. So the idea that people will just send their kids to private school when they buy a house in a crummy school zone is yet another variable that won't fly anymore, or at least much less often. We are indeed in a stalemate moment, with many sellers still in denial, but I don't see anything coming on the economic horizon that will make buyers change their minds, so eventually (as is already starting to happen), the weakest sellers will cave and the comps, and prices, will reset to much lower levels.

Posted by: Miss Muffett at March 20, 2009 2:35 PM

Dave,
I got back last night from a little vacation in Tunisia.
Tunis is really cool, the ancient sites are fascinating, the food is French/Middle Eastern. Great place. I recommend it.

Posted by: sam at March 20, 2009 2:35 PM

probably lechacal, just sayin' - I'm not sure how we determine what the "shadow inventory" is though, and any inventory build up will vary depending on the type of property etc. We'll see of course. I'm curious how the trillion dollar asset buy by the gov't to stimulating mortgage lending, and increasing news that jumbo lending by BoA and others will pick up, will affect prices, especially if inflation starts to pick up in the next year or two...

Posted by: 1842 at March 20, 2009 2:37 PM

Yes, lechacal, prices are coming down but your earlier post makes it sound like 4 houses that have not sold is an issue. I merely pointed out that we will see 4 houses that have sold.

As for calling you an asshole, you don't start something up confrontationally like that and expect to be dealt with politely..

Posted by: daveinbedstuy at March 20, 2009 2:43 PM

sam.....yes, ithought you mentioned you'd be away for awhile. Hope it was a nice trip. Sounds like it was. You were definitely missed last night.

Posted by: daveinbedstuy at March 20, 2009 2:44 PM

I don't get into the whole bear/bull team debate. I like to read the news and watch the market, but generally keep quiet on this blog about these points because everyone seems to have an agenda driven by their personal situation - which is fine and understandable. All I'm saying is it is hard to take a few anecdotes from people, or sales on this site, to establish a trend. Many people here seem smart and can provide cogent, reasoned arguments for their forecasts on the housing market - so in that sense, it is useful to see where people are psychologically (at least the handful of people who regularly post here).

Posted by: 1842 at March 20, 2009 2:45 PM

Dave,
Thank you very much.
The young attendants at the hotel would have certainly met with your approval.
1842,
I have no horse in this race. I call 'em as I see 'em.
Right now a lot of people are afraid they will be next in line to be laid off. So they are being super-cautious. Prices have not dropped enough to tempt the bottom-feeders, so things are in stasis. Sellers will need re-adjust and then re-adjust again to the market realities if they want to make a sale.

Posted by: sam at March 20, 2009 2:56 PM

1842 - I also question the value of using this site alone as a barometer of the market. But I think anyone who follows the market closely, and reads the news, can see that there is indeed ample evidence - beyond the relatively small Brownstoner universe - that the NYC RE market has already started to head down and is poised to head down substantially further.

Posted by: Miss Muffett at March 20, 2009 2:58 PM

It's pretty silly to look at 4 houses from 6 months ago *or* 4 houses sold last week, and claim it as evidence for the team bear/bull argument ... the sky is falling, or everything is fine.

Last week's biggest sales are, by definition, outliers. Open House Picks: Six Months Later are a bit more interesting in terms of seeing a trend because they're almost a random sample - not really random, but whatever it was that piqued Mr. B's interest, and there is a bit of range in asking price.

Posted by: Bklnite at March 20, 2009 3:02 PM

Dave, it is meaningful to see a sampling of houses that were on the market 6 months ago and see how many have actually sold. That is indicative (albeit with a small sampling) of transaction volume vs. supply - in particular, aged supply. Looking at actual sales in isolation is almost completely meaningless for this purpose.

Certainly no hard feelings about you calling me an asshole (and likewise no apologies about anything I said).

Posted by: lechacal at March 20, 2009 3:03 PM

"Certainly no hard feelings about you calling me an asshole (and likewise no apologies about anything I said)."

What was said? Hard to imagine feelings getting bruised at such a jovial gathering...

Posted by: wasder at March 20, 2009 3:07 PM

So, a small sample of unsold houses is meaningful but a small sample of sold houses is not?? The logic is mindboggling.

Posted by: daveinbedstuy at March 20, 2009 3:10 PM

DIBS, you are welcome to explain the entire exchange. I won't even respond if it is vaguely accurate.

Posted by: lechacal at March 20, 2009 3:10 PM

You started it lechacal so you can explain it. I think wasder may already have a good enough idea.

Posted by: daveinbedstuy at March 20, 2009 3:12 PM

Re: DIBS-lechacal exchange last night - Exhibit A re: why I like my anonymity!

Posted by: Miss Muffett at March 20, 2009 3:16 PM

Miss Muffett....as much as we all like to argue, I don't think you would have started an obnoxious confrontational exchange. I applaud your patience.

Posted by: daveinbedstuy at March 20, 2009 3:18 PM

Dave,
I made the basically the same point as lechecal (except for the part about the fight with you).

A small sample of unsold houses is more meaningful (because it's somewhat random) but a small sample of sold houses is not? (because they're the outliers, not a psuedo-random sample)

I thought you were some kinda hedge fund rocket scientist. Why is the logic mindboggling?

Posted by: Bklnite at March 20, 2009 3:24 PM

Sorry to put you guys on the spot. Its none of my business anyway. You're both cool guys and that's about that.

Posted by: wasder at March 20, 2009 3:27 PM

Muffie;

You just can't resist Brownstoner, can you!?!?!! C'mon: admit it!

;-)

You should have come last night. We all identify ourselves by our handle (unless someone chooses otherwise).

I agree with you that the economy is in flux, and it's hard to say where we are going. I think that one factor the Bears should consider is that mentioned by superlawyer: the Fed's decision to basically start printing money. History is replete with examples of governments infalting their way out a hole.

I have nowhere near the expertise to say whether or not we are headed for deflation or inflation. I think your point is well-taken,however: don;t rest easily on your assumptions. Keep an eye out - this is new territory we're in now.

Posted by: benson at March 20, 2009 3:31 PM

DIBS - thanks for the compliment but we're all human, and as we've seen, real estate touches lots of raw nerves. And why not? For most people, it's their single biggest financial decision, the locus of their home (and thus, for some, their identity)/community/family, a huge marker of class in many cases, etc. etc. I like to think I'm a level-headed person, but I could see how discussions in person could get heated. Lord knows they already are in this virtual space.

Posted by: Miss Muffett at March 20, 2009 3:33 PM

Did I miss a Stoner event last night?

Posted by: FatLenny at March 20, 2009 3:34 PM

benson...I don't know how the whole deflation/inflation scenario is going to play out. For now, rates are headed lower and affordability is certainly rising. I think both Adam and my lawyer will attest to being swamped with refi business. The way this has worked in past interest rate cycles is that the buyers hold off as rates fall and don't really rush in until rates actually start rising again fearful that they are now going to rise too much. I'm not sure in this cycle that housing prices will follow inflation back up. we have to see first when the inflationary cycle starts and what are its characteristics. It certainly won't be wage driven, which is amongst the worse kind.

Bklnite, we don't run out money based on statistical black boxes here. The faults in a statistical model are certainly well known now, sadly for many investors.

Posted by: daveinbedstuy at March 20, 2009 3:38 PM

Yes, Miss Muffett, witness the neighborhood battles and vitriol we've seen. Absolutely ridiculous.

Posted by: daveinbedstuy at March 20, 2009 3:40 PM

Yes, Benson, I'm back (though with somewhat less frequency as I do have a busy job!). Interestingly, folks have been a lot nicer to me since my hiatus. As far as my assumptions, my daily actions are to continue to follow the market closely and look for a property we love that we can afford. If we find the right thing, we'll buy but we're in no rush. The major difference between now and 6 months ago is that we've lowered our budget - our cash has grown modestly (in savings) but our allocation has changed dramatically since this money now has to go in part towards college & retirement (since our non-cash investments for those items have been decimated). We have nothing to lose by waiting, and much to gain. And even though handles are used at these get-togethers, I already find Bklyn (and NYC for that matter) a small world - I do relish my privacy here, and would be cautious about "blowing my cover".

Posted by: Miss Muffett at March 20, 2009 3:41 PM

Miss Muffett...you're right on that last point...one of the other posters who showed up works right here on the same floor as my office...different firm!!!! What a surprise that was.

Posted by: daveinbedstuy at March 20, 2009 3:43 PM

prices are going down - just a matter of how far and how fast / slow. this coming from a home owner.

Most people no longer view real estate as a sure-win INVESTMENT anymore. Investment - yes. Guaranteed juicy returns on investments - no; that bus left in 07. It's a place to live. Owning / renting - depends on each person's needs and financial war chest. Not to represent all but I'll throw myself out as a sample in the data set. I did the cashflow calc's of renting vs buying, etc before locking on budget and buying a place back in '02. as I saw prices keep going up and seeing others making big profits buying & selling, I nearly got tempted into buying something super expensive on a gimmick option mortgage and premise was real estate was a can't miss profitable investment. have to believe a lot fewer people think like that anymore. The fact that "entry" or "starter" homes are laughable terms cause prices are too high for many to afford to enter the mkt.

Personally, I look at rents (for NYC mkt) - ie if it start to go up then yeah, purchase prices will stabilize or go up. right now landlords have little leverage to jack up rents despite rising costs and this situation is very compelling for people to rent vs. buying.

Posted by: more4less at March 20, 2009 3:45 PM

Miss Muffett:

"Welcome back, where dreams were your ticket out. Welcome back to that same old blog that we laughed about...."

Posted by: wasder at March 20, 2009 3:45 PM

"As for calling you an asshole, you don't start something up confrontationally like that and expect to be dealt with politely.."

Wow! DIBS called the jackal an asshole? Team Bullshit getting testy? I gotta go find THAT dialogue.

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 20, 2009 3:47 PM

BHO...you should have come last night.

Posted by: daveinbedstuy at March 20, 2009 3:50 PM

BigHeadedOgre: It was party dialogue and not something you can read here...

Posted by: wasder at March 20, 2009 3:50 PM

wasder, that was cruel, funny, but cruel. :)

Posted by: daveinbedstuy at March 20, 2009 3:54 PM

OK, Wasder, here it is, from my perspective, although this all feels a bit like tempest-in-a-teacup hysteria. I tried to strike up some small talk with DIBS and suggested that perhaps the What was there incognito. DIBS got really, suddenly quite pissed off. He kind of flew off the handle a bit, and I couldn't really tell why. I wasn't even arguing with him when he snapped at me. It struck me that his ability to judge appropriate reactions in social situations might be very miscalibrated (thus so much socializing in cyberspace?). So I told DIBS quite flatly that he has poor social skills. And then he called me an asshole. I think I got a bit condescending with him after that (like, pat on the shoulder it's going to be OK condescending), which made him call me an asshole again. I have to admit that at that point I was just enjoying getting a rise out of him because he had such thin skin about the whole thing.

Posted by: lechacal at March 20, 2009 3:54 PM

Edited version. Detect the condescending tone throughout?? Forget it.

Posted by: daveinbedstuy at March 20, 2009 3:58 PM

DIBS--cruel is hoping that parks don't get built so you can buy a house cheaper. Making a joke about somebody's self-inflated handle is just ribbing a pompous asshat.

lechacal--It is funny because I talked to both of you last night and found both of you to have great social skills. Having hung out with DIBS before I can testify that generally speaking he is a good socializer. Anyway, I am sorry I put you both on the spot...

Posted by: wasder at March 20, 2009 3:58 PM

Hey, that's fine wasder. Sometimes people are just gunpowder and a spark.

Posted by: lechacal at March 20, 2009 4:01 PM

Yes, that park thing would be cruel; along with a lot of other scenarios people would like to see to get a cheaper house.

Posted by: daveinbedstuy at March 20, 2009 4:01 PM

DIBS--go back to the Brooklyn Bridge Park thread from a few days ago to see what I am talking about. Lord knows we wouldn't want our children (or ourselves for that matter) enjoying a new park until the egotistical one got the price he wanted on a house.

Posted by: wasder at March 20, 2009 4:16 PM

Yes,wasder, the BBP thread did come to mind. I just didn't remember the specifics.

Posted by: daveinbedstuy at March 20, 2009 4:18 PM

"So, a small sample of unsold houses is meaningful but a small sample of sold houses is not?? The logic is mindboggling."

You do realize that there is a big difference between these two small samples. One can go either way and one can, by defintiion, only give you one result. Probably too much energy expended either of these, but one clearly has a better chance of accurately measuring the market than the other.

Posted by: Ledbury at March 20, 2009 4:38 PM

Wow, I was there the entire time last night and didn't notice any of this going on. It must have been during the 3 hours spent talking to Alex and Simon (ok, maybe not quite that much).

Like wasder, I had very enjoyable conversations with both DIBS and lechecal (whom I regretted not seeing at the last bash) and didn't realize any of that was going on.

Posted by: Biff Champion at March 20, 2009 5:01 PM

We probably ought to bury the hatchet on this one lechacal. Its not like it was something really important like the price of real estate or wether there are too many strollers in PS. Apologies for the profanity.

Posted by: daveinbedstuy at March 20, 2009 5:46 PM

>> "So, a small sample of unsold houses is meaningful but a small sample of sold houses is not?? The logic is mindboggling."

Good grief. Here, try this on:

"Out of a random sample of four people looking for work six months ago, none of them have found a job yet. I think that might be an indicator."

"Nonsense! Out of a sample of four people who found work this week, all four people now have a job!"

Posted by: Smudge at March 20, 2009 5:48 PM

hey, as long as you aren't trying to bury the hatchet in my body anywhere, I'm game. Peace. And apologies for the slight. Have a great weekend.

Posted by: lechacal at March 20, 2009 5:50 PM

Smudge, you made the point very well.

Posted by: lechacal at March 20, 2009 5:53 PM

On Amtrak and the Verizon air card network was down for awhile.

We can all resume this conversation next week on "Last Week's Biggest Sales" I think there will be 4 of them!!!! Team Bear will, as usual, be flabbergasted. :)

Posted by: daveinbedstuy at March 20, 2009 6:04 PM

"Math is hard."

Posted by: Smudge at March 20, 2009 6:23 PM

dibs, the "money manager who lives in the ghetto" is at it again. LOL, I guess the denial of what will be a 70% haircut for him leads to tense situations even at friendly blog get togethers!

Posted by: cornerbodega at March 20, 2009 9:40 PM

Jesus, I read this entire thread just to see how it turned out. DIBS, lechacal, wasder, I'm just so thrilled that you gave us a happy ending. ;)

Posted by: JKB at March 20, 2009 11:08 PM

dmn - Lechacal, you were there? I wanted to meet you!
Happy that you and DIBS buried the hatchet - life's too short.

Miss Muffett, I'm sure you would have enjoyed yourself had you come. Remember that I am in Team Bear as well and I had cordial conversations with everyone.

Posted by: the chicken at March 21, 2009 8:25 AM

"Last Week's Biggest Sales" = cherry-picked data that proves nothing.

Posted by: SnarkSlope at March 21, 2009 12:47 PM

"I'm sure you would have enjoyed yourself had you come. Remember that I am in Team Bear as well and I had cordial conversations with everyone."

The point is that no matter your outlook on the state of the market or the future of the market, we are all here living in Brooklyn and participating in this board because we love it here. Not too many folks here would allow their positions on real estate to get in the way of some good old fashioned socializing.

Posted by: wasder at March 21, 2009 2:44 PM

Good grief. The DIBS-Lechacal dialogue is final proof -- should anyone need it -- that brownstoner has devolved into the private chat/frat room of 20 +or- rather dull chums with too much spare time on their hands.

Posted by: 1929 at March 21, 2009 7:17 PM

Way to add to the conversation 1929! Really amazing and thoughtful contribution.

Posted by: wasder at March 21, 2009 10:22 PM

A gentle reminder to all users: you are no longer required to use your birth year as your username. Thank you.

Posted by: lechacal at March 22, 2009 9:11 AM

Birth year or net worth?

Posted by: SnarkSlope at March 22, 2009 1:01 PM