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April 28, 2009

Values Down, Taxes Up

The market value of all property around the city is forecast to decline between 2009 and 2010 but property taxes that the city collects will rise 10 percent, according to the Independent Budget Office. The current issue of the Gotham Gazette examines why that's the case. The main reason is that increased market values are phased in over a five-year period; each annual increase is also capped, so properties in areas that have experienced rapid run-ups this decade can take years to get caught up. The more interesting part of the article is the discussion of how the property tax system continues to favor house owners over owners of commercial buildings and co-ops and condos. The most glaring example is that one-, two- and three-family houses are assessed at 6 percent of their market value versus 45 percent of market value for the other property types. Can you imagine what would happen to the value of your typical house if its properties went up seven- or eight-fold?
Why Property Taxes Rise While Real Estate Falls [Gotham Gazette]

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Comments

As is the case everywhere in the U.S.

Be glad you're not in NJ where the level of fiscal irresponsibility has definitely effected property prices over the past 10 years.

$5,000 in RE taxes for a <800 sq. ft. condo on the UES to <$2,000 for 2,560 sq. ft. on Stuyvesant Ave. Gotta love it!!!!

Posted by: daveinbedstuy at April 28, 2009 9:07 AM

not so sure coops don't have a very favorable tax break....
As I remember they are assessed at a value as if bldg were a
rental (and probably having rent regulation)....which is much lower than market value of each apt totaled.

Posted by: Petebklyn at April 28, 2009 9:14 AM

"Be glad you're not in NJ where the level of fiscal irresponsibility has definitely effected property prices over the past 10 years."

Isn't a little early to smoke crack Dave??? Maybe the explosion of the Mutant Asset Bubble has "effected" housing prices.

The What (6 Months)

Someday this war is gonna end...

Posted by: Return of The What at April 28, 2009 9:14 AM

"Can you imagine what would happen to the value of your typical house if its properties went up seven- or eight-fold?"

Umm... yeah... it would be called EQUITY!!! And perhaps the absurd prices would come back to earth. Co-ops, condos and multi-unit rental properties wouldn't be carrying the burden of the city's coffers.

You own a 2000+ sq ft single-family home, but you pay the same or less than a 1-1/2 bedroom condo? Seems sustainable, equitable, fair, etc. Right?

Posted by: tybur6 at April 28, 2009 9:19 AM

I live in a medium-sized co-op apartment building in brooklyn heights. Real estate taxes have become our single greatest line item, surpassing super's salary and heating costs.

If you were to divide our tax bill up among the units, each unit pays more than any single-family townhouses on our block. I'm talking 2 and 3-bedroom untis paying more $5mm homes. Nuts.

Apartment buildings def no NOT have a favorable tax rate.

Posted by: Ringo at April 28, 2009 9:23 AM

The system is what it is; tybur6, learn to work it. The year a property was actually built has a lot to do with it.

Posted by: daveinbedstuy at April 28, 2009 9:26 AM

What....are you trying to say somethin?? Come on, spit it out intelligently.

Posted by: daveinbedstuy at April 28, 2009 9:27 AM

The system is unfair. I'd rather learn to fix it than to work it.

Posted by: Ringo at April 28, 2009 9:52 AM

Ringo -- Same here. And all the new condos have tax breaks so we are paying for them too. It is a very unfair system but all these brownstoners are never going to agree to pay their fair share of the tax roll.

Posted by: BH76 at April 28, 2009 9:52 AM

The new condos with tax breaks won't have them in X number of years and then they'll get whalloped.

Posted by: daveinbedstuy at April 28, 2009 9:56 AM

Our Coop real estate taxes just got re-assessed at 300% than what they were. The three bedroom apts will be on the hook for $3.2K a year. I would like to have more info as to why 1-3 family houses are only assessed at 6% of their fair market value vs other properties. What's the logic?

Posted by: DeLepp at April 28, 2009 9:59 AM

this is new york city. there's probably only one thing that everyone can agree on: it's "the other guy" who isn't paying his fair share.

Posted by: chuck at April 28, 2009 10:00 AM

DIBS = welfare queen.

Posted by: SnarkSlope at April 28, 2009 10:01 AM

instant true-up will be imppossible but can't see why a gradual true-up isn't possible. The only issue is too many owners with "regular" priced houses would get hammered too - unless the city specifically picks on the expensive trendy hoods.

Posted by: more4less at April 28, 2009 10:01 AM

The April Consumer Confidence number was expected to come in at 29.7 and came in at 39.2.

Posted by: daveinbedstuy at April 28, 2009 10:04 AM

http://www.nyc.gov/html/dof/html/property/property_val_valuation.shtml

Here is your Homework Assignment...

The What

Someday this war is gonna end...

Posted by: Return of The What at April 28, 2009 10:06 AM

Ahh, Consumer Confidence. The most meaningless of all the meaningless numbers they trot out.

Talk to real people. They ain't confident.

Posted by: SnarkSlope at April 28, 2009 10:08 AM

What, you put the "Ass" in "Assignment." :)

Posted by: daveinbedstuy at April 28, 2009 10:09 AM

DeLepp,

The logic is that, for decades, the portions of the City where small homeowners comprised the majority of the electorate controlled the City Council (think Queens, outer Brooklyn, SI). Co-ops and condos did not make up a large portion of the City electroate outside Manhattan until recently. Large building landlords don't care because they pass the taxes through as rent. Now, the system is just entrenched. Good luck getting the City to pass a massive tax increase on small homeowners in this climate and good luck getting a massive tax cut for co-opers and condomaniacs in our fiscal situation. Two minor points of consolation -- 1. any price you paid for a coop, condo or house reflected in part the tax burden; 2. Property taxes for everyone are much higher in the burbs and elsewhere because the City gets a large part of its revenues through sales and income taxes. So the overall local tax burden between house owners and co-opers is not as disparate as the proeprty tax alone makes it look.

Posted by: slopefarm at April 28, 2009 10:16 AM

Thanks for the info slopefarm, our share of property taxes isn't as bad as my parents. It's their biggest expense on their house in Jersey.

Posted by: DeLepp at April 28, 2009 10:22 AM

'morning 'stoners! It's Case-Killa Tuesday. February's out. Here's NY Metro's #'s

DATE, INDEX READING, CHANGE FROM PEAK, YOY CHANGE

Jun-06 215.83 PEAK (+200% from '91 trough)
Jul-06 215.25 -0.27% 7.70%
Aug-06 214.34 -0.69% 5.94%
Sep-06 214.08 -0.81% 4.52%
Oct-06 214.28 -0.72% 3.20%
Nov-06 214.23 -0.74% 1.87%
Dec-06 213.79 -0.95% 0.52%
Jan-07 212.78 -1.41% -0.34%
Feb-07 212.52 -1.53% -0.91%
Mar-07 212.39 -1.59% -0.91%
Apr-07 211.61 -1.96% -1.56%
May-07 210.51 -2.46% -2.35%
Jun-07 209.49 -2.94% -2.94%
Jul-07 208.36 -3.46% -3.20%
Aug-07 207.15 -4.02% -3.35%
Sep-07 206.35 -4.39% -3.61%
Oct-07 205.54 -4.77% -4.08%
Nov-07 204.58 -5.21% -4.50%
Dec-07 202.47 -6.19% -5.29%
Jan-08 200.78 -6.97% -5.64%
Feb-08 198.45 -8.05% -6.62%
Mar-08 196.53 -8.94% -7.47%
Apr-08 194.78 -9.75% -7.95%
May-08 193.88 -10.17% -7.90%
Jun-08 194.22 -10.01% -7.29%
Jul-08 193.64 -10.28% -7.06%
Aug-08 193.33 -10.42% -6.67%
Sep-08 191.32 -11.36% -7.28%
Oct-08 189.79 -12.07% -7.66%
Nov-08 186.81 -13.45% -8.69%
Dec-08 183.5 -14.98% -9.37%
Jan-09 181.00 -15.91% -9.85%
Feb-09 178.16 -16.88% -10.22% (CRASH ON FULL THROTTLE)

Taxes up? Awwww...that sucks!

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 10:28 AM

There will be no massive tax increase or tax decrease, but thankfully this latest move has outraged enough people that there is a movement to start some gradual tax increases on homeowners and small tax relief for co-op owners.

Posted by: Ringo at April 28, 2009 10:28 AM

to be fair to Jersey, they do not have the big NYC tax, no mortgage tax,... that said though Jersey ppty taxes are out of control - wouldn't be surprised if they jack that up big again soon

Posted by: more4less at April 28, 2009 10:30 AM

April 28 (Bloomberg) -- The decline in home prices in 20
major U.S. cities slowed in February for the first time since 2007, amplifying signals that the market may be stabilizing.
The S&P/Case-Shiller index’s 18.6 percent decrease compares with a record 19 percent decline the month before. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
“We’re probably getting close to an inflection point,”
said Michael Feroli, an economist at JPMorgan Chase & Co. in New York, who correctly forecast the drop in the index. Still, he said, “if we are indeed going to see a recovery in the second half,” the double-digit price drops will need to abate in the next few months.
Economists forecast the index would drop 18.7 percent from a year earlier, according to the median of 27 projections in a Bloomberg News survey. Estimates ranged from declines of 17 percent to 19.2 percent.
Compared with a month earlier, home prices fell 2.2 percent in February, after a 2.8 percent decline in January, today’s report showed.
On an annual basis, today’s figures showed the first
improvement in the rate of change since December 2005. The index started falling in January 2007.

Posted by: daveinbedstuy at April 28, 2009 10:33 AM

Oh, thank heaven the drop is only 18.6% and not 19%! I was beginning to worry.

Posted by: SnarkSlope at April 28, 2009 10:39 AM

dibs, not sure that pull quote helps you...

Posted by: Ringo at April 28, 2009 10:42 AM

The devil is in the details, Snark. The market is looking at the first derivatives for all these numbers when there's been such a long and steep decline.

Posted by: daveinbedstuy at April 28, 2009 10:42 AM

"Be glad you're not in NJ where the level of fiscal irresponsibility has definitely effected property prices over the past 10 years."

Dave, while NJ is generally known for higher property taxes I would be remiss if I didn't mention that the taxes on my NJ home did NOT increase this year, nor had they in the past 7 years prior.

Just sayin'

Posted by: TownhouseLady at April 28, 2009 10:47 AM

Perhaps an ignorant question but what do you get in return for your property taxes?

For comparison, my council tax (equivalent to property tax) in London works out at approx $1,300 per year for a three-bed house. In the UK, council tax pays for:
* schools
* refuse collection
* street maintenance
* leisure centres
* children's homes and playgrounds
* social services
* home care
* residential care for the elderly
* support for people with mental health problems
* parks maintenance

What do New Yorkers get for their money?

Posted by: the chicken at April 28, 2009 10:50 AM

DIBS -- "learn to work it" -- I don't know what to say to that...

The tax inequity is a PROBLEM, not something that needs to be "worked." We pay for schools, public welfare, roads, sidewalks, street lights, sanitation and so on with tax dollars. If someone has the cash to pay $2 million for an 'effin house, then they should pay A LOT more in tax than someone who paid $500k for their house.

But that's not the case.

If our tax code was "pay what you will," then so be it, but it's not. It's SUPPOSED to be indexed to the value of the home. If you can tell me why a single-family home LEGITIMATELY should have a *fraction* of the tax liability compared to a condo of the same value... I'm all ears.

Ringo is right. There won't be major changes in the Tax Rates... but there MUST be incremental changes.

Oh -- and from those of us who rent -- fuck you. My rental options SUCK because of the irrational tax rates on multi-unit buildings. Yeah, it's a pass-though. But it squeezes the landlords and makes living in this city harder and harder. What if the owner of a $2 million house paid his/her fair share? (i.e., not the perverse inverse of progressive)

(But it would be sad... less people would be able to buy a $2 million house and the prices might have to come down. Thus destroying your hopes and dreams for 150% annual growth on your property value.)

Posted by: tybur6 at April 28, 2009 10:52 AM

> "The devil is in the details, Snark."

I hear ya DIBS, but as good news goes, it's not enough to make me jump and clap.

Posted by: SnarkSlope at April 28, 2009 10:54 AM

Chicken... property tax pays for all that in NYC too (though probably *less*)... it's just that renters and co-op/condo owners carry an inappropriate burden.

Posted by: tybur6 at April 28, 2009 10:55 AM

tybur6...My brownstone cost only slightly more than what I sold the UES condo for. So your argument on that basis is moot. A $2MM brownstone elsewhere in Brooklyn does pay more taxes.

Posted by: daveinbedstuy at April 28, 2009 10:55 AM

Snark...it made the market today jump and clap and that's the collective wisdom of all. Whereas all of Europe was down 2-3% and the US futures were off about the same, the US market is now up slightly, due primarily to that number. The market is the leading indicator and it has been very strong lately.

Posted by: daveinbedstuy at April 28, 2009 10:57 AM

Additionally, for my lower taxes I get garbage p/u 3X a week vs. once in Manhattan and our streets get swept once a week and never did in Manhattan.

Posted by: daveinbedstuy at April 28, 2009 10:59 AM

"If someone has the cash to pay $2 million for an 'effin house, then they should pay A LOT more in tax than someone who paid $500k for their house."

You don't know whether the person buying the $2m house is wealthier than the person that paid $500k, just that they have chosen to pay more for their accomodation. You might say that you have to be wealthier to live in the more expensive house but that is a different argument. ie that property tax should be proportional to income.

Are they using up more of the city's resources by living in a bigger house? Possibly, but equally they might be a couple rattling around a 4,000 sq ft house compared to a family of 6 squashed into half the space.

Posted by: the chicken at April 28, 2009 11:00 AM

the chicken...that would be more of a "carbon footprint" tax. Let's not go there.

Posted by: daveinbedstuy at April 28, 2009 11:03 AM

tyburg6- you made my evil little renter's heart flutter! I need to remember this the next time a homeowner complains that they subsidized my rent-stabilized apartment. Based on this, it seems more like I was subsidizing them :-)

Posted by: bxgrl at April 28, 2009 11:03 AM

The DOW is up only 25 points.

That's a rather weak jump and golf applause at best.

Posted by: SnarkSlope at April 28, 2009 11:03 AM

"Chicken... property tax pays for all that in NYC too (though probably *less*)... it's just that renters and co-op/condo owners carry an inappropriate burden.

Posted by: tybur6 at April 28, 2009 10:55 AM"

Maybe so but I'm trying to reconcile why my council tax bill in London is less than half of what it would be for a comparable house in Brooklyn - even though you say the houses are getting a good deal.

Posted by: the chicken at April 28, 2009 11:04 AM

Brownstoner-
The property tax system does not favor house owners over owners of co-ops and condos, as your post says. Read the article you linked to...

"The city's statistics on coops and condos, however, highlight the bizarre nature of treating these homes for assessment purposes as if they were rental housing. According to the city's figures, coops have a very high effective tax rate -- 4.23 percent for coops and 4.02 percent for condos.

This is largely due to their artificially low market value...In Manhattan, coops have an average market value of $172,759 and 152,680 condos an average market value of $120,981."

So while I pay a low effective rate on my house, which shows a market value pretty close to reality, the fictitious coop & condo "market values" according to DOF are a tiny fraction of the actual market values

Posted by: Bklnite at April 28, 2009 11:07 AM

Snark...you need to read better. I've seen you fall off in this regard lately. :)

The market, through the moves in Europe and the pre-open futures was essentially "selling" at down around 2% or more. And now its up...that's actually quite a big move. As en example, BAC was actually trading down about 14% pre-open and is now down only 4%.

Posted by: daveinbedstuy at April 28, 2009 11:12 AM

Chicken,
UK local government receives most of its revenues via transfer payments from central government (hence why Wandsworth was able to have only nominal taxes for several years, for example).
That said, obviously NYC has income tax as well as property tax, and taken as a whole taxes here are still higher than in the UK (for now!).

Posted by: etson at April 28, 2009 11:15 AM

Poor dibs "the money manager who lives in the ghetto" referring to consumer confidence lol hahahahahahah. Hows your bed stuy ghetto investment holding up?

Posted by: cornerbodega at April 28, 2009 11:15 AM

cornerbodea...someone told me you were looking for me in a thread the other day...AT 4:00 IN THE MORNING.

You really need to get a life or at least get a blow up doll. Staying up to 4:00 AM with Rosy and you're gonna go insane, which is worse than just being plain stupid.

Posted by: daveinbedstuy at April 28, 2009 11:20 AM

hey dibs, stupid = speculating at the top in the ghetto

plain retard with no shame = you still chearleading your disaster of money loss in the ghetto when 99.9% of population knows its all over!

Posted by: cornerbodega at April 28, 2009 11:24 AM

> "And now its up...that's actually quite a big move."

Got it. We'll see where we close.

So, do you think we've hit bottom yet in the stock indices?

I think not, but what the heck do I know?

Posted by: SnarkSlope at April 28, 2009 11:26 AM

good point etson although taken in aggregate it's still costing a lot more to live in NYC.

Even London is considered rip-off compared to the rest of the UK so I don't think I'll be retiring in either city - may have to think about Thailand...

Posted by: the chicken at April 28, 2009 11:27 AM

bodega boy...you need to understand something or you'll remain bitter for life: Buying a home isn't speculation.

Your anxiety seems to be growing. Me, I'm very content and am now in the process of spending another $20k+ on my facade work. Learn something for a change.

Posted by: daveinbedstuy at April 28, 2009 11:28 AM

"I think not, but what the heck do I know?

Posted by: SnarkSlope at April 28, 2009 11:26 AM"

You know your own opinion - and that's just as valid as anyone elses until it's proven right or wrong in the future.

Posted by: the chicken at April 28, 2009 11:28 AM

DIBS, Citi down 35% in the last two weeks - how's that affecting confidence?

Posted by: the chicken at April 28, 2009 11:32 AM

chicken... since this was the April CC number, most of that fall is already discounted. C is down from its high of $4.01 on 4/14 to $2.92 currently. That's 27%.

The S&P, on the other hand hit 860 on 4/17 and is off only 1.3% from that recent high.

You should know better. Don't bait the Asshats.

Posted by: daveinbedstuy at April 28, 2009 11:42 AM

intra-day on 4/14 was $4.48 - poor sod.

Ya know I'm just playing ;)

Posted by: the chicken at April 28, 2009 11:44 AM

The ability to sell C at the top tick will be as difficult as it will be for BHO and Miss Muffett to pick the bottom of the property market. Lessons to be learned!!!!!

Posted by: daveinbedstuy at April 28, 2009 11:46 AM

OK... I just looked up the taxes for the top two properties in today's "Last Weeks Biggest Sales."

Gowanus, 330 Carroll Street -- Annual Taxes $1,821
Assessed Value $819,000, Sale Price $1.45 million

Bay Ridge, 30 88th Street -- Annual Taxes $7,262
Assessed Value $1,161,000, Sale Price $1.40 million

WHAAAAAA!!!!???

So, DIBS, you may be correct in some ways... but THIS has got to point out something effed up. The Bay Ridge property has an assessed value of 41% higher than the Gowanus property... BUT... a tax liability 299% higher!!!!

What is that!?

They're REAL value is basically the same. (By the way, both properties have the same deductions and so on) The ONLY difference is that the Gowanus property is not paying it's fair share. And, one could argue, the Bay Ridge property is paying TOOO much.

This is apples to apples -- Category 1 to Category 1.

Posted by: tybur6 at April 28, 2009 11:47 AM

time to move to Jersey City where ppty taxes are flat

Posted by: more4less at April 28, 2009 11:50 AM

"you need to understand something or you'll remain bitter for life: Buying a home isn't speculation." ~ dibs

LOL, thats all folks! Dibs proclaims there was no such thing as speculative home buying.

btw, bitter = laughing at dibs and his depreciating asset. I'm real real bitter!

Posted by: cornerbodega at April 28, 2009 11:51 AM

THL: YOUR property taxes have not gone up in YOUR town, but that is not ALL towns.
Statewide there has been a 3.7 increase with the average homeowner paying 7000. And that is considered to be the lowest increase in a decade. NJ pays the highest tax in the country. (Sats from the Asbury Park Press)
Property taxes are not reassessed every year and each township is on a different schedule.
Try talking to the folks down in Loch Harbor about their double digit increases after reassessment
It would be worth it to find out when your due for a reassessment....

Posted by: brooklynschool at April 28, 2009 11:54 AM

brooklynschool:

First, I wasn't speaking for anyone's situation other than my own.

Second, we were re-assesed this year. Got a notice in the mail, made an appointment with the tax man, they came, they inspected, they kept them flat.

Third, Why exactly would I concern myself with Loch Harbor when I'm in Hudson County?

Posted by: TownhouseLady at April 28, 2009 12:41 PM

Don't you people get it? When something is crashing, it's a panic; when something has crashed all the bad news is priced in; and when something ticks up slightly it's Happy Days. Or so says the Sage from OmigodIliveintheghetto.

Posted by: Whuh at April 28, 2009 12:41 PM

"The decline in home prices in 20 major U.S. cities slowed in February for the first time since 2007, amplifying signals that the market may be stabilizing.
The S&P/Case-Shiller index’s 18.6 percent decrease compares with a record 19 percent decline the month before."

Nice try, DIBS. Those numbers are for the US market at large (including coastal areas like NYC that have already fallen -50% or more and non-coastal cities that never went up +200% in the first place) which leads NYC, the last market to fall. Our numbers show no signs of stabilizing. New cycle record for CHANGE FROM PEAK, -16.88%. New cycle record for YOY CHANGE, -10.22%. And besides, we've had a few false glimmers of hope (dead cat bounces) before (see the numbers I posted above).

It's funny how national prices have nothing to do with Brooklyn until they "stabilize".

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 12:58 PM

"It's funny how national prices have nothing to do with Brooklyn until they "stabilize".

exactly, thats why hes the "Money manager who lives in the ghetto"

Posted by: cornerbodega at April 28, 2009 1:28 PM

BHO, we're only down 16.88 percent from the June '06 peak? That's pathetic.

Posted by: mopar at April 28, 2009 2:14 PM

wow...you three have no clue what you're arguing about. You don't even understand what I wrote. Now I know how so many really stupid people got in over their heads.

Posted by: daveinbedstuy at April 28, 2009 2:24 PM

"BHO, we're only down 16.88 percent from the June '06 peak?"

Translation: "I'm falling off a 12 story building but I'm only down to the 10th floor so I'm okay". We have to pass through -16.88% to get to -50%. Remember, these are February numbers. It's damn near May. It's gotta be worse than what the two-month lag tells us. We shall see come June.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 2:37 PM

Always the same argument, BHO. We're on our way to -50% but you can't tell us why that target will be reached. You're just certain of it. or at least you want to get your sorry ass out of Lodi, NJ and back to Brooklyn...which is certainly a commendable objective.

Posted by: daveinbedstuy at April 28, 2009 2:53 PM

fyi - Case-Shiller tracks REsales of single-family homes in a metro area. SINGLE FAMILY HOMES. This does not include new homes, coops, condos, or even 2- and 3- family brownstones people. It is heavily impacted by what happens in the suburbs as that is where the vast majority of single family homes are in the area - Manhattan for example barely has any single family homes. So in that regard, the Case-Shiller is not exactly the best barometer of prices in brownstone brooklyn. There is however, a Case-Shiller index for NYC Metro area condos, which tends to better represent what's happening in NYC as the city's share of condos in the metro area is higher than it is for single family homes.

Posted by: gomuppets at April 28, 2009 3:37 PM

Always the same argument, DIBS. We're not on our way to -50% but you can't tell us why that target will not be reached. ;-)

Posted by: SnarkSlope at April 28, 2009 4:00 PM

I think those who come up with the -50% targets need to defend their assumptions like everywhere else in the real world when they make a prognostication. These are just a bunch of armchair Asshats who base their reasoning on wherever they pull the reomote from when they're sitting on it.

Posted by: daveinbedstuy at April 28, 2009 4:12 PM

Gomuppets, if that's true, the Case-Schiller numbers should be far more extreme, since the vast majority of single family houses in New York City are in Queens, which has been severely affected by the subprime downturn.

Posted by: mopar at April 28, 2009 4:15 PM

"Always the same argument, BHO. We're on our way to -50% but you can't tell us why that target will be reached. You're just certain of it. or at least you want to get your sorry ass out of Lodi, NJ and back to Brooklyn...which is certainly a commendable objective."

Same solid argument, DIBS. Repetition is key. And you are absolutely wrong, I have already told you why: 3X income. Even 4X income. You already forgot about that calc I did on your brownstone?

Or, historic average annual inflation: 1.04(inflation)^15(years)*250K(Bottom Stuy Heights Brownstone Price) = 450K = Half Off. Or just classic fear mirroring unprecedented greed and euhporia. Or just a deleveraging of the whole Ponzi effect with overshoot (Peak Comps minus Credit Bust minus Tech Bust = 1995 Prices = Nominal Half Off = Real 100% Off).

So it's both, DIBS. I'm certain of it AND I want to get my "sorry ass out of Lodi, NJ and back to Brooklyn" which for me is analogic to owning a brownstone or two.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 4:16 PM

BHO, I don't buy the argument that New York is lagging the rest of the country. The subprime areas of New York are not lagging anything. They are already down 40 to 50 percent. How much more further the prices of prime brownstone Brooklyn decline really depends on what happens with the general economy and interest rates. I can't predict the future.

Posted by: mopar at April 28, 2009 4:29 PM

"It [NY Case-Shiller Index] is heavily impacted by what happens in the suburbs as that is where the vast majority of single family homes are in the area - Manhattan for example barely has any single family homes. So in that regard, the Case-Shiller is not exactly the best barometer of prices in brownstone brooklyn."

So, Kermit, why did the index share a +200% (a tripling for the mathematically challenged) increase with Brooklyn brownstones, trough to peak? What a coincidence! Relevant on the way up, relevant on the way down (sorry, DIBS, you people don't get it so I have to beat it into your head).

Please do post this condo index.

Interesting point, mopar, but it only holds weight if that majority number of SFH's makes up a significant percentage of all properties which I don't think it does. However, the whole Tri-State area shares the same fundamentals. Most of us commute to the city for work and decide whether to live in the city or not. Homes in the suburbs are cheaper but you pay more taxes and you need a car or two. Homes in NYC are more pricey but taxes and transportation costs are much lower. So your housing costs are about the same per income/hood no matter where you live. Everything balances out and that's why the index couldn't be more relevant.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 4:34 PM

"BHO, I don't buy the argument that New York is lagging the rest of the country."

Why not? Our prices didn't hyperinflate until after California's, Arizona's, Vegas' and Florida's did. The peddling of all these hot-potato loans to Main St lead the home price boom. The bonuses and profits that benefited NYC and its home prices lagged. First, the "experts" thought we were immune. Only recently has that been called to question and answered with a 'not anymore'. The chickens are home to roost. Without a quick Wall St resurrection, we're done.

To address your points, prime areas elsewhere are significantly down, let alone subprime areas which are down way more than -50% in places like Florida and California (fughettaboutit!). The general economy is depressing itself. Interest rates can't go much lower and if they spike, it would be an insult to injury for home prices.

It's not that you can't PREDICT the future. It's that you can't TELL the future. But good financial planning means formulating your OWN opinion (not that of Barbara Corcoran or David Lereah) and taking a position, something that most screwed buyers simply did not do.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 4:50 PM

BHO, when you first posted about the Case Schiller index, you said June 2006 was the peak for the whole country -- including California, Florida, and New York. Now you're saying New York peaked after?

Florida, California, and Nevada are down more than other parts of the country. That doesn't mean other parts of the country are "lagging" them.

Posted by: mopar at April 28, 2009 6:05 PM

Chicken, I skimmed some of this thread, but I have to mention, here in the US we don't pay a tax for HAVING A TELEVISION.

Yeah, I know, you have universal health care but here in America, tv is free. (At least in theory.)

Posted by: Heather at April 28, 2009 8:06 PM

New York City proper peaked after, mopar. I'm talking Brooklyn and Manhattan as opposed to White Plains, Paramus or Stamford, cities included in that NY Metro index. You have to agree with me there.

All I'm saying, and it's all over the NY Times RE section, is that NYC lags the national average and, as seen above, the Metro-wide average.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 28, 2009 10:40 PM

Bushwick peaked in June 2006. Bushwick is in New York City.

Posted by: mopar at April 28, 2009 11:06 PM

When we owned our previous place (condo), I always felt the taxes were actually too *low*. Not that I enjoy paying taxes, but I have school-age kids and I always felt that it would be better if everyone kicked in a bit more for public services. The tax system indeed seems very messed up....

Posted by: Miss Muffett at April 29, 2009 8:58 AM

Miss Muffett....I'll send you my tax bill and you can pay mine. Thanks.

Posted by: daveinbedstuy at April 29, 2009 9:08 AM

Ha ha DIBS. I'm no masochist. I'm just saying if *everyone* pitched in more (you sound like you make a lot more money than I do), maybe some of our public services could be improved (schools being a key one that I'm concerned with). I'm not talking huge increases, but small bits, if everyone pulls their oar, can make a real difference. NYC RE taxes are, in my opinion, quite shockingly low.

Posted by: Miss Muffett at April 29, 2009 10:10 AM

You want to own a "million" dollar home and you don't want to pay your taxes? You must belong to nobility. Pay your taxes and don't be cheap.

Posted by: hannible at April 29, 2009 4:47 PM

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April 28, 2009

Values Down, Taxes Up

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