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October 24, 2007
Thoughts on "Home Sales Plunge by 8 Percent"
http://biz.yahoo.com/ap/071024/economy.html
To paraphrase the article
"The slowdown in sales meant that the inventory of unsold homes rose to 4.4 million units in September. At the September sales pace, it would take 10.5 months to eliminate the overhang of unsold homes, a record length of time."
Due to the fact that "Prime Brooklyn" (you know the neighborhoods I mean) doesn’t really have "inventory problem"
Do you think this part of town will really see negative affects from this housing problem?
Comments
I've said it before and will say it again (fully anticipating an angry and defensive rebuttal by brokers and sellers) but there are MANY brownstones in Park Slope that have been on the market for months, and which would have been snapped up in two seconds about 8 months ago. [And don't ask me to do you research and point you to the examples. Everyone who has been following the PS market knows what houses I'm talking about. A cursory property search on the NY Times will list them, price reductions and all.]
Posted by: guest at October 24, 2007 12:17 PM
But there a difference between
“reasonably priced large inventory”,
and
“grossly over-priced, un-willing to reduce idealism”
Posted by: guest at October 24, 2007 12:26 PM
Prime Manhattan and prime Brooklyn will be hurt because of what 12:26 pointed out: there is no sense of proportion or reason. Sellers (typically) always feel screwed and/ or refuse to lower the price until they must. I am guilty of it. Just sold my place and instead of feeling grateful I escaped before the credit issues I still comb Streeteasy and such sites to see if someone on my block got a better deal...
Posted by: guest at October 24, 2007 12:35 PM
Prime Manhattan is safe since so many Europeans are taking advantage of the low dollar to snap up apartments despite everything else that's going on.
Prime Brooklyn will see huge price drops since the majority of Europeans shopping for peid-de-terres want condos in convenient areas of Manhattan, not maintenance intensive 100+ year old brownstones in Park Slope.
Posted by: guest at October 24, 2007 2:33 PM
Absolutely 2:33. My building in Manhattan is in the midst of a condo conversion and they are marketing the units directly to Europeans, already foreseeing the weaker purchasing power of Americans.
Posted by: guest at October 24, 2007 6:37 PM
2:33 and 6:37 - Where do you think those Manhattanites forced out of their apartments will go? As Manhattan becomes less affordable, Brooklyn is always an alternative to some. As long as there is a price differential between the boroughs, people will want to buy in Brooklyn.
Posted by: guest at October 25, 2007 11:15 AM
Real estate is driven by local trends. In the mid-west where jobs have been disappearing, housing prices are weak. In New York, where Wall Street drives the economy and hence housing prices, we have not seen much weakness. But that is going to change. Wall Street is in the middle of laying off tens of thousands of well paid people. The knock-on effect will impact laywers, accountants, decorators, restaurants, real estate brokers -- everyone down the food chain. It happened post-1987 crash. It will happen again. Foreigners can take up some slack, but not enough to buck the trend.
Posted by: guest at October 25, 2007 1:01 PM
I stand by the notion that Brooklyn brownstones are still a great long term investment. As god said himself, "I aint building any more of 'em."
Sure the dollar, rising interest rates, Atlantic Yards etc. all have a negative effect, but the fact that places are taking longer to sell, to me just means a return to saner times when an asking price was where the negotiation started and a contract below asking was the norm and not a sign of the house having recently fallen down.
Posted by: Johnny at October 25, 2007 2:37 PM
Johnny, if the IMF says housing is overpriced 40%, which it did last week, I'd say Brooklyn prices are at least 50% overpriced.
Nothing has fundamentally changed in the last five years. 150% price increase are not justified.
The day of reckoning will arrive. . . the only question I have is how soon. I'm a flipper and would like to pump out another deal or two before all the suckers are dry up.
Posted by: guest at October 26, 2007 9:10 AM
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