No Slump in the Slope

I am impressed with the thoroughness of your research. One apartment goes into contract for ask within a few weeks. A few others have had their prices rise over the last sixteen years. Whew, that ought to cure anyone's market jitters. Take that, the What.

Posted by: slopefarm at December 19, 2007 2:09 PM

OP, you've picked a historic low and compared it to a historic high, without adjusting for inflation or carrying costs, not to mention the investment required to convert the house to coops. Everyone knows the Slope housing market has appreciated quite substantially since the '90-'91 low. You are also comparing house to coop prices. Your numbers wouldn't look quite as astonishing if you used '87 as your look back, not to mention if $300k was spent on renovation and conversion.

More importantly, as any moderately savvy investor will tell you, past performance does not predict future performance. While for some, the gains you describe are reasons for excitement, for others, it is a reason to be cautious about another dip. I am not predicting either, and, as a homeowner, I don't wish to lose value, but your highly selective sample, misleadingly presented, says nothing about the present and near future state of the market. Put another way, if you had a bunch of comps that suggested the coop could have gone for 5% more three months ago, would that suggest robust growth or the potential for a slump (or, perhaps neither, just a slight move towards sanity).

I am not sure what your motive was in posting this. Are you a giddy investor? Do you sell real estate on the side? In any event, whether it is moving up or down, the Brooklyn RE market could use less, not more, hyperbole.

Posted by: slopefarm at December 19, 2007 3:19 PM

OP,

You are right about your comment. I was responding to what I took to be the tone of the original post, which seemed hyperbolic, and to advertise a belief in "no slump." Your comment clarified your perspective and I failed to catch all of it. And I really don't mean to single you out, but a lot of numbers get tossed around here and elsewhere about the real estate market and it often seems like people are trying to pump up the market (or, conversely, trash it) based on selective and misused data.

You are also right that anyone buying in the Slope in 2002 did well for themselves (assuming they bought themselves enough house). My reaction was to the implication -- which, on further read and in light of your further comment, you may have not intended to convey -- that this sale conveys sufficient data to say anything about whether the Slope is, or is about to, slump. My observations were partly about the use and possible misuse of data, but, as a Slope oldtimer, your observations are always welcome.

PS We've clawed our way from rentals to coop to 2-fam. house in the Slope over the past 22 years. How many years do you have on us and how much longer until we get to call ourselves "oldtimers in the hood" -- if ever?

Posted by: slopefarm at December 19, 2007 3:57 PM

The "who is an old timer" argument can get silly if taken to extremes and I certainly don't take it seriously one way or another. At one end, only native americans descended from those living in the area pre-1621 need apply. More generously at the other end, perhaps anyone who had a drink at Minsky's and was living in the hood at the time should qualify. The latter gets me in by a (very red) nose.

Posted by: slopefarm at December 19, 2007 5:04 PM