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December 23, 2008
Home Sales in November Fell at Faster Pace Than Expected
The median price of a home plunged 13 percent from October to November, to $181,300 from $208,000 a year ago. That was the lowest price since February 2004.They’re about as god-awful as they can get,” said Robert Barbera, chief economist at ITG. “This is pretty breathtaking stuff.”
Comments
Apparently no one has told the Brooklyn home market this news.
Posted by: daveinbedstuy at December 23, 2008 11:10 AM
I agree. Even coop apts didn't budge.
Posted by: karo25 at December 23, 2008 11:17 AM
Great image!
I would think they'd plunge further in Dec and Jan, since closing prices then are more likely to reflect the horror of the second week of October.
Posted by: mopar at December 23, 2008 11:18 AM
Why is this posted? This is a Brooklyn blog, more pricisely, a brownstone brooklyn blog. These national numbers do not apply to Brownstone Brooklyn. Too much doom and gloom here (and it seems with glee). Unfortunate.
Posted by: broker at December 23, 2008 11:27 AM
Prices are dropping in every Brooklyn co-op building that I am monitoring.
Posted by: SnarkSlope at December 23, 2008 11:32 AM
SnarkSlope, I've heard of hall monitors, but never a co-op monitor. Do you scream at the shareholders to get back to their apartments after a certain time?
Posted by: Biff Champion at December 23, 2008 11:37 AM
Not if they have a hall pass, slip me a Benjamin, or are VGL and WTPO.
Posted by: SnarkSlope at December 23, 2008 11:48 AM
SnarkSlope, by how much? Are you talking about asking or closing? Miss Muffet, any details on drops on ask or closing sale prices in the townhouses you are monitoring? Anyone been looking in Bed Stuy and care to chime in? Seems like a few places have recently gone for 10 percent below last year's prices, but I'm not sure. And not to sound like a broken record, but prices on two-family houses in Bushwick have definitely fallen 40 percent since 2006. That pretty much covers the three major housing types/markets in Brooklyn, so we should be able to get a good picture.
Posted by: mopar at December 23, 2008 11:52 AM
Actually, the real staggering news is that 45 percent of the sales were "distressed." (Either short or foreclosed.) That's incredible!!!
Another amazing thing is the story says that median housing values have gone down 21 percent since the peak of the market, which was July 2006.
I'm very surprised to hear that. I was under the impression the rest of the country (outside New York) had fallen earlier and farther. When in fact, the rest of the country's fortunes have moved in lockstep with subprime New York (East Flatbush, Bushwick, Queens).
(Please note that Bed Stuy and Crown Heights seem less affected -- isn't that interesting? More long-term owners to start with...maybe fraud or inadvisable HELOCs are bigger problems there than outright subprime purchases.)
Aren't more ARMs going to reset in 2009? (The ones sold in 2006.)
A drop of 21 percent doesn't seem like all that much, even though the story is all doom and gloom. Though I guess I should keep in mind this is the median.
I bet the numbers will be far worse in December with many fewer sales. Because the credit impasse started the second week of October, right?
How much lower do you all think it could go?
Dave, what's happening with the market in Philadelphia right now?
Posted by: mopar at December 23, 2008 12:02 PM
mopar - I haven't done the percentages, but I am noticing more price chops, more units selling below ask, and selling further below ask, and and so on. Personally, I think the downturn has only just begun here. Your mileage may vary.
Posted by: SnarkSlope at December 23, 2008 12:08 PM
No doubt prices are falling in Manhattan and prime Brooklyn, but as noted many, many times before, foreclosures and distressed properties are relatively rare in these areas.
The large drop in prices in this article seems directly tied to the high number of foreclosures sold. Not saying there's any good news for sellers out there, just that the magnitude of the bad news isn't clear from these statistics.
As for what prices may drop to in prime NYC areas, it's anyone's guess. From my (admittedly low) vantage point, I can't see the bottom yet. That is painful to me as someone who sold and bought at the top of the market. My only consolation is that if we'd kept our cash in the stock market we'd have already lost 45% of our nut...basically, if we fall to 2003 prices I'll be right back where we started when we bought our previous apt. on the UWS. So be it.
Posted by: Bolder at December 23, 2008 1:29 PM
I am so glad sjtmd has brought the decline of the national housing market to the attention of the readers of this site. We had no idea. Thanks to you, we can now adjust our investments, financial planning and home shopping accordingly. Wow, and to think that, until today, we were all so blind as to what is going on out there.
Honestly, apart from the fact that this forum isn't really the place for a generalized economic discussion, if you are going to try to start a discussion, at least have something interesting to say at the outset.
Posted by: slopefarm at December 23, 2008 1:48 PM
Last time I checked, Brooklyn had not succeeded from the Union and was still counted in assessments of the national housing market.
Posted by: mopar at December 23, 2008 1:59 PM
From what I've seen, Crown Heights has fallen just slightly, maybe 5%.
Brownstone (868 Lincoln @ Nostrand). Listed at 799k, fell to 750k. Broker called to notify of price drop. Not sold. Love to buy if it fell to something reasonable.
2 Family (Union btw Rogers and Nostrand). Relisted at 700k, with a price drop from 740k or so.
Brownstone (1240 Carroll near Nostrand). Listed at 638k. Read that it was in contract, but the original listing was at 680k I think.
Condo on St. Marks near Franklin. Broker called offering price reductions up to 50k.
Condos on Washington Ave (PH/CH border) have all had significant price cuts, if not on the listings, then the seller says they are open to negotiation.
...
Outside the city, affordable suburbs I have looked at have fallen like 10-15%. E.g., Maplewood, Orange, Pleasantville.
We'll see what happens next year.
Posted by: theandrewlee at December 23, 2008 4:17 PM
I'm been "monitoring" pretty much every coop 1 BR to hit the slope/pheights market over the past 6 months and I can't tell a difference from then to now in pricing. There are also very few coops coming up. Those that are reasonable are selling, perhaps more slowly, but selling. 2009 could be different...
Posted by: squaredrive at December 23, 2008 8:44 PM
This is all good, specific information. I have found that you can't usually go by list price. Sellers expect offers 10 to 15 percent off list, and I have had at least three real estate agents run after me when we weren't interested in a property and disclose that the sellers (often the bank) are willing to take almost 20 percent off list. (For example, a house listed at $520,000 would really be $430,000.)
At least where I am, list prices online haven't budged since Nov. 2007. That's when the properties first came on the market, and amusingly (perhaps not amusing to the sellers), new properties are priced accordingly. As far as I can see the new sellers seem unaware of the price chopping situation. Possibly they are going by the listed prices they see, rather than the closing prices on file.
Posted by: mopar at December 25, 2008 11:56 AM
"Sellers expect offers 10 to 15 percent off list, and I have had at least three real estate agents run after me when we weren't interested in a property and disclose that the sellers (often the bank) are willing to take almost 20 percent off list. (For example, a house listed at $520,000 would really be $430,000.)"
I have been using free services to find comparable sold properties. And the list prices are usually in the same range (perhaps slightly higher) as some of the recent (late 2008) comparable closing prices.
Before the housing market went South, we had made an offer on one or two homes, and always lost out. We always offered slightly lower than list.
Is it true that sellers now expect 15% off list? I guess my question is how does someone approach that?
Posted by: theandrewlee at December 26, 2008 9:16 AM
theandrewlee, perhaps you're looking in an area where properties are still moving well? I am looking in Bushwick, where there are lots of short sales and foreclosures.
My recommendation: Compare closing prices in a quarter or over several quarters. See if there is a discount and how much. Offer current closing price minus whatever discount applies to the period in which you would be closing.
Also, prices will probably come down a bit more between Jan and March, then go up again in the spring.
Good luck to you.
Posted by: mopar at December 27, 2008 10:34 PM
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