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November 5, 2009
Park Slope price per square foot
I've recently started thinking about whether it is time to buy and I would like to ask for your opinions.
I am interested in the Park Slope area but even though prices appear to have dropped I do not know if they are at reasonable levels considering how much they've went up.
Trulia has a chart for average price per square foot in the Park Slope area,
http://www.trulia.com/real_estate/Park_Slope-Brooklyn/5202/market-trends/
At lot of the places I've been looking at are 2 bedroom 1 bath and they are all asking for around $600/sqf. According to Trulia that's 2006 levels. Isn't that near the peak of the bubble? or right before the burst?
Is it unrealistic to expect prices to be more in the 2004-2005 levels of $450/sqf?
What do you guys think?
Thank you
signed,
first time buyer
Comments
The peak of the bubble as when I sold in Manhattan and bought in brooklyn....mid 2007. Prices may have actually continued to climb through the rest of 2007 but definitely peaked by 1Q2008.
I think it's unrealistic to expect PS prices back at 2004-2005 levels and I think brownstones ( not condos) will bottom by the end of this year...yes, in 2 months. Good quality condos in quality buildings are likely to bottom at the same time as brownstone prices (whether you believe my timing or not). There are a lot of crappy developments out there and they are not likely bottom until sometime in 2010. DO NOT buy into a new development unless you have thoroughly researched the reputation of the developer/builder.
Posted by: daveinbedstuy at November 5, 2009 11:04 AM
"Is it unrealistic to expect prices to be more in the 2004-2005 levels of $450/sqf?"
I don't know.
But I'm pretty sure that's the level I buy at if prices get there.
Posted by: northsloperenter at November 5, 2009 11:54 AM
I think a single PSF figure for Park Slope is not likely to be meaningful. It's a large neighborhood with some locations (and school catchments) commanding a premium, and the housing stock can vary widely (from full-service prewars to vinyl-sided rowhouses). I think you'll get more useful responses if you say what kind of building you're looking in and give a rough approximation of where.
Posted by: ilovebrooklyn at November 5, 2009 12:30 PM
@ilovebrooklyn: this is what i prefer
1. above 5th avenue & west side of the park
2. small, no doorman co-op, nothing built after 2000
3. 2 bedroom 1+ bath with 700+ sqf
Posted by: kiosk at November 5, 2009 1:11 PM
I agree with ilovebrooklyn. Given your criteria, I wouldn't be surprised if you're seeing listings ranging from $500k to $1m. If you're set on comparing $ PSF over time, try to find similar listings based on renovation level, layout, location, building type, etc and then do the analysis. Trulia's broad market $PSF number won't tell you much.
Posted by: fawn at November 5, 2009 2:01 PM
Below are two examples, there are more and the trend is the same. Places are being listed for more than what they were bought for in 2006.
At first when I saw the prices, I thought they were reasonable but then I saw how much they were going for in 2006 made me think twice. Maybe I've just gotten used to seeing high prices. Where is the supposedly price adjustment in NYC?
http://www.streeteasy.com/nyc/sale/467707-coop-410-seventh-avenue-park-slope-brooklyn
listed for $499, recorded sale in 08/2006 for $418
http://www.streeteasy.com/nyc/sale/418564-coop-904-union-street-park-slope-brooklyn
In contract. last price was $475, recorded sale in 11/2006 for $425
Posted by: kiosk at November 5, 2009 2:18 PM
Just because you want something at a psf below the levels of 2006 doesn't mean you are going to get it.
PSF varies greatly with type of building, location, architectural desirability, etc, etc, etc.
Posted by: daveinbedstuy at November 5, 2009 2:39 PM
There has been a price adjustment in NYC, but that doesn't mean prices in Park Slope are destined to go back to (or should be at) 2004-2005 levels. You could poll everyone on this site and come up with lots of opinions on how the market is going to fare over the next 1, 5, 10 years. In the end, though, you’re going to have to decide for yourself whether to jump in or wait it out. So, do your research and find places that are priced well based on today’s market. Or, keep prior sales Easy Street data close to you heart, your down payment in cash, and hope the NYC economy takes another dive.
Posted by: fawn at November 5, 2009 2:48 PM
I think we all recognize your desire to get the value of an apartment right. I think the first step is to start with the math:
A $450k apartment with 20% down at 5% 30yr FRM = a monthly mortgage payment of $1,932.56 + $600 est. maintenance = $2,532.56.
When you consider the interest expense deduction equivalent to $350 per month and the principal payment equal to $440 per month gets your equivalent rent payment to $1,742.56.
I think you need to ask yourself if you think $1,742.56 is an acceptable rent to pay for the type of apartment you can get for $450k. If so, then you should be comfortable with buying the apartment.
Posted by: harlem381 at November 5, 2009 2:57 PM
Thank you all for the advice
Posted by: kiosk at November 5, 2009 3:03 PM
BTW......The Senate voted on Wednesday to extend the home buyer tax credit through April 30, 2010.
The program is being expanded to include a $6,500 credit to buyers who "move up" or "trade-in" their home for a better one, as long as they have lived in their current property for at least five years.
The credit will not cover second homes.
It is limited to homes purchased for less than $800,000.
The credit will be extended to a larger pool of buyers by raising income caps to $125,000 for single filers and $250,000 for joint filers, up from $75,000 and $150,000, respectively.
Provisions strengthening the authority of the IRS to oversee the processing of credits have also been included in light of reports of rising fraudulent claims. A HUD-1 settlement statement will now be required when claiming credits.
Posted by: harlem381 at November 5, 2009 3:16 PM
As others have said, the Slope is a large neighborhood; it's really a collection of neighborhoods. There are okay parts, good parts, and premium parts. They can't appropriately be lumped together. And the paramaters you provide for the area in which you seek to live do not narrow it down much.
That said, your general question is interesting: Will prices in the Slope decrease?
Of course, no one has a working crystal ball.
But studies from last year showed that NYC prices would decrease. And they were right. So, what do more recent studies show?
Deutsche Bank has been predicting (was predicting?) further NYC decreases.
What do other experts predict?
Do any of you Brownstoners have a good sense of it?
Posted by: Pigeon at November 5, 2009 4:15 PM
I think Harlem is right. Also, just FYI, prices will be lowest in January and July. Inventory will also be lowest in January and highest in May and September.
My own opinion on prices is that they're nearing stabilization but will go down again if and when interest rates increase and/or foreclosures or unemployment increase. Note NYT said today Fed is keeping rates low.
Posted by: mopar at November 5, 2009 4:57 PM
"Is it unrealistic to expect prices to be more in the 2004-2005 levels of $450/sqf"
Absolutely not. In fact it is unrealistic to expect them not to fall that low or worse. The fundamental price metrics are 3 X Annual Income (employment is falling now) and 10 X Annual Rent (rents are falling now). Do the math and update your variables as the economy gets worse.
Be careful reading DIBS' comments. He's a permabull.
The last bubble popped and bottomed about six months (very short time range for slow-moving real estate) before the monthly-reported NY Case-Shiller Index showed positive change from a year prior (aka year-over-year, YOY). Approximately, the same thing will happen this go around. Right now, it's about -12% YOY. When it goes back up to zero and then positive, the bottom will be in and stay relatively flat like last bubble.
People think the index is irrelevant because it excludes 2 plus fams, coops and condos. But they're wrong. It was relevant on the way up (+200% from last bottom), it'll be relevant on the way down.
Don't fall for the rising interest rate urgency argument. It's a non-factor for buyers. The market will eventually and automatically adjust to interest rate spikes. It's a seller's concern. Besides, by waiting and saving, you put more money down on a cheaper house. And you'll have more choices at a given price point which ultimately means that that price point will come down.
Saving one buyer at a time.
***Bid half off peak comps***
Posted by: Brownstones Half Off at November 5, 2009 5:43 PM
Do you own a place, Brownstones Half Off?
Posted by: bessie2 at November 5, 2009 6:13 PM
"Do you own a place, Brownstones Half Off?"
I think BHO is hoping for more decline in NYC real estate, so that a nice brownstone will be more affordable for him.
I can't blame him.
He often presents his bearishness rather well, I must say, even if it is an extreme and rather unlikely view.
But -- who knows? -- he could be right.
Posted by: Pigeon at November 5, 2009 7:56 PM
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