Rob said

"i wouldnt buy in harlem. most of harlem is a cesspool and it really is way out in bumblef*ck commute-wise, same with fort greene. would i rent in those neighborhoods? yes. i just think prices in general for marginal neighborhoods are still ridiculous. the problem with harlem and fort greene is that it's still totally ghetto coupled with the fact of very VERY annoying yuppies (of all colors) who wanna change things because they paid so much to live in the hood. both sets are kinda barfworthy"

I luuuuuuuvvvvvveeeee you, bro!!!!

truer words were never spoken!! keep up the great work, I'm serious!!

Posted by: bklyn_rntr at March 8, 2010 9:17 PM in response to Condo of the Day: 383 Carlton Avenue, #11W

and BTW I've lived in brooklyn a long time (13+ yrs) so I think I get it...I don't get comments that wall street bonuses will drive prices one minute, but then when you pick at that claim, they are only driven indirectly...it seems to me RE is always a trickle up type market, one guy trades up when he sells to another guy lower down the ladder. There are a few exceptions, the cash buyer, the trade down retiree, or the quirky superstar, but they are nowhere near numerous enough to support a market.

Posted by: bklyn_rntr at March 1, 2010 10:59 PM in response to House of the Day: 73 Willoughby Avenue

and one more thing...I fully believe that the ordinary employee probably got the shaft this year in wall street...those bonuses went to well established wall street employees who went to their bosses and showed an offer letter from another bank if they weren't paid....In 2005, 6 and 7, everyone got the love, today, not so much.

Posted by: bklyn_rntr at March 1, 2010 10:54 PM in response to House of the Day: 73 Willoughby Avenue

I agree that Brooklyn wasn't driven by a sudden need on Jamie Dimon's part to slum it here with the rest of the worker ants, but it was driven at least in part by his banks willingness to lend US$millions on houses to people that had no hope of paying the money back. At least not in the "normal" manner (i.e. pay it off over time). There are some here who seem to be experts on property shark and ACRIS...they should take some time to look up the mortgages on some of these properties..... they are huge and they are exploding on people.....I am BHO's twin in that respect, when banks aren't lending there's very little support to prices...who knows if it stops at 10x or 5x! I certtainly don't. I do "know" two things a) today and for the last 5 years renting is way cheaper than buying. In fact its cheaper even than the interest only on a mortgage even before principal payments(for me at least) and b) banks are tightening credit standards but prices have only started to react to this new credit environment.

Posted by: bklyn_rntr at March 1, 2010 10:51 PM in response to House of the Day: 73 Willoughby Avenue

and I used "urban Pionerr" because to most of wall street heavy hitters, anywhere across the bridge is pioneering!! Things from their point of view have changed less than you think.

Posted by: bklyn_rntr at March 1, 2010 10:24 PM in response to House of the Day: 73 Willoughby Avenue

I didn't mean to knock Fort Green, I actually like the neighborhood, but its not a masters of the universe type area even after it has experienced massive improvements in the last 10 years. My point was that these Brooklyn neighborhoods, while very nice and a place I would be happy to live in for a very long time, are not likely to attract Jamie Dimon. I know, I know, there are many many levels of well paid people who are not Jamie dimon, but most established people on wall street have real estate, in fact most have too much real estate and after the 2008 scare, they are more aware now than they have ever been that this is an illiquid asset class with a huge cost of carry and high transaction costs. I would imagine that real estate is NOT the first place that these masters of the universe are putting their money in today.

I don't understand this blog sometimes, if anyone expresses a bearish view, its either personalized (DIBS), or escalated (you're dissing the country/city). Sorry guys its just money...Americans have been through cycles of rich and poor many times and it didn't change the essential nature of this country. In fact, I'd bet that most of the people that built those brownstones in Clinton Hill, Fort Green, Bed stuy and even the heights lost money when they sold. They bailed when the subway came through or they lost a shedload of money in one of the many market "panics" that hit in the 19th and early 20th century. America's health has NOTHING to do with any one individuals losses/gains on an RE investment. So please get over it, its just an opinion and there's nothing magic about any particular number.

Posted by: bklyn_rntr at March 1, 2010 10:23 PM in response to House of the Day: 73 Willoughby Avenue

iwannabrownstone too, but I may not get one, but then again I might and at a reasonable price, who knows. There's nothing magic about 10x either for or against as far as I know. They could just as easily fall to 8x for the following reasons:

1. There is a massive oversupply of housing across the US and NYC is no exception.
2. Bank lending is falling, not rising.
3. People borrowed huge amounts of money to buy houses with stupid terms that explode in their faces in the next year or two and when they go back to the bank they are never (In my opinion) getting those deals again.
4. Renters, of which I am one, are paying a lot less to live in the same place than they would if they paid the current asking prices and put 20% down, even if they could get a mortgage to buy a brownstone in what was called a ghetto 10 years ago.

All that means that the pressure is one the seller to adjust the price expectations more than it is on the buyer. So I wouldn't be at all surprised to see a 10x number in many neighborhoods.

On Wall Street bonuses, I don't think we should forget psychology. I know they got good bonuses ths year but the sense of confidence around the sustainability of these is lower than than at any time in the last 20 years and I would be that most of these wall streeters are buying houses in the Hamptons before they decide to urban pioneer in Fort Green.

Posted by: bklyn_rntr at March 1, 2010 9:16 PM in response to House of the Day: 73 Willoughby Avenue

Hey BHO I'm all there on half off. I don't know if you are right about 10x specifically, but look at this study by the fed.

http://www.frbsf.org/publications/economics/letter/2004/el2004-27.html#subhead1

It says two things, one is that NY is not that different to the rest of the country in terms on rent to price ratios, yes its higher than rural areas, but it's not that different to other "bubbly" areas in Boston and the west coast. and secondly it says that most of the readjustment back to historic norms should happen through house proces and NOT rising rents. That has been the experience in past busts. This was a 2005 study that already showed price to rent ratios way higher than history. Now the trace back is likely a "normal level" whatever that is- is likely to be only in its early phases (since a) rents are falling and b) prices are today still at 2004/2005 levels. 10 is not unrealistic imho.

Posted by: bklyn_rntr at March 1, 2010 7:17 PM in response to House of the Day: 73 Willoughby Avenue

I suppose I am saying that I think that prices will take a second leg down when the government pulls mortgage support and when the backed up foreclosures finally hit the market. I don't believe prices will fall 65% from the peak, but then the Japanes data says anything is possible.

Posted by: bklyn_rntr at February 24, 2010 8:28 PM in response to Case-Shiller: Recovery Waning, Double Dip Possible

Chart does say 45% or so for Japan but Japanese RE institute says values dropped in Japan's 6 largest cities by about 64% from peak and commercial about 85% from peak. I imagine Tokyo is even worse than these stats.

http://www.reinet.or.jp/docs/outline/6daitosi.pdf

Anyway even these stats can understate the carnage, average prices can fall but because the same money can now buy a better place, the average within a given category (low end, middle high end etc) can be devastated. Indices try to take that noise away by tracking only repeat sales of existing housing stock, but it's difficult to do.

In the end, it seems to me any particular house is only worth what a banks will lend you to buy it. Cash buyers are a dream but they are a small minority, they don't set prices, banks do in most times. When banks won't or can't lend, then the market is made up of cash buyers who are likely to be a) savvy about money or they wouldn't have cash to buy and b) likely to have less to pay than a bubble buyer with a lot of no money down, teaser rate mortgage resources at his/her disposal.

Posted by: bklyn_rntr at February 24, 2010 7:49 PM in response to Case-Shiller: Recovery Waning, Double Dip Possible

Is it just me or is the spin around these reports just silly and distracting? 2 years ago prices would keep going up, then it was, okey they'll rise modestly orver time, then no way could they fall, now they've fallen and it "OK folks; it's all over now". A 30 cycle of housing appreciation, interupted in the early 80's and early '90's is being tested and we're supposed to believe that it'll all get resolved in a year. I don't get it.

Posted by: bklyn_rntr at January 22, 2010 9:16 AM in response to Corcoran: 'Brooklyn Pricing May Be Reaching Bottom'

I lookd through a lot of these rulings on the link that i disagree gave us. a lot of them were dismissed without prejudice, I think that means that the bank can file again when they have the paperwork THEY WERE PAID TO DO IN THE FIRST PLACE in order. In a couple of cases he dismissed the default petition because there was NO RECORD THAST THE BANK EVER OWNED THE MORTGAGE. What's he supposed to do, say OHHHHHH you're a BIGGGGGG BANK that peed a lot of government money down the toilet, so we HAVE TO believe what you say over the word of some schmo....of course we should...banks and their lawyers should be paid hundreds of millions of dollars in servicing fees and legal fees so that when they don't bother to do their jobs we get the taxpayer to cover their losses and giver their lawyers a free ride in court....please...where's What when you need him???!!!

Posted by: bklyn_rntr at August 31, 2009 10:21 PM in response to The 'Judicial Don Quixote' on the Foreclosure Frontlines

well I would imagine that any normal bank will look at the debt you have, at the value of the apt you "own" and then decide if you can borrow. If you owe 850kon a 500k apt you owe a lot of money you don't have. Why would any bank lend to you, and who would refi that mortgage. No sane bank would. Your FICOmay be fine, but you ability to borrow is still massively impaired. Oh and BTW when your existing guy realises that you are trapped in the mortgage you have wait to see the crap treatment you get from servicers etc, because they know you can't re-fi away from them.

If you default, you get put in the penalty box for 7 years and then all's fine, as far as I understand it. So default, rent and save for 7 years and then you can borrow again or carry on paying a multiple of what your property is worth for 30 years and hope prices come back. Seems like an easy decision to me.

Posted by: bklyn_rntr at August 25, 2009 10:13 AM in response to Mystery Downtown Development Going Affordable

well if your mortgage is worth a multiple of the value of the house and you are not loaded (i.e. you can't cover the difference from savings) what happens to your credit standing? you are not getting another mortgage anyway so you are essentially paying a huge premium to live in public housing!! I'd say for most people that you are economically better off to walk away and find a place in a nicer building to rent, at possibly less than your mortgage payments. Your credit is toast for like 7 years, but you effectively can't borrow anyway if you are overleveraged on a house

Posted by: bklyn_rntr at August 25, 2009 9:55 AM in response to Mystery Downtown Development Going Affordable

Long time lurker here...I feel really sad for anyone that bought into these buildings. They are so screwed and forget about re-financing. Seems to me the best option for those owners is to walk away from their mortgages, because they're credit is finished anyway.

The risk on new versus existing is just different, I don't see how it's more risky to buy new when existing is riddled with fraud too. True in existing you buy into an established building, but there's then you take on a whole set of other risks.

Posted by: bklyn_rntr at August 25, 2009 9:41 AM in response to Mystery Downtown Development Going Affordable

This house is too small and even though its carroll gardens, it not worth anything near $1m. that's 7k a month in interst and principal payments..too much. Prices are too high in brooklyn and it seems as if the wave of price collapse is moving here..

BTW Love the what!!

Posted by: bklyn_rntr at March 31, 2009 11:03 PM in response to House of the Day: 93 2nd Street