Manhattan vs. Brooklyn, Boom and Bust
Jonathan Miller posted a neat little graph over at Curbed on Friday, which attempts to show the savings of living in Brooklyn vs. Manhattan over the past seven years. Mr. Miller acknowledges that the graph is “simplistic and fraught with problems,” but it gives an approximated view of how much buyers save by living in…
Jonathan Miller posted a neat little graph over at Curbed on Friday, which attempts to show the savings of living in Brooklyn vs. Manhattan over the past seven years. Mr. Miller acknowledges that the graph is “simplistic and fraught with problems,” but it gives an approximated view of how much buyers save by living in Brooklyn, and that saving’s relationship to the boom and bust years. Using median sales price data (of condos? co-ops? houses? all available residential sales?), Mr. Miller concludes that the peak time of Brooklyn savings relative to Manhattan was the second quarter of 2008. Again, it’s an approximation, but an interesting one. Take a look at the original article for more details.
Three Cents Worth: Manhattan to Brooklyn Value Proposition [Curbed]
Yeah, prices in Brooklyn are increasing, and Manhattan prices are decreasing.
“but i’m sure you’d change your mentality if it were AAA rated by an agency via AIG wrap or Ambac or MBIA or Citi or BofA. ;)”
You serious?
***Bill Thompson for Mayor***
would i rather take a chance with 1.5% price to a “shady” non-regulated insurance company starting in a market that’s off 35% or would i rather buy some insurance policy from ex-AAA MBIA AMBAC FDIC AIG ALPHABETSOUPFORLUNCH?
personally, i’d take it off the realtor fee if it doesn’t work out.
there are no guarantees in life.
this product idea is in early gestation period but sounds like it could be a grand slam to me.
Since they are not an insurance company and not regulated by any particular state they are probably not required to keep a certain level of statutory capital (or any).
If home prices drop 10% in the next year you can bet they dividend all the money out and leave policyholders to fight over whatever is left.
“When the Company sells Equity Protection contracts, it maintains a portion of the purchase price in reserve accounts established to fund the Company’s contractual obligations created by declines in the local house market indices (HPI). These accounts, and the funds within these accounts, are the property of Working Equity and you do not retain any legal or beneficial interests in those accounts or the funds within those accounts. Once you pay the purchase price for an Equity Protection contract, that money becomes the property of Working Equity. We do not guarantee any particular return on any investments we make and hold. We manage and direct these investments for our own purposes. Working Equity does not act as a money manager or fiduciary for any holders of Equity Protection contracts, individually or in the aggregate.”
SHADY!!!
banks will love this product like mortgage insurance.
i can see them (eventually) financing the cost, so you pay over 30 years.
but i’m sure you’d change your mentality if it were AAA rated by an agency via AIG wrap or Ambac or MBIA or Citi or BofA. 😉
now that the starting point is 35% nationally i think the model has a real chance of success. they will use the options (UMM and DMM) now available to hedge their positions, but at the end of the day you have to worry a bit that they manage correctly.
this is how the mess got started and they are effectively a tiny start-up insurance company. it’d feel a lot better if it were berkshire hathaway.
“if you could pay 1.5% to put a floor on your stock portfolio, you’d do it right?”
If I was confident that the insurer would be financially healthy enough to make good on a claim, absolutely. But it’s that ‘guaranteed mentality’ that has collapsed the markets worldwide. That blind faith in some financial instrument. By “I’m not sure they can win…” I’m referring to the insurer who might go bankrupt if prices nationwide collapse more than they anticipated. Then you’d be throwing away $25K or so on a modestly located brownstone. Is that not a lot of money to you?
This is a small outfit, equityprotection.com. If they lose their bet about the market, you will lose too. There’s only a two year waiting period between buying the contract, selling for a loss and filing a claim. You better be first in line.
***Bill Thompson for Mayor***
if you could pay 1.5% to put a floor on your stock portfolio, you’d do it right?
why wouldn’t you do that on an investment where you can apply your monthly rent to the carry cost?
maybe i’m missing something but this kind of makes it a no-brainer for anyone on the fence. or even close to the fence.
maybe not for the hard-core renters. why bother with counterparty risk. rather keep my money in bullion.
I’m not sure they can win in this deflationary environment, ‘dope. It’s all but a slam dunk that any market will decline significantly more than 1.5% over the next two years. I see a run on the claims department. Bankruptcy. Unless of course they significantly undercut comps on that figure that they take 1.5% from. It seems kind of like a “black box” calculation that they do.
However, if we get meaningful inflation in two years, no nominal losses. No claims. They win (regardless of whether fresh bread will cost $50).
***Bill Thompson for Mayor***