Housing Bubble Starting to Lose Air?
We don’t usually get around to the Op Ed page ’til later in the day so we missed Krugman’s piece yesterday on everybody’s favorite topic, the housing bubble. Among the signs he points to that the bubble is already losing air are: The bubble doesn’t burst with a bang–inventory builds as sellers hold out for…
We don’t usually get around to the Op Ed page ’til later in the day so we missed Krugman’s piece yesterday on everybody’s favorite topic, the housing bubble. Among the signs he points to that the bubble is already losing air are:
Is there any hard evidence that properties in New York are sitting on the market for longer?
That Hissing Sound [NY Times]
Maybe I’m reading this wrong, but it seems to me the first person to say that Wannabe should move if she can’t find the kind of place she wants was… Wannabe. This is from her own post: “At this point, I suspect it’s going to be a 2BR co-op somewhere like Ditmas Park, Riverdale, or Jackson Heights… or finding jobs elsewhere and moving to another part of the country.”
Which is totally fine. Judging solely on her posts, she and hubby do not want to make some of the concessions that others on this board have made to stay in the city: moving to a less gentrified neighborhood, for instance, or being a landlord in a multifamily house. Their choice.
I don’t see the difference between that and the posters who are saying, “If you can’t afford it, move,” except that maybe they are not expressing as much sympathy as some would like. Unless I read her wrong, she’s saying, “If we can’t afford [a home without making such-and-such compromises], we’ll have to move.”
And really, what’s the other alternative? Price controls? Legislation to force the wealthy out of Brooklyn?
True that the Gretsch took a long time to sell out (as have other developments in Wburg). But a smaller development in Clinton (Manhattan) sold out in 3 days a couple weeks ago, Toy Factory on Johnson also sold out quickly (they didn’t release the units all at once), the Bennett in Wash Heights. I could go on. The reason why it seems like condos don’t sell out is that developers raise prices when the first few batches go. But were they to stick to their initial offering prices, I bet they would have no trouble getting those last few off the shelves.
I too have a child but we are in a very fortunate position with regard to both RE & income. The high costs of childcare is the reason why people move closer to their parents or find some cheaper alternatives like unlicensed home-based childcare. A babysitter in Manhattan runs around $500/week cash under the table for one child.
When I moved into my coop in `94 I was happy to find that, despite the seeming “luxury” of the building (doorman etc etc) there was a great mix of people, teachers and artists and bankers…now only wealthy folks can afford to buy here and frankly the atmosphere has changed. One of the strengths of NYC is that the wealthy often could not insulate themselves from regular people as they can in elite suburbs. I fear this is changing. The idea of “if you can’t afford it, move” is not only offensive but those who perpetuate this should go to Greenwich or Scarsdale to be surrounded by like-minded fat cats.
Wannabe, ignore the “you should move” comments. They’re just offensive and frankly, sound terribly classist – if you’re poor, move. You shouldn’t be here unless you’re rich. Wow, THAT’S a great point to make and a great attitude to perpetuate.
I’d love to see all the “haves” serve themselves at McDonald’s, police their own streets, keep their own firehoses and clean up their own garbage. Because it’s these people that aren’t going to have enough money to keep up with the rising prices.
Someone wrote: “The average household income in New York (depending on who you ask) is about $70,000.”
The median household income in the year 2003 was $39,937, according to the U.S. Census Bureau.
http://www.census.gov/acs/www/Products/Profiles/Single/2003/ACS/Narrative/160/NP16000US3651000.htm
I wonder if this is the largest # of topic posts on one thread in awhile on this blog? It certainly does speak to the level of concern about housing. I do a bit of research on this topic, and one thing I am fascinated by is the ways in which the pace of transactions for mortgages/refinances and buying/selling has increased because of the internet.
I think that the web has played a role in accelerating the real estate boom, and worry that it could play a role in accelerating a decline.
PS – I also tend to doubt the argument that NYC prices will stay high because new housing can’t be built here. It’s being built all over the place – especaially Brooklyn, and even though we have limited space here in the city, we have endured two major RE downturns in the 80s and early 90s. Also if we look at the cramped, crowded, urban island of Japan, that country has endured a huge real estate decline (and it’s still declining) for years.
The thing about childcare is that it is not forever. I adopted my daughter at 23 months and for the first few months after I went back to work, it killed me to pay so much to the (absolutely wonderful and perfect for us) babysitter every Friday, putting myself further in the hole. But every year since then, childcare has cost less. And now that my daughter is 9, I can actually see a day in the future that my daughter will no longer need childcare.
Just as with home ownership, it’s wise to look ahead–way ahead–about parenthood.
IMHO.
Native Gal – I, too, am glad it all worked out for you… Just curious, how old were you when you started to breed, after all that planning…
I know there are women who have an easy time fertility wise in their mid-late 30s… But not everyone. For me, personally, a child in my 20s was a breeze. Ten years later, it’s a different situation. If I had waited until everything was “on schedule” I might be looking at an empty nursery in my spacious home… How sad.
The poster who remarked about how difficult it is for women to have it all was right on the money. Having it all is a con. A few lucky women can pull it off. But it’s not all to do with planning. A lot of it is luck. Including when you arrive on the housing market scene. My husband pulled off an amazing coup in terms of purchasing an apt. in Park Slope in the 90s, then pulling out a few years ago for an unbelievable profit… Couldn’t do that now.
One more point about families and rising house prices in Brooklyn. More and more families are refusing to flee to the anodyne suburbs. If they have any money, or creative financing available, they are bidding high to get those good family homes here in Brooklyn. I have known several families who have “lost out” recently on great coops and houses, and therefore come in with very high bids right away out of frustration/desperation. It’s great for Brooklyn that more families want to stay, but unfortunately it means others can’t afford to, at least in prime neighborhoods. You have to pioneer. We did that, the nabe blossomed around us, and continues too.
puppypure’s contention that “The only exception seems to be new developments – they sell out within days” is quite untrue. it wasn’t even true a year ago, when, say, the gretsch building was on the market — did that one EVER sell out? and it’s certainly not true today, when new developments in williamsburg sit for months and months.
and 12:47 pm’s argument that “It’s the interest rates, stupid…. Mortgages rates are rising(have been higher for the last 5 weeks straight)” somehow fails to take into consideration that mortage rates were FALLING until 5 weeks ago. if five weeks of very slightly rising rates are causing a burst bubble, shouldn’t all those weeks of slightly falling rates in june and july have caused the bubble to GROW well into the summer?