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]
“There are tons of New Yorkers who don’t make 100K and guess what? They don’t live in so-called trendy neighborhoods (the 95% of NYC that you mentioned, Wannabe). They live in the outer boroughs and don’t complain that they can’t afford Tribeca. There are a lot of people with a lot of money in NYC. You are probably looking to buy in a neighborhood where those people already live and if you don’t feel like it’s worth it to compromise then you should consider moving out of the city.”
You don’t know me, and you are completely incorrect in your assumptions.
This is where I bow out of the conversation. It’s pointless to argue with someone whose helpful advice is to tell me to move. Gee, thanks for the advice. So helpful. Really.
People shouldn’t feel like they are entitled to live in a “perfect” neighborhood in a “perfect” house/apartment for a “reasonable” price. They always seem to blame it on the rich who are pricing them out. There are tons of New Yorkers who don’t make 100K and guess what? They don’t live in so-called trendy neighborhoods (the 95% of NYC that you mentioned, Wannabe). They live in the outer boroughs and don’t complain that they can’t afford Tribeca. There are a lot of people with a lot of money in NYC. You are probably looking to buy in a neighborhood where those people already live and if you don’t feel like it’s worth it to compromise then you should consider moving out of the city. There are definitely places that can be had for $300K. It may be a 1 bedroom in Queens…but your price range isn’t going to make a duplex in the Heights suddenly appear no matter how much creative financing you do. It’s time to start being realistic. My brother and his wife live in NJ and want a 4 bedroom home with lots of property and a great school system. But they can only afford $210K. They keep looking at $300-$350K houses, as if looking will make the prices come down. It’s just doesn’t work that way.
“With all that said, rents are out of whack with purchase prices. Something’s gotta’ change.”
If the change involves rents going up without a seriously good increase in average wages, I can’t help but think a large number of people will leave the city. Frankly, the only big plus to renting at this point in time is that it’s a pretty decent deal for the money.
LOL! i own. If you only knew, your idea of devils’advocate is a description of my life. This includes 5+ years of infertility and a husband who has been unemployed for over a year twice. The only plan I had was that I knew that I wanted children and that after moving back to Brooklyn at 18 I will never live anyplace else. My husband didn’t believe me on the latter issue until we spent the first 2yrs of our marriage living 3hrs apart. There’s been a lot of good advice offered here and you keep poo-pooing them all. I just posted to say that I was in your shoes and managed and you can too. Good luck.
– creative financing IF it makes sense for your circumstances
– buy low, sell high: find a bargain, use smaller brokers, stage it, consider selling it yourself
– buy a fixer upper (ahem, Brownstoner) and invest sweat equity
– decide whether your home owning ambitions are compatible with your income and modify one of them
– look at cheaper neighborhoods in Brooklyn, or consider Queens or Riverdale or Washington Heights or any of several ’emerging’ neighbohoods outside of brownstone Brooklyn and Manhattan
– consider a multi-family home and become a landlord (I know you don’t want to but who ‘wants’ to become a landlord?)
I say the haves will continue to have and the have-nots will continue to suffer as opportunity passes them buy. Depending on your situation if at all possible I say BUY something if you are planning to stay within the NYC tri-state area. Buy a Co-Op or condo. I have seen apartments go on the block for as low as 30k within the last 2 years. Now that price may seem impossible in this day and age but for sure you can get something under 100K or at a price that you can afford. You must remember the tax incentives and when your 2 year stint is up trade up to something you desire more if your condo or apartment is not doing it for you. If you have children and/or require additional space outside of a 1 or 2 bedroom my suggestion to you is to either move to a place were you commute will become crazy or just chalk it up to being a renter. If you are a renter and know that you can not afford the house or apartment of your dreams you have to be willing to work up to it (again if you personal situation will allow this). If you cannot make the sacrifice or have the tools/opportunities available to you to come up with the down payment or have a salary that does not lend to the creative financing phenomenon I would suggest that you leave the NYC area and move west or south were prices are usually cheaper and the cost of living does not hurt as much. Bottom line the real-estate game is another vehicle fostering the concept of the haves versus the have-nots. It’s like you either have wealth Or you will spend your life trying to get it in NYC.
I Own, I’m glad to know I’m not alone! Hang in there, we’ll figure it out!
Hi “I own a condo” and new stoner. You are correct about pop. as a whole-sorry to be unspecific. I’m talking about migration from the city in terms of population (see link below). Unlike Florida, which has large #s of retiree/home purchasers coming in (from places like nyc)-our city loses homeowners every year to this type of migration, and it makes our vulnerability to a housing decline potentially greater.
http://www.nyc.gov/html/dcp/html/census/pop_update_03.html#a
“Net migration, calculated as the difference between total change and natural increase, was estimated at about -100,000 persons. Net migration represents the net balance of flows into and flows out of New York City. While estimates of the net flows into and out of the city are difficult to estimate, the data we do have has consistently pointed to a picture of population change that has not been altered substantially since the middle of the last century; for most periods, New York City loses population through domestic migration (net migration from and to the 50 states) and gains population by way of international migration. Most recently, DCP estimates that the loss of 100,000 persons through migration is likely the net result of gains through immigration in the range of 339,000 persons and losses through domestic migration in the range of 439,000”
Also note that even expressed as a percentage our pop. increases over the last few years have been very marginal. I’ll stop being a geek now.
Anon at 6:20 – We should meet for coffee LOL We have so much to discuss!!!