Quote of the Day
Once we join the rest of the country in terms of accepting reality – we are by the way now falling under the same lending standards of income to debt ratios, and under the new appraisal requirements set forth in the lending crack-downs – we should see prices return to levels where they still should…
Once we join the rest of the country in terms of accepting reality – we are by the way now falling under the same lending standards of income to debt ratios, and under the new appraisal requirements set forth in the lending crack-downs – we should see prices return to levels where they still should be had the past 10 years of bizzaro world not happened. In 1-2 years (or less) wait and see if we don’t follow the rest of the country. I’m looking again at condos around Miami and they are around $100/psf – even less for anything that isn’t new construction. These same exact condos were in the $700-800 psf range just 2 years ago – I still have my old offering and information paperwork from when I was looking at the same units back then. One of the units that was asking $700,000, is now right at $100K with the seller kicking in closing costs. And we are talking prime neighborhoods. So sit back and watch. It’s not going to be pretty for sellers who overpaid, but will be great for families in our city who can move back in and not have to live 2 adults and 4 kids in a studio that they still can’t afford.
— by williamsburgguy in Toll Gets Serious About Selling at Northside Piers
cwbuecheler- its interesting you cite San Fran- the metro area is suffering some of the largest price drops in the nation- and some very high default rates on mortgages.
The tone on this forum a year ago would flame anyone sitting on the sidelines with cash as being stupid. Now- cash is king. Foreigners coming in to save the day? Not anymore. NYC will always take a while to catch up because of the extremely large number of coops that required borrowers to put down way more than the minimum that banks would allow and the lopsided supply demand curve. But you can only hold back the tide for so long. But its a double edged sword- if prices really do fall down fast in NY- that means its going to be a rough ride for everyone- much worse than right now.
The issue will always be the PE ratio. In other words, what I can buy vs. what I can rent for what I could have bought. Camp Bull will say that the PE is not applicable since the equity in the house will appreciate so spend more to buy it now and leverage the thing. Camp bear will say that it’s all about not catching a falling knife.
I’ve been looking as well and when I see my 2 bedroom +office 1200/sqft henry street carroll gardens $2500/month rental for sale for $500K (give or take) then I would be a fool (financially) not to act.
My opinion, as cwbuecheler might be, is that when prices normalize and become stable to historic norms (for both appreciation and/or PE to rent) then it makes prudent sense to get into the market. And, it’s this lack of prudence on the behalf of many people in the last decade that helped to put us collectively where we are today. The fed didn’t make money cheap because they wanted you to save it.
On another related note, I rarely comment but I read this site every day and I gotta tell you that very few of the posters, bloggers, or stories featured on brownstoner really get at the real issue which is, of course, that we’re in the beginning of a stupidly terrifying and momentous sea change of a re(depre?)cession. Gordon Brown let the cat out of the bag today about this.
If we’re actually deep into this stag/deflation/(de?)recession then it really doesn’t matter what any of us want, since we’re all going to go down with the ship. If anything, Brownstoner of late seems like a ship full of optimists talking about the beauty of the sinking ship.
my two cents.
Why is it that people understand (and are wildly in favor of) markets, when the markets are zooming upward, and then when they come crashing down can’t believe that they will continue to go lower? But they can, and, more often than people would like, they do.
sam – I think there are a lot more things that attracted people to NYC than just the high-level finance jobs. I’ve been here for four years now working for internet startups, for example, and would’ve moved here earlier than that if I could’ve found the right job.
And yes, the restaurants and museums and parks and operas and shows and music and blah blah blah do play a big part. There are only a few cities in this country where you can find so much stuff packed so tightly together. There’s just not a lot of places that offer what this city does. In fact the only other city I can think of that comes close, in this country, is San Francisco … which is equally as pricey.
If RE prices fell 30% in New York City during the late 1980s/early 1990s, why can’t they fall 50% or more now? Bear in mind that the stock market recovered from the 1987 crash within a year. That doesn’t look likely now. If anything, the markets will probably continue to slide (along with the dollar, employment levels, tax revenues etc etc). Would it really be surprising if NYC values returned to pre-2003 levels? I don’t think so.
I dunno, Miami is pretty nice.
What attracted people to NYC over the past twenty years has been the ridiculously lucrative job offerings on Wall Street, Madison Avenue, etc. If those big bucks are not there, what’s the attraction here? The subways? the fusion Thai-Somali restaurans? The problem with being really hot is that it’s easy to cool down. I’m not a pessimistic person but neither do I think that the future of New York is assured. we have a lot of problems too.
All kinds of trends can shift, and suddenly its 1974 all over again. Never say it can’t happen again.
Yey, we’re never going to hit 100k for a condo currently going for 700k in Brooklyn, simply because at a certain point, people who still have decent jobs and make decent money would be insane *not* to buy.
I pay $2600/month for a 2 BR in Park Slope … that means that if a decent 2 BR condo or co-op came on the market, the same neighborhood, for anything less than $450k (or more depending on down payment), I would be spending more on rent than it’d cost me to buy. There’d be absolutely no motivation to stay in the rental. There barely is even with the price for decent 2BR’s in Park Slope hovering around $700k.
So the idea that it’s going to drop down below those levels seems unlikely. There are too many people like me who were priced out during the boom, but are waiting on the wings to jump when the price is right.
I felt sure DIBS molaasses story was going to be QOTD
“And we are talking prime neighborhoods.”
I didn’t realize there was such a thing when referring to Miami proper. It all looked like a pit to me.
And while I know property prices have crashed in Miami, 700K to 100K (or 75K as you posted in some of your other posts about Miami real estate) seem like the exception and not the norm.
Prices there have tanked about 30-40%, I believe.