REBNY Numbers Confirm Strong '06 for Brooklyn
On the heels of last week’s announcement by HMS Associates that Brooklyn prices rose 8 percent last year comes the news from REBNY that the market performed significantly better in certain segments of the market. Median prices for one-, two- and three-family houses surged 16 percent while median co-op and condo prices rose 9 percent…
On the heels of last week’s announcement by HMS Associates that Brooklyn prices rose 8 percent last year comes the news from REBNY that the market performed significantly better in certain segments of the market. Median prices for one-, two- and three-family houses surged 16 percent while median co-op and condo prices rose 9 percent and 12 percent, respectively. “This report clearly shows that the strength of New York’s residential real estate market is not limited to Manhattan,” said Steven Spinola, president of REBNY. He added that the board sees “no signs that the current upward trend is slowing.” Miller Samuel’s Jonathan Miller went one step further when he said, “It’s probably as hot as or hotter than Manhattan.” Greenpoint had the highest increase in median sales price for apartments at 65 percent while the price per square foot average in Carroll Gardens was up a whopping 32 percent. Dumbo had the highest average condo sales price at $1,030,000.
Brooklyn Housing Market Surges in 2006 [Crain’s]
Entire REBNY Press Release [The Real Estate]
Brooklyn Boulevard of Brokers’ Dreams [NY Post]
Brooklyn Home Prices Jump 16 Percent [Bloomberg]
Brooklyn Prices Up 8% in ’06, Appraiser Says [Brownstoner]
1:39 PM asked a good question. Didn’t unsold inventory levels also increase markedly in 2006?
Does anyone know the percent change in transactions from the beginning to the end of 2006?
gpt growth rate is skewed. there was a lot more new development inventory in 2006 than in 2005. of course the median will substantially increas when you go from very little inventory in older buildings to a ton of new condo developments. the interesting thing to watch is whether the median still goes up in 2007 when we get the drop on the inventory overhang and the economy sputters in 2H07.
“they aint building any more brownstones”
We haven’t run out of dilapidated brownstones neither. If demand (I mean financially-backed demand) was very strong, we WOULD have run out. Everything would have been renovated and ready for move-in. Dilapidated brownstones are almost the equivalent of vacant land. You damn near have to build a new house from the inside out.
Hey, 5:05…I got a dingdong for ya’, right here…
The correlation between the two markets its fairly loose. That R squared ain’t gonna be that high on that one. But the rational could make you think it’s a stronger relationship than it actually is.
A True inverse relationship is simply interest rates and bond prices. People Selling out of a highly valued equity market tend to put that cash in fixed income instruments.
Thats not thinking of people that are FORCED to sell because the market is tanking and they just take their cash and hide it under the mattress.
They dont say, hey I better go buy a house now…. The Market is tanking.
It’s the low interest rates and the creative financing that makes people believe they can afford more house than they thought they could.
Wayne!
Thank you very much!!
Sylvia, usually a recession is a “hind sight” realization, so until we’re coming out of it, we won’t realize we’ve been in it. So for right now, I think we’re OK.
The majority of loans on properties in brooklyn were NOT sub prime loans, and were NOT ARMS. Now, for those folks that are unfortunate and could only come by a sub-prime floater, they could very well be in trouble if those adjustments start to kick in, and they haven’t seen the 30% increase in valuation for their properties, and one of their tenants stopped paying rent. Yea, those folks may have a problem.
But for someone that has a FIXED, 30 yr mortgage… their property value not going up is not going to adversely affect them.
But as Wayne pointed out, if you think it was negligent to get a 30 year mtg in the last 2 years or so, and would have been better off in the market, well, let’s see what you would have gotten.
If you simply rented your place and kept your 20% down payment that you must have had on that $1mm brownstone and invested in the S&P. From Jan ’05 until today, your $200K would be worth $227k today. OK… good for you… But how much is that $1MM Brownstone Today? Do you think it’s more or less than the $1.13MM you suggest?
I’m thinking maybe $1.6 or even MORE!!
Now, I’m not saying it’s going to be worth $2MM next year… it may only be $1.7 or God forbid… Let’s say the market slides 12% in the next month and if falls to $1.4…..
Guess what…. You’re still screwed! because you need $280K Down payment and I don’t think you’ve made that much in the market…..
Unless, like Wayne you plunked it all in GS stock…. And was a Goldman Partner at that! 🙂
I’m sorry
what’s the correlation between the equity mkts and the housing mkt, are they inversely related? i think the past year or 2 showed that they were positively correlated, but i thought historically they were inversely?
reason i ask is if the equity mkt cracked, then your investable dwnpymt would be lower so you just got burned…if they’re inversely correlated, then Hal’s comment would work.
Current market conditions would tell me that given where rates are, it really can’t get much lower, subprime is blowing up so lenders are tightening liquidity, market’s been rallying up through early last week…what would the potential be that both equity mkt and housing mkt both tank?
The real estate market almost always seems to be high. Especially when you’re looking to buy into a decent quality of life. If you must wait to buy a home, the stock market is on sale right now. If you’ve got some cash to invest medium-term, get an index fund. Whenever the real estate market tanks, dump the equities and buy a house.