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]
I really don’t have to even comment because there was some excellent points made this time (for a change). But I side witrh those who consider housing like food. Granted the cost of food and housing has different impacts. THe price of real estate should be altered at some point. The sooner it does the sooner the market is back on track. Those of you who blogged that this is going to tank and the end oof the world is coming are mistaken you just don’t have a better way of venting your frustrations than wishing for doom. You will be non owners of homes long after this market condition is over. As I always say I am a home owner in the neighborhood, I look forward to the Atlantic Yards and I can wish all of you ill wishers the best. Your tank will be back soon!
To be more exact, the right way to think about the buy/rent mathematics is that currently, it still costs more to buy after tax benefits, after equity build, etc than it does to rent the same space.
The bet here is that your levered return on the downpayment will outperform the investment you could have made with the downpayment in the market. Now if real estate appreciation falls to typical 1-2% above inflation, that can play out to be something like 8-9% on a levered downpayment…So…depending on what you think you can do by investing in the markets vs what your levered return on a slower growth real estate property should be the more calculated method of determining whether you should buy/rent.
The caveats, the “qualitative” benefit of owning vs renting, and you’re still making a bet on the market, whether its housing or equities…so no one really knows until you actually cash out of your investment down the line.
I’m ok with a recession. Its a great preserver of old things in a perverse way. Too much wrecking of the old fabric and replacement with new (scarano) places when the economy is going gangbusters.
5.01. Yes, thanks for the digression.
Anyway, look up “spend” and look up “lose”. Heres a clue – if you spend it you receive something in return – in this case a roof over your head. No ones arguing you can’t make money in real estate. Try not to be a dingdong.
i don’t think anyone who has claimed that a recession is even a 1 in 3 chance of being possible that this will directly affect real estate prices in brooklyn.
i don’t think that brooklyn is recession-proof, but i personally don’t think anything but up to a 10% correction might occur at worst, which still doesn’t really answer why people who need a home to live in would not consider buying when everyone around them are making that much, and sometimes more PER YEAR on their home (and investment).
Hey, 3:34…I’ll put a finer point on it for you:
You have a two choices (three, if you count living at home with your mommy): You can either buy or rent. This blog string is a discussion of real estate in market/investment terms. If I rent, I don’t get my money back. You’re right, you do get to use the apartment…Kind of like buying and eating a can of peas, right?
When you buy you might not see any kind of return on your investment. But there’s a good chance you will. I bought my apartment 8 years ago for $217K. What’s it worth now? $900K. I could have been paying rent all these years, which I guess would have been fine. Instead, though, I’ve built equity in a piece of property. Hey, man, I’m getting payed to live in NYC. Cool, huh?
Does that help?
All right, I agree that calling a 1-in-3 chance of a recession “probable” might be stretching it. But not necessarily. And quibbling about the vocab doesn’t change the fact that a 1-in-3 chance of a recession certainly doesn’t make a recession “improbable”.
And for the record, I’m not holding Mr. Greenspan up as the most reliable authority on the subject, either. I would venture say that he has to be careful what he says, for fear of disrupting investor sentiment, wouldn’t you agree? I mean, he so much as mentions that there is the possibilty of a recession, and the markets drop 400 points. And then he’s quick to qualify it as “only” a one-third possibility.
Here’s someone else who knows more than I do, explaining it better than I could:
http://bigpicture.typepad.com/comments/2007/03/all_is_fine.html
thank you john for highlighting once again sylvia’s inaccuracy.
a one third probabilty does not mean “probable,” sylvia. probable indicates more than half. a classic case of someone twisting words to meet their own arguement.
From MSNBC.com:
Former Federal Reserve chairman Alan Greenspan was quoted as seeing a “one-third probability†of recession in the United States this year, according to an interview with Bloomberg.
“We are in the sixth year of a recovery; imbalances can emerge as a result,†Bloomberg quoted Greenspan as saying.
“Ten-year recoveries have been part of a much broader global phenomenon,†Greenspan said in the interview.
– Granted, prices being what they are, there’s a bigger likelihood of a downturn, but one, I need a place to live. Two, even if there is a downturn, I don’t plan on selling ’cause I need a place to live. And three, prices could still go up, and I still need a place to live.
Unlike condos, they aint building any more brownstones and they’re hot properties for folks that 5 years ago wouldn’t want to move to Brooklyn. We got discovered.
There’s always the “rent” arguement but the fact is for me it costs less to own my 2-fam than to rent a similar duplex.