Bubble, Shmubble: Who Cares What Journos Think
This article repeats a thesis we’ve heard a lot recently: The market’s alleged slowdown is a healthy return to normalcy, a healthy, stabilizing trend that is occurring in lieu of a dramatic bursting of the bubble : “It’s been an overheated market for so long that it is a slowdown, but this slowdown is kind…
This article repeats a thesis we’ve heard a lot recently: The market’s alleged slowdown is a healthy return to normalcy, a healthy, stabilizing trend that is occurring in lieu of a dramatic bursting of the bubble :
“It’s been an overheated market for so long that it is a slowdown, but this slowdown is kind of like what we used to have all the time, which is a normal market,” said Deanna Kory, a senior vice president at the Corcoran Group
We don’t get the sense that the market it slowing down much at all–at least in Brownstone Brooklyn. (We can’t speak to whether the public’s appetite for $1.5 million postwar three-bedrooms on the Upper East Side is waning.) We think all that may be happening is that seller’s having just gotten out of hand in their asking prices, so that we may be seeing more instances of listings selling below ask. If the foot traffic we saw at 41 Monroe Street yesterday is any indication, there are still plenty of people hungrily trying to find a place to call their own. Of course, we may be a little nonchalant simply because we’re not planning to sell any time in the near future. How about those buyers who are actively in the market for a brownstone? Are you still encountering multiple-party bidding wars and feeding frenzies around well-priced deals? We expect so.
As for the statistic above, as much as we like Professor Shiller’s work in general (we interviewed him a decade ago in a previous professional incarnation), we don’t give it much weight. We may well be in for rude end to the party for a lot of reasons, but we doubt that the number of times that bandwagon journalists have used the term is a particularly good indicator of the impending doom.
Signs of a Spring Slowdown [NY Times]
if there’s weakness in manhattan with the 10 year still hovering around 4.10%, be prepared for blood to run in the streets when it rises 150 to 200 bp. And if you’re argument that those properties above 1.5m are not as affected by interest rates, read the article again, its just this market that is cracking. Also, its well known that luxury apartments have done better over time than brownstones in manhattan (i.e they are preferrable to most brownstones measured by price increases over a period of time.) That’s not my taste, but I think its not a foregone conclusion that brownstone brooklyn will hold up better than other places. If those recent brooklynites from manhattan decide to stay and scoop up manhattan 3 bedroom apts, the demand in brooklyn will surely plummet and so will prices. The perfect storm is upon us in many ways.
If you read the article it said that the weakness has been at the top. 1-2 bedrooms still hot.
Claim by poster that weakness begins at top—
what have you read to back this up?
The Manhattanites have invaded Brooklyn. Their loss is brooklyn’s gain. They think they’re stealing Brooklyn at $500 sq ft.
This isn’t a comment on whether it is a bubble or not — I have no idea. But when real estate starts to head down, it begins at the top, not the bottom. If premeir Manhattan is really beginning to have problems, I’d be worried because weakness will show there before it shows anywhere in Bklyn.
Seems like all it takes is for people to believe there’s a bubble and there will be one. That and the unprecedented run up in prices in marginal neighborhoods. Owners in Bed Stuy better hang on. It’s going to get ugly.
Two separate $2MM buildings just sold on my block on 9th St. in Park Slope at asking price. No slowdown over here.
We’re in the market right now (looking mostly in bed stuy & CH) and it sure doesn’t feel like a slowdown to me