She is sinking by the bow
“Median home price: $455,000 Median income: $63,000 Affordability score: 13.9% In the nation’s largest metropolis, New York, home prices took a steep dive during the quarter, to $455,000 from $500,000 three months earlier. That was not enough to dislodge the city from its rank as the least affordable metro area in the land. Only 13.9%…
“Median home price: $455,000
Median income: $63,000
Affordability score: 13.9%
In the nation’s largest metropolis, New York, home prices took a steep dive during the quarter, to $455,000 from $500,000 three months earlier.
That was not enough to dislodge the city from its rank as the least affordable metro area in the land. Only 13.9% of the homes sold there during the quarter were affordable for median income families, who earned $63,000. That was still a major improvement from two years ago when only 5.1% of homes sold during the fourth quarter of 2006 were affordable.
The good news is that New York households have been barely brushed by the foreclosure crisis so far with only 0.71% receiving some kind of foreclosure filing during 2008.
Housing markets in the New York metro area had held up comparatively well, even after declines started to hit other boom markets hard, but with the financial services industry recording huge losses and shedding jobs, home prices may be in for some steep declines.” Taken from a CNN webpage. Do we need anymore proof that home prices are falling in Brooklyn?
Well think about it 500,000 dollars is doable for a 4 family brownstone considering what your income might be from the rents in optimal conditions but how do you make payments if the asking price for a condo in NYC is or was 550,000 dollars? With a 400,000 dollar morgatge and 500 dollar maintance fee you are looking at a monthly cost 4000 dollars. That means that anyone that is married and earns less than 80,000 dollars a year can not afford to live here. Rents are coming down to the 1000 dollars a month and I think there will be a big rush to rent and that the condo market will sink fast. I also see a big broblem with the local banks because it will mean that banks will have to take a 200-300,000 dollar writedown on every condo they financed. Don’t you think condos should be priced at 200-250,000 dollars instead of 500-550,000? The sooner we get to those prices the quicker we get out of this mess.
I was referring to the last sentence in your 5:54 post, where you claim people think you’re crazy when you want to buy their house at 1990 prices.
~Newsouthsloper did most homeowners bother to look if their renters had enough money to put food on the table or was their main concern to raise rents to follow the “market”?~
I wouldnt know since I rented most of my life and only bought my own place when I had saved enough to afford it.
Your anger at landlords is understandable, but life as not always as simple as you would like to make it out to be.
What makes you think I make offers to sellers? I can not and will not make offers to buy necause there is too much of a price difference between what they are asking and what I want and “can” pay. Newsouthsloper did most homeowners bother to look if their renters had enough money to put food on the table or was their main concern to raise rents to follow the “market”?
Hannible – Be careful what you wish for…
Honestly, a situation where RE prices drop 75% or even 50%would only accompany a severe depression where you are unemployed, your money is worthless and starving desperate people roam the streets.
Unfortunately, you would be in the same boat or worse off, so wishing for dirt cheap real estate in prime areas is wishing for your own demise and the rest of this country along with it.
Dude, you asked why sellers ignore you when you might offer them prices from 20 years ago. The Obama and Bush administrations have just printed trillions of dollars out of thin air. I wouldn’t bet on 75% deflation.
Corolla Bingo! Considering that New York City and its suburbs are a place for the middle=class, please tell me how much have middle class wadges gone up, since the 1990’s? Don’t you think the New York City housing bubble followed the Wall Street Bubble? Think about it many stocks like General Electric, International Paper and many others were worth 40 some dollars a few months ago and now are worth less than 10 dollars. That is a 75% downturn. Do you think the houses in New York are going down by 75%? and if you think they are not going down that much do you think high rents are going to sustain that market?
Your assumption is that there is zero inflation, which you do realize is incorrect. 1990 is roughly the bottom of the last real estate downturn.
On another level, you’re saying that there is no increase in the value of living in New York over almost 20 years. That also seems incorrect, given crime rate changes and the entire gentrification movement, whether you like its results or not.
And a third point is the neighborhood differences in pricing. I once worked at a major RE brokerage (not in sales) and had access to their proprietary database of sales in Manhattan through the mid 80s. It was interesting. Certain neighborhoods weathered the last downturn by simply holding flat, even though peak to bottom the average price went down over 25%. Prime neighborhoods certainly could do the same this time.
Thank you Mopar but what I have a problem with is “comparable properties nearby have also sold for.”. There are some places that were bought by some people ( I would like to call them stupid for lack of better words)for a million this or a million that but the price should have been no more than 300 to 400,000 dollars if interest rates were left at their acceptable levals and not 1 percent so the home price could go to the roof. Home price is one thing and home value is another. I think that you will agree that because of low interest rates the price of the homes in NYC has increased out of control while the home value has not changed since the early 1990’s. Now when you tell someone that you want to buy that home at 1990’s price they think you are crazy.