Party Like It's 2005: Bidding Wars Galore
Remember the Times article last week about the reinvigorated real estate market in New York? Well, there may have been something to it. We’ve caught wind of a couple of bidding wars currently underway that certainly show that the demand side of the equation is strong. First up: A 1,350-square-foot, top-floor co-op at 235 Lincoln…
Remember the Times article last week about the reinvigorated real estate market in New York? Well, there may have been something to it. We’ve caught wind of a couple of bidding wars currently underway that certainly show that the demand side of the equation is strong. First up: A 1,350-square-foot, top-floor co-op at 235 Lincoln Place. The first showing on Sunday generated eight bids, six of them over the asking price of $795,000. (Of course, another conclusion could be simply that it was just priced too low.) Meanwhile, over at 218 Greene Avenue (which we discussed last week), the price was jacked almost 30 percent over the weekend. After it was listed at $650,000 on Wednesday, we hear that offers of up to $825,000 rolled in, prompting a swift price increase of the asking price to $850,000. How psyched is the owner. Guess the POS at 220 Greene was not much a deterrent after all.
235 Lincoln Place (#5761) [Warren Lewis] GMAP
218 Greene Avenue [Corcoran] GMAP
NYC is simply not successful enough yet in solving quality-of-life issues. The schools suck (with a few exceptions in neighborhoods now too expensive for even middle and upper middle class people, to buy into); we’re now officially considered the noisiest city in the whole world (we beat out Tokyo and Hong Kong); and the infrastructure is not sufficient to support the growing population. There was a recent news item about a conference on NYC and the growing population, and the experts did NOT have positive things to say about what it will be like to live in this city. In fact they said it would be miserable. Everyone needs to work on improving the city for everybody. No more “My neighborhood is fine, so I don’t care what happens in the rest of the city.”
um, the chinese stock market just went down 9% — and the american market just dropped about 130 points. let’s revisit next week.
New York City Unemployment rate = a little over 4% (that’s about a 30 year low). You can still get a mortgage at around 6.5%. Those are pretty good fundamentals to support real estate values.
Greenspan’s talk of a possible recession coupled with the recent projections of the sub-prime market defaulting has caused a strong flow of funds into T-bills.
This is driving yields down which will result in mortgage rates for prime borrowers dropping as well.
The interest rate/economy relationship and it’s effect on housing prices is tricky. If they economy sucks, rates go down making housing more affordable but since the economy sucks, wages/bonuses are lower and potentially less people will be working.
However, in the short term for those who have the cash to put a nice downpayment down, the lower interest rates will allow them to pay more for a property so we could see a nice uptick in prices.
while i half agree with you 10:40, i would say that those people out there right now snapping up these places…especially those posted on this website are not being bought by wall street types. i think we are at an interesting point in time when there have been a lot of 20 somethings that are now moving into their early 30’s and have lived in new york just long enough (5 -8 years) that they see new york as a really liveable place and one that they might like to call home for a longer period than they once may have thought (this, in and of itself may be in part due to all of the great things we hear sometimes about the nyc real estate market). i think in these past few years, new yorkers like to think of themselves as distancing more and more from the mainstream of american life, thus will do anything possible to settle here, if financially possible.
i think we are seeing (no, i am not a broker) a lot of the younger population looking for a place to buy here as they have not lived here long enough to remember what new york used to be like. i have been here 7 years and have no idea what the horrible days of new york used to be like…i remember 5th avenue in park slope being sketchy, but i’m sure that was nothing compared to the 80s and 90s.
this is a great time for new york and i’m not sure any of us know if it will go back to the way it was, but as long as people continue to believe in this city, i do think prices will be steady, if not continue to increase.
disenchanted:
It is simple supply and demand.
Good post 10:40. There are no equity investors or buyers in the residential real estate market. People buy houses based upon what they can afford on a monthly basis. Income demogrpahics are key to residential RE, as are mortgage interest rates.
As for the stock market, let’s not forget there has NOT been a total recovery from the 2000/01 recession.
On an inflation adjusted basis, the major stock indexes are still down more than 10-15% from their 2000 highs.
Don’t believe the banksters’ inflation game.
I started coming to this website over a year ago and really enjoyed the informative conversations that took place. However, once the market started to decline, I found many people in this site to be rather bull-headed and close-minded to the thought that the market might go down. Once the market did proceed down, these individuals continued to state Brooklyn was unique, and would not be affected my the national market. Many arguments were clearly based on passion and not any historical data. Now, at the first sign of a potential increase in the market, these same people champion the amazing new york real estate market. While I concede that this might be the start of a new upward cycle, I have my doubts. First off, New York real estate prices are not supported by the average salary for a New York City resident. Yes, Wall Street bonuses bring in revenue to the City’s real estate market, but 5-10% of the population (and that is being generous) can not maintain an entire market on its own. Next, the same economic factures that created the slowdown are still present (and are increasing), at the end of the year, many thought interest rates would be lowered by the Fed; however, inflation indicators have increased and it now looks like interest rates will be increased. the economy is slowing, and Greenspan even discussed the possibility of a recession. the only inidcator that was showing strength was the stock market; oh yeah, china’s market feel almost 9% yesterday, and our market is down as a result. I hope that the market does increase, and I am not all gloom and doom as some have been (probably because they had an interest in a declining market); however, I refuse to jump on the strong market theory presented by so many on this web site without a strong rational argument to support it. And please don’t respond with the ignorant and naive response that it is simple supply and demand, because that is like looking at a quadratic equation, which gives the result of four, and explaining the computation as 2 + 2= 4.
wow. i’m stunned that a vacant lot is going for as much as 2 and 3 family homes were going for 2-3 years ago.