Bank Predicts NYC Market to Fall Another 40 Percent
If a certain bank analyst is to be believed, New York real estate has a long way to go still before reaching bottom. A Time article earlier this week cites a Deutsche Bank report predicting that housing prices in the New York metropolitan area will fall 40 percent from their March levels. The major driver…
If a certain bank analyst is to be believed, New York real estate has a long way to go still before reaching bottom. A Time article earlier this week cites a Deutsche Bank report predicting that housing prices in the New York metropolitan area will fall 40 percent from their March levels. The major driver of the bank’s estimate is an affordability index that shows New York is still relatively a very pricey place to shack up.
New York Home Prices Forecast to Drop 40% [Time]
Photo by tomodea
nsrenter, I feel your pain. the number to watch is not the unemployment rate, it’s the total income in NYC.
“One shuttered store after another along 125th Street means only one thing: Harlem is being hit hard by the recession.”
What, you can do better than this. Let’s try:
All the Asshats and Hipsters who thought Harlem was cool have moved the f*ck out and gone back to Ohio. Therefore the Assraping landlords who thought they could charge 5th Avenue rents in the ‘hood so Starbucks and Ben & Jerry’s could make the Hipsters feel at home are f*cked! 125th Street will revert to the old days! The young ‘uns are coming!
Someday Starbucks is over!
From the article:
“…That’s the forecast of an extensive new report on residential real estate by Deutsche Bank, which calls for home prices in metropolitan New York City (which includes Westchester, northern New Jersey and other nearby areas) to fall 40.6% from the prices that prevailed in March…”
So the over-supply of subdivisions located in the suburban sprawl of NJ are lumped in with Tribeca, West Village, Brooklyn Heights and Park Slope and Deutsche considers such calculations accurate for specific neighborhoods in NYC?
Whatever. Next.
“@ the chicken
With prices at those levels you are also talking about much less of a down payment, possibly a smaller loan amount, and less exposure for the bank.
Posted by: AndYouWillKnowUsbyTheTrailofRenters at June 18, 2009 9:59 AM”
AFFORDABILITY…..$1m apartment, 20% downpayment, 80% mortgage.
Firstly, $200,000 downpayment required. Are there enough people out there with this?
Secondly, $800,000 mortgage at responsible multiples requires at least $230k annual income. As has been discussed on Brownstoner many times, median income in Brooklyn is $55k.
Thirdly, $800,000 mortgage over 30 years @ 6.5% interest = monthly payments of $5,105. Interest only is $4,333/month. Consider the income that you need to afford that and still eat and live the life that you have become accustomed to.
“As someone else mentioned unless rents also tank why would prices go down that much?
Posted by: AndYouWillKnowUsbyTheTrailofRenters at June 18, 2009 9:59 AM”
Rents have fallen. In a normal environment, Renting SHOULD cost more than owning but it doesn’t. Can you name any other business where it costs you LESS to rent than to buy? No, me neither.
Tybur6, think you got me confused for someone else. I open my own doors, lug my own groceries,…. I want to see a correction cause I can’t afford or want to pay these current prices and hence why I post often promoting rent now buy later. would love to see a 40% drop happen over a span of 5 or more yrs. but if it drops that much in a span of 2 or less yrs, all will get spank hard. Hard enough for me to think I, along with alot of people, will be unemployed (btw, I have a regular and regular paying job)
so – just to confirm what they’re actually analyzing – it’s the % drop from Q1 09 to bottom in the median home price for the NY MSA? for another ~40% to a total 51% drop? now, as for the NY MSA includes, wikipedia says: “The 23-county metropolitan area includes ten counties in New York State (those coinciding with the five boroughs of New York City, the two counties of Long Island, and three counties in the lower Hudson Valley); twelve counties in Northern and Central New Jersey; and one county in northeastern Pennsylvania.” Counties listed here: http://en.wikipedia.org/wiki/New_York_metropolitan_area
is this the area they’re analyzing?
ty they are giving people hell trying to refi or canceling HELOC. They dont want to get burned again. Has anybody in here tryed to refi in Brooklyn the past 2 months?
Oh… and I may add… the BANKS will certainly stop offering to finance your retarded purchases.
thanks kannerr — a “risk factor score for negative home
price momentum” makes me wonder if their model is a little over-engineered, and then calibrated to goldman’s back-of-the-envelope result (based on price/income, price/rent etc).
Not fair since I haven’t actually read it.
But as long as it generates a lot of delusional cheerleading on brownstoner, it’s no less fun.