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
wow – even more hatin’ than usual in this thread…
The Almighty has spoken- “Whatever happens in prime Brooklyn, prices can’t fall much below $1.3 million for a four-story where each floor rents for $2,000. But they may not fall much at all, given how concerned parents seem to be about getting their kids into these school zones.” It is not enough to tell this person to visit Craigs list and notice that rents are well belew 1400 dollars a month and still going down. All those nachos and Skittles must have gone to his head.
Lechacal, I agree with all your points, except maybe No. 4.
I see a missed an entire day of poo flinging. What a shame.
I expect that:
1. Prices will decline significantly in new and recent condos, particularly those in fringe areas.
2. Prices will decline an additional moderate amount in prime coops and condos and most single owner properties.
3. Prices will hold up well in the most prime blocks of the best Brooklyn neighborhoods.
4. Inventory, which is currently low, will increase meaningfully in the coming months.
I have put my money where my mouth is.
So late to this party, so much work to do.
Whatever the merits of this report for the large suburban area it covers, it has zero to do with Brooklyn. Subprime areas are already 50% off, prices are already equal to or less than the cost of renting, and investors are already moving in.
Whatever happens in prime Brooklyn, prices can’t fall much below $1.3 million for a four-story where each floor rents for $2,000. But they may not fall much at all, given how concerned parents seem to be about getting their kids into these school zones.
BHO, you have won. Your prize is waiting for you in East New York.
Townhouses are lingering in prime neighborhoods because most banks are being overly conservative when it comes to making jumbo loans these days, even to applicants with great credit and assets. Most people don’t want to (or can’t) pay all/mostly cash for a house, so they’re on the sidelines today in Brownstoner land. The houses are “overpriced” if by that you mean they’re priced above 80% LTV at the conforming limit. At some point the opportunities for making a profit off of solid borrowers will convince more banks to get back into the market and accurately assess the LTV risk, instead of arbitrarily shutting off the spigot at the conforming limit.
ennuiater, that’s exactly what some bears not fully internalizing. if this add’l 40% drop comes in a short time frame, a bunch of us looking to buy will face huge risk that we’re unemployed. if unemployed in this econ, who the heck is thinking about buying a place – ie busy counting to see if have enough $$$ to survive day to day. So I’m praying this 40% drop comes slowly over 5 yrs or so
“I’m hetero and all of this period-detail crap that everyone rants about means nothing to me.”
Blasphemy.
dibs — I think I’m a good example of why your inventory argument doesn’t work. I eventually need 3 bedrooms, and I don’t really care what kind of building it’s in. I might buy a brownstone and rent out a floor, and I might buy a condo in a hi-rise. I’m hetero and all of this period-detail crap that everyone rants about means nothing to me. If one or the other looks like a much better deal, I’m getting it. To me, it’s all one inventory. So if there are a lot of people like me, a reduction in the price of one kind of place is going to pull buyers away from the other one, and they all eventually move up and down together.