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
The interesting thing is that DB is revising UPWARDS for NYC:
“In the New York metropolitan area they may drop 40.6 percent from the first quarter to the bottom, the report said, less than Deutsche Bank’s March estimate of 47.4 percent.”
Even then, that’s the AREA not prime NYC.
This report ranks right up there with the NYT’s “Trustafarian” article in terms of substance.
DB said something fairly similar a while back. They are talking about NYC metropolitan area though, which is huge and diverse in pricing.
chicken, that’s still not the article, it’s about the article. So far the only substance is:
Financial firms have cut more than 183,000 jobs in the Americas in the global credit crisis, driving down prices and rents in the New York area.
“banks will be coughing blood, layoffs everyday, big tax hikes to plug growing NYC gov budget shortfalls”
Umm… have you been reading the news for the last year or so…
Banks have been coughing blood, there have been a ton of layoffs, and there has been a lot of activity going on on the tax hiking front (weren’t they trying to tax iTunes purchases a few months ago??).
I’m not happy about it (despite being a renter), but I think there is a long way to the bottom.
LIC gets my vote for neighborhood where prices may come down the most, but the Financial District and DUMBO won’t be far behind.
Once those neighborhoods start dropping down to where their new construction is priced competitively with older stuff in other neighborhoods, people will start buying the cheap new stuff. Then the second wave will be price reductions in the other neighborhoods.
I’ve been look at rentals on Craigslist for the first time since 2007, and I’m seeing a 15-30% reduction in rents across the board compared to two years ago. And a lot more listings.
YouWithTheRidiculousLoginName:
same to you. If NYC is just so great that the prices can’t drop, how do you justify that it got three times greater in the 10 years before 2008?
joe, I’m very familiar with DB, was partially being facetious. Still, I’m sure that their respected research dept had all their clients in cash 10/10/2007, right? lol.
Also they weren’t so bearish on NYC RE when they loaned Macklowe the money to buy seven office buildings, right?
@ 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.
As someone else mentioned unless rents also tank why would prices go down that much?
levtoma put your helmet back on. how do you justify the tripling of prices in 10yrs? are rentals (I assume you mean buying for rental income) any better of an investment than they were in 1998? You sure aren’t making triple the income on them. And what happens when the banks can’t sell units at the prices they supposedly “control”? get ready for a flood of auctions when a few large banks capitulate.