(Most) Brooklyn Prices Continued to Rise in Third Quarter
Appraisal firm HMS Associates released some numbers about the Brooklyn market yesterday that looked quite bullish on the surface but were deserving of a large asterisk: The third quarter report, which show that the average sales price rose 12% over the previous quarter, purposefully omitted data from Bedford Stuyvesant, East New York and Brownsville, where…
Appraisal firm HMS Associates released some numbers about the Brooklyn market yesterday that looked quite bullish on the surface but were deserving of a large asterisk: The third quarter report, which show that the average sales price rose 12% over the previous quarter, purposefully omitted data from Bedford Stuyvesant, East New York and Brownsville, where the sales volume fell a precipitous 50 percent over the last three months. For the sixteen neighborhoods the study did cover, there was plenty of some good news to be found. Year-over-year single family homes and co-ops rose 20% and 32%, respectively, while condo prices fell by 2.9%. Sales volume, while up in Greenpoint and Clinton Hill, fell 36% on average across the surveyed portion of the borough. According to Crain’s, HMS brass says the drop “points to unwillingness on the part of sellers to drop prices, combined with buyers willing to wait for better deals.” Comment: We’d expect this divergence between older homes and new condos to continue, if not worsen, as more condos come to market.
Brooklyn Home Prices Up in Third Quarter [Crain’s]
Please take the time to read this story. There are BIG impairments to Mortgage Backed Securities.
If Banks have mark to price, we are in big trouble.
Folks, it’s bad out there. Look at the stories in the MSM.
http://online.wsj.com/article/SB119214581308956665.html?mod=hpp_us_whats_news
The What
Someday this war is gonna end………
“Um….as condo prices fall (which also has to do with the poor construction) I believe co-op prices will actually rise even further, 11:28.”
Please show me one example of where condo prices are “falling” – and please dont cite brand new buildings that cut asking prices – these are 1st sales and therefore the original price is a relatively abitrary ‘ask’ to discover where the market is. – if you want to have credibility in you assertion please demonstrate an example where 1 condo in a development resold for less then a similar condo in the same or nearby development.
And you are truly deluding yourself if you think that one class of housing (condos) will fall while another one rises (betcha cant ever find an example of this). In fact if condos fall appreciably not only will coops fall but so will brownstones – the best you can hope for is that your housing type will fall relatively less then others. Its all subsets of ONE market.
“Um….as condo prices fall (which also has to do with the poor construction) I believe co-op prices will actually rise even further, 11:28.
They will become more coveted as these aging crappy new condos sit and deteriorate.”
Um, that’s preposterous. The new condos are, at the least livable, due to buiding codes. That means that they are very much in the same housing market as pre-war co-ops. The prices of the two are therefore tied. Let’s imagine that the price of a crappy 2-br condo goes to $300k, and that price accurately reflects the condo’s durability, location, future appreciation, etc. A pre-war next door will have to compete not only on the basis of durability, location, and future appreciation (on which it will have the condo beat), but also with price, and at some point, the price difference will be large enough that it outweighs other factors. No rational economic actor would fail to make the comparison, and over time the market will roughly resemble the behavior of a rational economic actor.
This is pretty basic economics.
“Um….as condo prices fall (which also has to do with the poor construction) I believe co-op prices will actually rise even further, 11:28.”
Sorry, but that doesn’t make the slightest bit of sense.
I have noticed recently that there are less open houses around Clinton Hill, but I think this is due to the decrease in availability. It seems like a lot of property was picked up by newbies during the early Summer.
Co-ops will go down with condos in the next 5 years. They did so before and they will do so again. Prewar will only be ‘the last skydiver to jump out of the plane’. It may land on a building or a tree but it will still jump. Mark my words.
Um….as condo prices fall (which also has to do with the poor construction) I believe co-op prices will actually rise even further, 11:28.
They will become more coveted as these aging crappy new condos sit and deteriorate.
Pre-War will be making a huge comeback in the next 5 years. Mark my words.
It seems that if condo prices continue to fall, there’s no way that won’t drag down co-op prices and even home prices. Yes, some or even many people may prefer houses or pre-war co-op buildings, but if it becomes that much less expensive to buy a new condo, then demand for the more expensive product will inevitably slip.
“Which one is it?”
The latter. Tragically, there’s still many buyers and recent owners out there that think NYC real estate only goes up. They wouldn’t sell at today’s prices even if they could because they just bought. They’re waiting for further appreciation. If the market succombs to gravity (recession and layoffs) and the consensus of owners understands this, there will be lucrative opportunities in sign-making.
I remember during the euphoric times of ’04-’05 when many listings had no external “For Sale” signs out front, just classified ads in the Times. That has changed.