Market Pulse: Bullish Words From a Broker
We thought readers would be interested to hear these thoughts on the Brooklyn market that a broker at a major firm shared with us via email a few days ago. The market truly is stronger than ever. It is really nutty in a good way now. There are almost constantly multiple bidders at or above…
We thought readers would be interested to hear these thoughts on the Brooklyn market that a broker at a major firm shared with us via email a few days ago.
The market truly is stronger than ever. It is really nutty in a good way now. There are almost constantly multiple bidders at or above full price now. Things are now routinely selling in a week to 10 days.
Obviously, a broker has a vested interest in perpetuating the perception that the market is strong, but it seems to be consistent with what we’re hearing anecdotally. Does this jibe with what others are seeing out there? Especially interested in hearing from brokers on this one.
Z, you are completely off base on your assessment that a $3000 per month one bedroom rental in Manhattan will cost $750,000.00 to purchase.
Most studios in Manhattan are going for $400-$700,000.00. The one bedroom apartment would probably be closer to $1 million and as That Guy correctly pointed out, you still need to have $200,000.00 lying around somewhere.
In addition, even assuming your numbers are correct, $600 per month difference is a big deal, that means $7200 more income needed after taxes. It would require a major sacrafice to buy something in a rather tenuous market.
You’re right… wow, I can buy for the same price as renting if I put enough down.
Now I just need to find that 150k that I put in my back pocket.
If I did have 150k, the opportunity cost is 7,500 at 5% a year to sink it into a place. That adds an effective 600$ a month cost to the place if it doesn’t appreciate.
I’m just saying I can’t figure out what’s going on, and for the median New York City income, it has to be rough, even for the 75th percentile income. Perhaps I’m just an Ohio boy that isn’t used to 50% of the population making 100k.
Z you’re right, it isn’t 2:1, but it is enough to give me pause. That’s all I’m saying.
FYI… to those who are assuming a place is still on the market after the broker told you it’s not, many times they leave the listing on line until the closing- it may be in contract. I’ve seen this several times. Your perception that it’s still available (and thus your assessment of the market) may be wrong- try calling to find out if it’s actually available before assuming you were lied to.
Condos vs. coops: not all condos are new construction. Mine is in a small 1920’s Park Slope building that was retrofitted. The units are occupied by working professionals. None have a “renter” mentality. It’s well-run and just has less rules and common fees than coops.
On the comments about how only “white” neighborhoods are doing well- I live between 4/5th aves in Park Slope, and the block is very diverse. There are numerous Hispanic, African American, Asian, Caucasian, etc. people, ranging in age- families, elderly, young professionals. And, the market is quite strong in this area. Just sold my condo FSBO in 5 days for asking price.
“I can rent a nice one bedroom in Manhattan for 3k a month, but if I wanted to buy I’d be looking at 5-6k month.”
that’s really not true. a manhattan 1BR comparable in quality to a $3k rental goes for around $750k. put down 20% and you get a $600k mortgage. at 6% that’s around $3,600/month in total (assume maintenance payments and interest deductions are a wash). there’s a gap between renting and buying, sure, but it definitely isn’t a 2:1 ratio.
i agree with the more general point that there are good reasons to rent rather than buy. but the higher cost of buying is often overstated.
The argument by many that th real esatte market cannot go down is rather absurd. The market has had a record increase over the last decade, and yet the increase is not matched by any unedrlying economic data.
Nonetheless, I see many arguments on this site trashing people for saying the market is overvalued or g*d forbid saying the market needs a correction.
This amuses me the most, because it reminds me of many of the same baseless and strong-arm arguments made before the US went to war in Iraq. Also similar are the arguments, which try to scare you into purchasing something, because you won’t be able to afford it in three years. Kind of like stating you need to give up your liberties, because there are people (who we don’t know and can’t identify) out there right now who are planning to hurt us.
Now before anyone gets in a hissy fit, I willingly acknowledge my examples are far different on many levels, including importance. My point is only that the arguments and reasoning for each are extremely similar.
Anonymous 2:19pm. Maybe my statements would be more easily understood if I was looking over my head, but sadly I am not. I actually can afford to buy something. I make a very good salary as a commercial litigation attorney. I just appear to be one of the few people who just because I can afford something doesn’t think the property is worth the asking price.
My opinion is if Bill Gates looks to buy something in Park Slope or fort greene or Prospect Heights, and finds a brownstone he likes, and offers $100 million to buy it that doesn’t make the property worth $100 million.
I don’t know what the median income in Brooklyn is, but 50k salary gets generously 4k a month. Given 2k in home payments a month, on a 6.5% interest rate and 25k down someone can afford 250k apt… There are magic loans out there, but the whole thing just seems prohibitively expensive for the average person. Even the average person making 100k.
If the market starts to require buyers to be making 200k, even as a couple, to afford the bottom of what two people need (a one bedroom) at 50% of income, I think that points to problems.
I can rent a nice one bedroom in Manhattan for 3k a month, but if I wanted to buy I’d be looking at 5-6k month. I’m not sure it’s worth stepping down in quality to take what I consider to be a decent risk in this market. The rent to own ratio for monthlies in Brooklyn are similar, but scaled down from Manhattan.
It’s a tough call as a buyer at the moment, at least for me.
I am a real estate professional. Let me say that the market controls the market.
Arather obviious observation. It’s kind of like how do you lose wight, of course stop eating. Of course. the market has slowed down. outside of this little site
the world says their is a slow down. No more bidding wars, things on market longer, price reductions across the board. now, you can hype a back parlor stock, but you just can’t hype real estate. I might add, that if you already own and aren’t going to swll, move, need money, yur will be fine.Soon it will be a buyer’s market.
11:06, you’re wrong – if you go to union hall this weekend you won’t get a true picture of the asshole magnet certain parts of brooklyn have become, because many of said assholes will be in the hamptons. god bless them.
as for the hot-or-not question – its simple draw an imaginary line around certain neighborhoods that are established, mostly white or heading that way, and a relatively short commute to manhattan, and you’ll find the properties where people are paying more than ask. beyond those hoods, in places like plg, kensington, greenwood/southslope etc, prices are still much, much higher than they were five years ago, but you can bargain with sellers/sponsors, and new condo developers will often pay transfer tax.
there. done.