Buyers Cooling to Brooklyn
The Brooklyn condo market is not longer hot, hot, hot, reports the NY Observer, but just kinda luke warm. Condo sales dropped 11.3% percent in the second quarter, from 778 to 690. “Although prices continued to rise, the average condo sales price increased by only 4.9 percent from the quarter before—$573,060 to $601,280—compared to 8.6…
The Brooklyn condo market is not longer hot, hot, hot, reports the NY Observer, but just kinda luke warm. Condo sales dropped 11.3% percent in the second quarter, from 778 to 690. “Although prices continued to rise, the average condo sales price increased by only 4.9 percent from the quarter before—$573,060 to $601,280—compared to 8.6 percent from the same quarter last year,” they write. So, what’s that mean for you? Fingers crossed, the Wall Street meltdown will result in a buyers’ market, or at least in developers trying very, very hard to please potential customers. As our own Mr. B says in the piece, “Anything that can make a project stand out right now, whether it’s the design or the finishes, that’s more important in a tough market. Some projects seem to still do well, including the Edge and One Brooklyn Bridge Park. As one broker notes, We have seen a slowdown but we haven’t seen it stop.
Hurricane Wall Street Hits the Boroughs [NY Observer]
Williamsburg Bridge, Williamsburg Savings Bank. Photo by Vidiot.
Sorry – never posted before (but read this site all the time) but I can’t resist jumping in on this one.
The Warren Buffett interview is being taken somewhat out of context, I think.
It’s true, he did throw out a one-liner warning about possible “inflation” as a result of the fiscal/monetary consequences from government intervention in the crisis.
However, taken in the larger context of the interview, I think it’s pretty clear he was talking about the same sorts of inflation that we saw a few months ago (e.g., increases in the price of oil, gas and imports as a result of a weakening dollar). Not housing.
Here’s what he actually said (the transcript is available on CNBC’s web site):
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Warren Buffett: “. . . I would say the biggest single cause [of the crisis] was we had an incredible residential real estate bubble. I mean you can go back to tulip bulbs in Holland 400 years ago. The human beings going through combinations of fear and greed and all of that sort of thing, their behavior can lead to bubbles. And it may have had and Internet bubble at one time, you’ve had a farm bubble, farmland bubble in the Midwest which resulted in all kinds of tragedy in the early ’80s. But 300 million Americans, their lending institutions, their government, their media, all believed that house prices were going to go up consistently. And that got billed into a $20 trillion residential home market. Lending was done based on it, and everybody did a lot of foolish things. And people really behaved in a fraudulent way or something, we’ll go back and find the culprits later on. But that really isn’t the problem we have. I mean that’s where it came from, though. We leveraged up and if you have a 20 percent fall in value of a $20 trillion asset, that’s $4 trillion. And when $4 trillion lands — losses land in the wrong part of this economy, it can gum up the whole place.
Charlie Rose: And it continues with respect to the housing market.
Warren Buffett: It continues.
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He then says some other things about the game of musical chairs that has been going on in the U.S. housing market for the last few years and talks about his new favorite expression (the “triple I’s” of any bubble – innovators, immitators and idiots).
Now, smart and reasonable people can differ (and I know that they have frequently differed on this site) as to whether Brownstone Brooklyn is a housing market that is somehow “different” from the larger U.S. housing market (I see both sides of that debate), but to imply that Warren Buffet suggested last night that “in the next couple of years two million dollars for a house will seem like a bargain” . . . with all respect, I don’t think he said anything remotely like that.
I cant get the Buffet interview to play, but no matter – just look at Japan and the US during the Great Depression – DEFLATION not inflation was the issueand you will be hearing much more about it as the economy slows.
Just check out oil – its already flirting to go below $90.
I expect will see below $75 a barrel by the end of the year unless we have unusual weather.
11217- thanks fro posting the W. Buffet interview. Good stuff.
These numbers are for Brooklyn, Santa. Condos don’t sell for 30 million on this side of the bridge. I think 7 million is the highest or something like that.
And when they take the Manhattan numbers, they typically omit 15 Central Park West and the Plaza where the bulk of the 30 million condos are bought so as not to skew the numbers too much…
eh
in manhattan that is
the percent increase is no doubt from the huge amount of $30 million dollar condos on the market.
even if you had a shitload of million dollar condos drop to 800k the percentage would still go up with a few 30million dollar places.
Here is the broadcast of Warren Buffet on Charlie Rose last night:
http://www.charlierose.com/shows/2008/10/1/1/an-exclusive-conversation-with-warren-buffett
It’s New York City Survivor:
Let’s start voting people off!!!
Warren Buffet certainly knows about markets and money. He, like most “Captains of Capitalism” believes that the bailout is more of a buy-in. But for those of us on the ground it certainly seems like a bailout. After all it will allow many of these Wall Street loons to keep their jobs and kushy offices. That’s kind of a bailout. As a New Yorker, I understand the importance of keeping these sharks alive, but I wish they wouldn’t lie to us and say it’s about “us” not “them” because it is about them too. They will not be out on the street without jobs, or at least not as many of them. In my opinion they all deserve to lose their jobs and every shred of professional credibility. All the heads and honchos of the tanking firms should be thrown off the island!