Condo Market: You Can't Handle the Truth!
“The truth is that people can’t take the truth,” Robert Levine, the president of RAL Cos., is quoted as saying in a Sun article about how the city’s condo market is (brace yourself!) not as healthy as it once was. The point of the article seems to be that though the press has instilled “fear”…
“The truth is that people can’t take the truth,” Robert Levine, the president of RAL Cos., is quoted as saying in a Sun article about how the city’s condo market is (brace yourself!) not as healthy as it once was. The point of the article seems to be that though the press has instilled “fear” in people (another Levine quote) about the value of real estate as an investment, condos are still worth buying because the city’s market will eventually rebound. Here’s the evidence the story gathers about condo sales slowing: financing is shaky (“As transaction volume dries up, and liquidity remains nonexistent, property values will fall, and banks will begin foreclosures,” say Kevin Comer, the president of Beck Street Capital. “The kid gloves will come off, and it won’t matter if you own property at Fifth Avenue and 58th Street or Williamsburg, the banks will be brutal as they all struggle to survive and avoid Bear Stearns fate. The busted condo deals will be the first to fall given their short term financing.”); a ton of prospective buyers are lowballing offering prices, says one developer, which means inventory isn’t moving unless a sponsor’s willing to make a deal; after buzz fades on a condo that’s just put up listings, sales are languishing, says Gary Malin, the president of Citi Habitats. So wait, what’s the truth that we can’t take? Oh, right—now (or very soon) may be the time to buy. “Now more than ever its location, location and location,” says Beck Street Capital’s Kevin Comer. “Long term, real estate remains a great place to invest capital, especially in New York City, and we are headed for one of the best buying opportunities of my lifetime.” Consider yourself truthified.
Believe It: Condo Sales Slow [NY Sun]
Still from youtube.
quote from the article:
“Sales activity remains strong in Park Slope section of Brooklyn. For example, the Argyle Condominium located on the west side of Fourth Avenue, which many consider the wrong side of the street, and is not in the preferred school district has a sales office on Fifth Avenue has had steady and consistent sales,” Mr. Rutter said. “The average sales price per square foot is $740, and about 60% of the units have been sold with the building’s steel still in process. Another sign of the frothy Park Slope market is that these sales have occurred from floor plans and not from walking the actual units.”
“If a condominium project has been on the market for over 12 months, and there remains units to sell, then those units need to be re-priced as rentals until the next cycle.” This shows how smart Two Trees was that they converted 110 Livingston to rental. It’s a really nice rental building.
BrooklynNative: Small minded thinking? Small minded thinking is blindly assuming that prices will decrease upwards of 20-30% without any salient points to back that up. As someone mentioned on a post yesterday there are people who seem to think that real estate just began in 2000. While that was meant as an insult it also illustrates a point that there has been a secular change in the real estate market that has brought a lot more people to purchase properties rather than paying rent. There will be (and has already been) a cyclical adjustment in real estate prices and there may still be more of a drop to come. There is no way it will be these large double digit increases people are throwing out there. When the previous real estate recessions occurred was the stock market up? How significant was the overbuilding? so on and so forth.
When you look at the Brooklyn market it makes even more sense that the downturn would not be double digits due to the secular shift. People who are renting one bedrooms in Manhattan for $3500+ are more and more realizing that they can own their residence by moving to Brooklyn.
Plus if prices drop 30% we are all totally f—–. Even if you bought your brownstone in 1995 or you are renting. 30% price drop in NYC means the economy/country are completely in the shitter and soon enough it will look like I am Legend. (well some of you do actually think that I guess.)
OK, he has not been right in a decade. You get the point.
10:17 has it really never occurred to you that there just aren’t all that many condos in Brownstone Brooklyn and there never have been? It’s mostly townhouses and coops, that’s what’s out there. Although, there are a hell of lot more condos today than there were 20 years ago.
But you’re looking today and you don’t see that many condos on the market (outside three biggest neighborhoods for condos) so you conclude it must be a good time to buy because the supply of condos is limited. (Of course you seem to think supply is limited because sellers aren’t selling as opposed to the fact that market is comprised of townhouses and coops).
Does that mean it was a good time to buy in 1988 when the real estate market had proven to be remarkably resilient in the face of the 1987 market crash. There were not many condos in Park Slope then. However, I was looking to buy in 91 and I saw a ton of empty coops, because the market turned down in 89, big time. And I guess, you think somehow condos in Brownstone Brooklyn will hold up if the entire market turns down?
Sometimes, people’s small minded logic is just so frustrating to deal with.
1992 was 16 years ago.
that’s a lot closer to 20 than it is to today.
10:22 no reason at all. just my opinion
Soros hasn’t been right in 20 years? Did you hear about that little thing in 1992 perhaps?
10:20 is there a reason we should value your opinion?