Dog Days for U.S. Housing; Is NYC Next?
The Times is talking doom and gloom about the national housing market after stats were released showing that home prices fell 14.1 percent in March as compared to the same month last year. While primo New York City—Manhattan in particular—has remained mostly immune to the rest of the country’s housing woes, other once-resilient markets are…
The Times is talking doom and gloom about the national housing market after stats were released showing that home prices fell 14.1 percent in March as compared to the same month last year. While primo New York City—Manhattan in particular—has remained mostly immune to the rest of the country’s housing woes, other once-resilient markets are faltering. Seattle, for example, has only started posting a huge rise in unsold inventory. Some say the housing market hangover could last for another couple years. It’s like eating beyond your stomach’s capacity, said Ronald J. Peltier, the chief executive of Home Services of America, which owns real estate brokerage firms across the country. We have huge indigestion. According to an article in the Observer, though, New York City may yet have to reach for the Mylanta: Recent rises in inflation (the price of a six pack of craft beer is up $1!) and crime, coupled with lots of job losses, could very well mean the worst is yet to come.
In Housing, the Strong Turn Weak [NY Times]
Lead Indicators? The Price of Beer, Hurricane Season [NY Observer]
Photo by bburke782.
If you think prices aren’t coming down, take a look at this website http://www.natefind.com/results.php?low=&high=&location=reduced+brooklyn&refine
every week the list grows exponentially.
It’s not the end of the world that prices are/will come down – it’s a GOOD thing – will allow normal people to buy in their beloved brooklyn neighborhoods that they have been renting in for years. Even though I bought at the VERY peak of the market (boo hoo) I am actually thrilled that prices are coming down. There are three brownstones on my block – 1.2, 1.25 and 999,000 respectively and none of them are selling yet. If all continues at the same pace, they’ll come down and my friends will be able to buy on my block…
Trends that can’t go on forever — do.
Just because Park Slope prices are out of line with construction costs and comparable rentals doesn’t mean they are coming down. More expensive condos were put on sale last year than ever before and some of them sold, so REBNY shows prices and sales are still going up. Just wait until there are more sales on 1 PP — then the stats will really show an increase in prices.
No need to worry about lower NYC incomes. The Irish will just cash out from their boom and buy here. Just like the Japanese did in the 1980s. NYC is different and this year is unique.
10:48 and 10:49 You are so right nobody wants to say they were wrong. This market will be strong forever because it is after all NYC.
As Seattle tanks, the sellers cashing out there will buy in Kensington. Wake up and smell the coffee — prices are going up.
Um….43 condos were sold in Park Slope in April 2008.
15 in April 2007.
And you REALLY think that’s the sign of the end of the world. Especially since you’ve been predicting the TOP was in 2005.
Even if next year, only 15 condos sold in Park Slope, we’d still be doing better than what most people here say was the top.
Brooklyn prices were UP 4%. Do you know what that means? The rest of the country went down 14% but Brooklyn and Manhattan are still going up. So all these years you all have been saying don’t buy, don’t buy, the owners are still seeing appreciation.
You doom and gloom people are just so funny. You’ll never admit you are wrong, will you. Even now TWO FULL YEARS LATER and prices are still going up, as are sales.
It’s ridiculous.
Dave:
At the peak of the 1980s boom, it cost LESS per month to pay a mortgage than to rent a comparable apartment, even before the tax subsidy. Today it costs almost double in the prime neighborhoods, 50% more in the marginal ones. And of course that includes the lower interest rates (and doesn’t take into account that the tax subsidy gets relatively smaller as prices exceed $1m). Nor does it count the likely capital depreciation as prices return to fundamentals.
So why are low interest rates (and the tanking dollar, tanking employment market, etc) going to save the bubble?
9:23 Inventory low???? Look at all the new builings out there that are less than half sold after a year! Inventory for affordable housing is low — plenty of $600K one-bedrooms or $1MM+ 2-bedrooms.
I have friends in Seattle who used to also say “Seattle is unique — between its tech, aerospace, and educated population, plus its bounded in by water so you can’t just expand outwards, that’s why seattle wouldn’t decline — well, looks like they were wrong. And the “unique” argument is wrong in NY also. NYC declined a lot in the late 80’s and it was “unique” then too. It’s just not immune from market forces.
“fundamentals are rock solid” — yup. Purchase prices are more than twice as expensive as long term trends relative to rents, incomes and construction costs. That’s about as good a predictor of future appreciation as you can get. Manhattan’s inventory is double a year ago, but that means that more people will be moving to Brooklyn as it becomes more attractive relative to Manhattan. If only the media didn’t report the news the market would do just fine.