Elliman: Brooklyn Market Improved in 2nd Quarter But...
Sales volume in Brooklyn leapt 20.4 percent between the first quarter and second quarter of 2009 and the median price of co-ops and condos ticked up 2.9 percent, according to a report out this morning from Prudential Douglas Elliman. “It suggests there was pent-up demand from unusually low activity,” said Jonathan Miller, CEO of real…
Sales volume in Brooklyn leapt 20.4 percent between the first quarter and second quarter of 2009 and the median price of co-ops and condos ticked up 2.9 percent, according to a report out this morning from Prudential Douglas Elliman. “It suggests there was pent-up demand from unusually low activity,” said Jonathan Miller, CEO of real estate appraiser Miller Samuel, which compiled the report for Prudential Douglas Elliman. Before everyone breaks out the champagne and declares the real estate market in recovery, though, the report also notes that volume was off 29.7 percent versus a year earlier. Prices were also down dramatically from a year earlier; for example, the average price of a one- to three-family home in Brownstone Brooklyn fell 15.9 percent. “Unemployment is still rising, credit has not loosened and we still have a very weak economic environment,” Miller said. Click on chart above for larger view.
Brooklyn Market Overview 2Q 2009 [Elliman]
Home sales in Brooklyn, Queens rise as prices tumble [NY Daily News]
Glimmer of Hope for Brooklyn Market [NY Post]
“The days of renting out an apartment are numbered?”
That’s not what he said, Kris. He said “offset an inflated purchase”. There are already a ton of empty apatments in NYC. Count the lights on at night in ORO and Forte. Your vacancy rates are not convincing. NYC RE will take a massive bath.
***Bid half off peak comps***
Vacancy rate for 2008 was less than 3%. A vacancy rate of less than 5% qualifies as a “housing emergency” and it has been under 5% for as long as they have kept track of these things – since 1965.
http://www.nyc.gov/html/hpd/html/pr/vacancy.shtml
The days of renting out an apartment are numbered? Really? Are there suddenly going to be a ton of empty apartments in NYC?
Rent is a cash business, it shows clearly what people are earning, not borrowing. The NYT shows NY with 8% unemployment and rising. Some neighborhoods will fare better than others, but the days of assuming you can offset an inflated purchase price by renting the space out are numbered.
BrickOven, I’m figuring $800,000 for a townhouse with four floors and rent of $2,000 per floor or $1.3 million for a townhouse with four floors and $3,000 per floor (for a large townhouse of 4,000 sf or more).
…until next century.
BHO, you’re hilarious!
Petebklyn – look at anything that closed in the last 3 months on streeteasy and compare to the original listing prices. 20% down at least in good neighborhoods like park slope, cobble hill, etc. Iffy places fell more. Even seller brokers tell you upfront that prices are very negotiable.
“If you include the paper loss then you are not comparing apples to apples, as well as ascribing a hypothetical future value to the property.”
Huh, chicken? It’d be a real loss. What you walk away with after closing near bottom (nothing or even worse, a debt) minus down payment near peak (cash in) would be a real loss that you would divide by months of ownership and add to the average montly nut you paid. Big, fat, juicy and shiney apple compared to the rental apple.
What’s all this talk about opportunity cost? You’re better off in cash and/or commodities than RE. Massive inflation coming but not for RE (food, energy, etc.).
“I disagree, BHO. There ARE places where you can buy for less than renting. Harlem, for one, as I already mentioned. On some places up there, mortgage + maintenance = less than rent.”
You’re not including loss of downpayment divided my months between buy/sell as described above. If you are, please cite a listing and a comparable rental. The inevitable loss is my prediction of course. Prices will rebound but nowhere near the recent peak in the dollars of that year (i.e. inflation-adjusted terms) until next century, another prediction.
***Bid half off peak comps***
I disagree, BHO. There ARE places where you can buy for less than renting. Harlem, for one, as I already mentioned. On some places up there, mortgage + maintenance = less than rent.
Why is the loss “inevitable”? I presume you are saying that the buyer will definitely sell the place for less than they paid. Do you think prices are going to keep falling forever? I am inclined to agree that prices will continue to fall for a while, but not forever.
Also, Chicken: maintenance on a co-op includes insurance.