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]
“Renting = rent payment + utilities. Owning = interest payment (or opportunity cost of tied-up capital) + maintenance/utilities + insurance…”
But MINUS accumulated equity (unless you expect that the property will eventually be worthless). If you’re going to account for opportunity cost of tied up capital, you’ve got to include that too.
“”if you can buy for less than it would cost to rent a comparable pad…”
Well, ya can’t (don’t forget to amortize the inevitable loss with the monthly nut – loss is cost). Not by prevailing figures.
***Bid half off peak comps***
Posted by: Brownstones Half Off at July 16, 2009 11:34 AM”
While I may agree with you on your ultimate conclusion BHO, I disagree with your calculation. 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.
No, the way to do it is to compare cash to cash. Renting = rent payment + utilities. Owning = interest payment (or opportunity cost of tied-up capital) + maintenance/utilities + insurance. The dynamics at play that determine the preference for renting or owning (at least from a financial perspective) are pretty easy to see.
no, absolutely, I do not agree that prices are down 20% year over year.
The average price of props that sold may be…but the value of any particular condo or house, NO.
Could it go down 20% or more? sure. But I do not see evidence that has happened.
Will it? I don’t know. If I could predict such things I’d have so much money I wouldn’t care.
I keep looking for and asking for this evidence. Show me the condos that sold (new) couple of years ago that now have resold.
I don’t see prices have significantly changed on that evidence. Certainly have not gone up.
Mopar how much do you think it costs to rent a townhouse in Clinton hill?
” I do know that they can’t fall too much further than the cost of renting.”
Mopar, true, but then again rents cannot exceed actual average income, no? It is now obvious that even at the peak many people weren’t living on their income, but income + credit cards. It is equally apparent those days are over. SO over. As What might say: Reality has shoved an I-beam up everybody’s ass. Or something.
Thats fine mopar, except that the cost of renting is also coming down in a bunch of places…
(not Greenpoint of course)
No news here. Just confirmation of what we know: Prices in the fancy parts of Brooklyn have finally started to decline. And Hannible, if you want a foreclosure, come out to my neighborhood.
So, let’s all agree: In all future arguments, average prices throughout Brooklyn are down approximately 20 percent YOY.
‘kay?
I don’t know how long prices will fall for. I do know that they can’t fall too much further than the cost of renting. Some neighborhoods are already there, despite what may SEEM like high-sounding prices to some. Clinton Hill for example.
“I am not by any means saying that buying is always cheaper in the long run.”
I stand corrected. My apologies.
***Bid half off peak comps***
> chipper and upbeat even as things are progessively chopped off?
Yup, that’s the one. “I’ll bite your legs off!”