Gloom And Doom for RE Outside of NYC
Fortune Magazine is ratcheting up the real estate bubble rhetoric with several stories on the topic: We’re not forecasting a nationwide housing collapse. For one thing, the vast expanse of America between the coasts was never touched by real estate mania and is in no danger of a meltdown. And even some overheated markets -…
Fortune Magazine is ratcheting up the real estate bubble rhetoric with several stories on the topic:
We’re not forecasting a nationwide housing collapse. For one thing, the vast expanse of America between the coasts was never touched by real estate mania and is in no danger of a meltdown. And even some overheated markets – including Manhattan, Los Angeles and California’s Orange County – are still simmering. But things are suddenly looking very chilly indeed in four coastal cities – Boston, Washington, Miami and San Diego – as well as three Western boomtowns: Phoenix, Las Vegas and Sacramento. So far this year, monthly sales have fallen 11 percent to 25 percent in Miami, Boston, northern Virginia and San Diego, according to local housing experts.
This is an interesting back drop for the anecdotal evidence we’ve been hearing that things in Brooklyn have been picking up a bit in recent weeks. Maybe it’s just a seasonal pick-up.
Welcome to the Dead Zone [Fortune]
Yente, in my opinion, the constant bickering between the PLG people and their critics has lowered the level of dialogue on this blog considerably. You aren’t the only one who has noticed the change.
Can you folks that keep insisting that real estate prices run in cycles cite another down period besides late 80-early 90’s that NYC metro prices declined? Or does that one downperiod predetermine the future of prices from now on?
Using term bubble is misleading. About only way your home here could suddenly/ever become almost worthless is something like Chernobyl. Comparing to dot-com bust is nonsense – people were buying something with no real underlying value – essentially gambling.
I will gladly confess I have no data. But I was around for the slump and ever since, and I’m just making an educated guess that if *the majority of homeowners* at the time were forced to sell at a loss, I would have met, oh, like one at least. I haven’t; don’t even know anecdotally. (I did have a landlord who sublet to me because his mortgage was underwater; later, after I bought elsewhere, he sold at a profit.) What I do know are people who sold willingly and traded up to bigger homes at the time, and baby boomers who just stayed living where they were and now live in $2M houses on middle-class salaries, their mortgages paid and then some by tenants. They say the average person moves once every 7 years, but that includes all the people who are moving willingly and could choose not to if it mean taking a loss.
Maybe I’m wrong. Maybe I never met any of the unlucky people because they left the NYC area to live as hoboes or to swell the enormous shantytowns of dispossessed homeowners that sprang up all along the east coast from 1989 to 1995, where people in rags fed their children boiled shoes from tincans. If so, you’re welcome to prrove me wrong.
Seriously, though, I actually believe prices will drop in NYC again, how much I don’t know. And some people will be hurt IF they have to move for jobs and IF they just bought recently. But that’s a slice of a slice — some people will also get cancer or get hit by trucks. Otherwise, nobody who has any business buying — who can afford their home and is not taking one of those BS loans or using their house as an ATM — has much to worry about in the long run, which is the only run that matters. The stupid people will get what they deserve, but this idea of the mass ruin of homebuyers just seems like an overblown, and kind of sad, fantasy.
Smug,
Got data? How can you infer that you’re right about the majority?
As usual in these debates it’s rare to hear from a non-owner who thinks the market will continue to go up (or even rise more slowly) while owners seem intent on assuring one another that everything’s going to be OK.
Vested interests passing themselves off as informed opinions!
You know, 12:03’s comment was pretty obnoxious, but some people’s responses are truly disgusting.
Yeah, right Mr. Smug. Seems like that’s what everyone says…right before they lose big time.
“03:11 PM,
Good. You bought at the bottom of the last cycle. Was your purchase price higher than it was a few years before that? I doubt it. What about those who bought at the top of this cycle?…”
What about the people who bought at the top of the cycle before 3:11 PM? By the time he bought, they were in the hole. And now? Those who didn’t have to sell in the meantime — the great majority — are richer than Croesus, and you can bet they don’t care about not having waited years so they could buy when 3:11 did.
You’re totally right that prices can go down, but for anyone who’s not stretching themselves foolishly it should not matter. People need to stop thinking of personal real estate like the stock market.
03:11 PM,
Good. You bought at the bottom of the last cycle. Was your purchase price higher than it was a few years before that? I doubt it. What about those who bought at the top of this cycle?
Everyone,
Where are the numbers that show Brooklyn is different?