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]
The prices may slow down but they ain’t going back down, especially for choice properties. In the 15 years since I bought my brownstone I have seen the birth of BAM, Prospect Park blossom, The Brooklyn Museum renovation, Public Schools with waiting lists to get in. World class restuarants who deliver to your door. My house could loose $1.3 million in todays market and I would still be ahead.
Does anyone know the % of recent (last 5 yrs.) Brooklyn brownstone purchases/refi’s were with exotic loans?
wft: Homeowners are going to get margin calls in 3-5 years when their ARMs start floating and they can’t refinance or sell. The same goes for interest-only loans in 10 years.
In the stock bubble, the biggest losers were those with fat 401ks and money to play the market. The people who will lose in the housing crash are largely middle and working class first-time buyers who are taking extremely risky loans that didn’t exist 10 years ago.
You can also throw divorce into the mix. A large portion of the couples buying right now are likely to split. Imagine going through a divorce when your biggest asset can’t be sold because it’s really a liability, but neither party can hold down the mortgage alone.
Since many buyers are putting under 20% down and paying next to nothing into their principal, they’re essentially renting from the lender. So, if we see the market drop and a lot of defaults, major lenders are going to be stuck with a lot of property they can’t move without a substantial loss. The buyers will end up losing their downpayment and their credit rating will be ruined. The lenders will probably get bailed out by taxpayers, depending on how much the government props up Fannnie Mae.
It’s going to get ugly out there.
this thread is funny. I particularly liked the idiots at 1:29, 1:22, 1:10, 12:31 and 12:03 – each of you is a real “mentsch.” Where would the world be without you?
Brownstoner just seems to get classier and classier every day. It’s almost as though someone opened a ‘virtual trailer park’ right next to bstoner.wpengine.com.
The upstairs bathroom in my brownstone is worth more than your life savings, and that will never change because Brooklyn is infallible.
Coming at you from Florida things are getting bad down in Miami it looks like there is not an investor left in the whole city. values will start to drop big time down here in the next 2 years. The amount of listings is thru the roof and real estate agents here and around the country need to start looking for new jobs. The low wage imigrant workers are in big trouble to.
“Its rather obvious to everyone that if you bought more than 8 years ago your fine so quit you’re crowing..”
CAW! CAW! CAWWWW!
This conversation is why HedgeStreet started their binary options on NYC housing prices.