Goldman: NYC Prices Have a Ways to Go
“New York apartment prices are very high relative to the observable fundamentals. Using three alternative yardsticks—price/rent, price/income, and affordability—we find that prices would need to decline by 35%-44% to return to the valuation levels seen in the 1995-1999 period, before the start of the recent boom.” — Goldman Sachs via Curbed
11217, Goldman was one of the few companies to be in a less of a mess than the others. And please, it’s not they are the only ones saying this – there is a veritable drumroll of the same kinds of predictions coming from sources across the spectrum. You yourself have conceded a major correction is in order.
Slopefarm–thanks for the shoutout to those of us who are no longer in the real estate rat race but are instead settling in for the long haul. I can’t tell you how glad I am to be past the buying phase and into the “enjoying my domestic life” phase. I hope we get to raise a glass together some time.
I also think it’s interesting that you are using the words of a Goldman Sachs employee as gospel, Ms. Muffet. A company which was part of the reason things are going the way they are.
No one has idea what’s going to happen. ALL of the predictions have been wrong thus far.
Curbed isn’t really known for attracting the most insightful comments in the world. They are known for ridiculous comments used to attract website traffic. Especially during a faltering real estate market.
Please try to be a little less gullible and naive.
“what about renters with no cash? how will they fare?”
http://en.wikipedia.org/wiki/Skid_Row
11217 is correct on all accounts.
Miss Muffett…1. not everyone in the world Heloc’d. 2. You stated above that even with another 40-50% off, there are huge profits out there (which there are) and 3. I’m saying that the numbers are overwhelingly attractive at these prices. I know, I did this exact thing in 2007. I’d do it in 2008 and in 2009 at current prices.
Don’t offer up one theory as you did at 10:29 and then use something opposite to it to tear apart another one that I put forth.
You’re benched for the rest of the game.
“Long-term owners who bought before the boom (and didn’t use their home as an ATM) will still do just fine.”
Yep.
But DIBS, many of those Manhattan condo owners may not “sop up” the market so quickly for various reasons: 1) they may be in debt if they Heloc’ed too much; 2) they may find it hard to sell their current place, even at a discount; 3) they may, like most buyers now, dig in their heels and demand lower prices. It really is amazing to me how some people continue to try to find reasons why this decline won’t be as big as experts are predicting (interest rates are low, hoods have gentrified, blah blah).
Thanks john…that’s what I was looking for.