Has the Bubble Finally Burst?
The NY Post certainly thinks so. They report that single-family home prices fell in the city 7.4% from July of ’07 to July ’08 (though the number is 16.3% for cities they surveyed overall). They point to a Park Slope brownstone whose price has sunk from $2.8 million in January to $2.35 million now; still…
The NY Post certainly thinks so. They report that single-family home prices fell in the city 7.4% from July of ’07 to July ’08 (though the number is 16.3% for cities they surveyed overall). They point to a Park Slope brownstone whose price has sunk from $2.8 million in January to $2.35 million now; still seems like pretty close to bubble prices to some folks around here. We’ve been seeing prices fall in some new condo projects around town. So is this it, the moment you’ve been dreading or dreaming of?
NY $$-Home Bubble Bursts [NY Post]
Bubble. Photo by Pepa….!
sebb
why so silent since 9:36?
i don’t think Sebb realizes that some people don’t have 50k laying around for a down payment.
also the average renter does not pay $2700 (or anywhere close) a month on they apartment. They live in a multi bedroom apartment and split it. I pay 800 bucks a month because I share an apartment with friends. Thats what most people do.
“After this Bill gets passed tonight you will see the Bottom in 2009.”
No you will not. That’s the problem with this bill. It is futile. The top was created with NO lending standards. The bottom is being created WITH lending standards. Bill or no bill, the pool of qualified buyers will continue to drop significantly because of these stricter standards, Wall St layoffs and the 3-to-1 layoffs related to Wall St. Have you forgotton who dominates the NYC economy? Mark-to-model is done. Securitization fees are done. Wild bonuses are done.
Maybe a bottom on Main St in 2009 but not NYC. It will lag. At any rate, the process is on nobody’s schedule.
BTW, rents will fall too. While you are waiting to buy, bottom feed on all these failing condo projects (or other rentals inevitably affected – inventory, inventory, inventory) for a sweet 2-year lease deal.
serpentor: Depends on a lot of things, like when you signed, what the neighborhood is, whether you bargained well, etc. But assuming your purchase is not unique (which it probably isn’t), my advice would be as follows:
Multiply the price you are about to pay by 20%. Take that number and subtract from it the amount of your deposit. If the resulting number is positive, walk away and start saving again. You will live to buy another day. If it is negative, close.
It will hurt either way. There is no easy answer.
My wife and I both work in fields that have no connection at all to finance. But both of our companies have already started to make big cutbacks–freezing hiring, letting go of part time people, killing projects that are not ‘critical,’ and doing projects inhouse that we had planned on hiring outside vendors for. These changes have a major ripple through other industries that we use–so soon the impact will ripple across all fields.
While our jobs are totally safe–at least for the near future–my wife and I have gone into financial lockdown. We cancelled our winter trip and won’t be buying the new couch we had planned on getting. (Yes, obviously the worst thing for the economy). So I find it hard to imagine that people will decide that now is the time to sign that 1 plus million dollar contract. Those who must buy now will, but the majority of people will decide to hang tight and see how things play out. Which will of course cause prices to drop dramatically.
Also, whoever thinks this sight is mostly renters is wack. It is 98% owners!
Sigh. I don’t think there are that many “bitter renters.” I’m a frustrated renter, looking at a potential closing in two weeks after the sellers dicked us around for months. We’re trying to figure out whether to walk away now or go through with it.
While I think the Case Shiller data captures the overall trends, I think it’s noteworthy that the index includes zero Brooklyn brownstones since they are generally mult-family and the index is for single family. I point that out since Brownstones are persumably the focus of this.
Curious to know what people are seeing the in the rental market right now. Inventory (vacancy) is very low right now, but have to think it’s changing.
As an aside, before I bought my house in 2003, I looked at renting a Brownstone but found that there were hardly ever any for rent. Have people seen any change in this?
Paluka-
” For renters who want to buy, I don’t suggest waiting for things to come in 30%, they may not make it there.”
Are you aware how many condos are about to be dumped on the streets?
30%? I’m thinking 40-50. Give it a year or two.
Wasder – clearly you haven’t been following the news. There is NO WAY NYC will not be cutting all these services – Bloomberg has already asked all the agencies to come up with a plan to cut something like 3-5% of their budget, there was a front page article about subway service being cut – and this was all almost two weeks ago, before the real shit hit the real fan. They are predicting a job loss of 120,000 in the NYC area!!