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….!
I haz, you’re exactly the kind of proud, caring and thoughtful poster to whom I was referring. Owners and renters are in this together and I also take no pleasure in watching anyone suffer in trying to find a home in which they can be happy, whether they rent or buy. I never understood why either group would wish harm on or disparage the other. Whatever works for you is your business.
Sebb: Happy renter here. As you know, I sold last year and started renting. I have probably already gotten a discount of $100,000 on whatever property I will eventually buy. Why on Earth would I be bitter about making an extra $8,333 a month (completely tax free)? And in the meantime I have been sending much less cash out the door on my rent than I would on a mortgage for a comparable apartment.
I would guess I will shave another $200,000 of the price of my future home in the next 18 months or so.
le (happy renter) chacal
gkw—I am right there with you in being nervous about buying a house as the shit hits the fan, but I do think that you are imagining a very extreme worst case scenario above. Cuts in police force would be a measure of absolute last resort, as would cuts in subway service. Not saying things aren’t going to be tough but I do believe you have spelled out a doomsday scenario that is unlikely to transpire.
I am not at all surprised about the bubble popping and was one of those criticizing people on this blog who lived in the fantasy world that NYC prices wouldn’t come down (I grew up here and saw my family lose lots of money in late 80s real estate debacle) – but unfortunately bought one month before subprime crisis, so am feeling somewhat panicked. Just praying that hollywood is able to chug along ok – spouse works in movies and is main breadwinner. agghhhhhh.
There are so many things that will make Brooklyn’s prices drop – besides Manhattan prices dropping which will create a huge outflux from Brooklyn- but also HUGE decline in city’s tax revenue will mean cuts in everything – and cuts in subway service will make Brooklyn MUCH less attractive. Not to mention cuts in police force so crime will go up, and cuts in public schools so more people will flee to suburbs where property tax revenue streams are less vulnerable to downturns.
I would actually be so happy about all of this if I hadn’t F*%&$!g bought a GOD*^%$&$*ed house right before the s*&^%! hit the fan. Porca miseria.
How far could a 1-bedroom in Brooklyn Heights realistically drop? I am ready to buy my first place, somewhere in the 400K range. I have cash to buy in full and would like to stop feeling like I’m wasting money on rent each month. Any advice?
I HAZ–so there with you about being a human being. It feels like some people here are getting there jollies from other people’s struggles. DOW, you in particular seem to take an almost sadistic glee in the notion of real estate devaluation. Where does this come from?
i disagree: Figures are from the most recent Case-Shiller report, released yesterday, and which includes figures through the end of July of this year (thus the most recent turmoil has not been reflected).
NY peaked at 216% above January 2000, whereas Phoenix and Miami were up 227% and 280% respectively (Miami experienced the greatest increase).
It is true that the volatility in those areas has been greater than what NY saw, but 600 – 800k for a 1 bedroom is simply not sustainable.
I’m an owner, but I’ve always told people I thought renting was a very good idea. But,the rental inventory in Brooklyn is pretty bad compared to Manhattan. For renters who want to buy, I don’t suggest waiting for things to come in 30%, they may not make it there.
I want to know which brownstone it was that was reduced in PS. Is some overzealous owner/real estate agent an indicator of a bubble bursting when they finally lower their brownstone to a reasonable price after it doesn’t sell for the good part of a year?