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– You are consistently obnoxious, angry, bitter, disparaging, and smug about those of us who do not own. Why the vitriol?
I rent, and I do so because I love this city (which is my hometown) and made a choice to stay. In order to own, I need to move. I’ve done the research. That’s the reality of my financial picture. I’m at peace with it. I don’t think owning is a God-given right. This is and always has been a tough city, and while I count myself a success in many many important ways, I don’t make enough to buy a place here. Would you call me bitter? Angry? A fool?
I’m a “make the pie larger and give everyone a bigger piece” kind of person, so I’m actually sorrowful about this whole mess. With the exception of flippers and vampiric developers, I think most people wanted a place to live and call their own and got understandably excited about watching the value of their investment grow. I think a lot of people got played on their way to the American dream. It’s a mess. It’s not the end of the world. For myself, I am not enjoying anyone “get their comeuppance and suck it” or whatever. I feel bad for people who are hurting. That’s called being a human being and and good neighbor. You might want to give it a try. Feels pretty good.
j2: two questions – 1) does the case-shiller data you’re looking at go through 2008? florida and the west already have declined precipitously since 2006. not sure if that affects your data. 2) is there data that suggests that nyc prices historically have been in line with nyc household income?
I’m another bitter renter. I sold a place before moving to Brooklyn and decided to wait on the sidelines for a year or so.
I’m not sure what will happen in the next year or so- no one does. But I do think the credit crunch will go on for awhile, there will be no cheap money. Also NYC will have a lot less money floating around- a lot less bonuses and high financial salaries. With that mix prices are going to go way down. I think a young couple priced out of Manhattan and considered Brooklyn, could probably afford Manhattan soon. I know everyone on this board loves Brooklyn but that was a large buying pool. The long and short is that I will probably look to buy this time next year.
sebb, my guess is lots of owners, including me, post on Brownstoner. And I never found the renters who contribute to the blog bitter or angry. Quite the opposite; the regulars who identify themselves as renters are valuable contributors who seem to really love Brooklyn and be as involved in the community as much as anyone else.
While it is now their time in terms of likely being able to negotiate much lower rents, I do agree with you that if they choose to purchase and are hoping to take advantage of lower home prices, getting mortgage financing is going to be far more difficult now and going forward.
Bitter renter here!
Take a look at the actual Case-Shiller data. January 2000 is the baseline and since then NY property prices have increased over 92%, the highest behind Washington DC. Las Vegas is up 54%, Miami is up 87%, and Phoenix is up 49%. Why is it that you think the NY metro area will not be affected as those other areas are?
Keep in mind these are percentages and not based on absolute dollar amounts. Prices will come down until they are in line with household income.
“But it really doesn’t matter if potential buyers are unable to get a home loan, which is the problem in this market.”
Very true, I’m afraid.
sebb-
” Because renters are the only people on this board who comment.”
Am I the only one here who finds the exact -opposite- to be true?
” Yet the fools who are renters continue to bash NYC.”
Many renters are fools, many are not. Many renters don’t bash NYC, many do. Whats your point?
” After this Bill gets passed tonight you will see the Bottom in 2009.”
I’ll agree with ya there, sebb.
“So is this it, the moment you’ve been dreading or dreaming of?”
Not quite. Although I know prices will fall significantly as this is a once-in-a-lifetime boom/bust like ’29, my moment will come at the closing table. But I am salivating. The bubble burst in 2006. It is denial that has finally burst.
“Yet the fools who are renters continue to bash NYC”
Prices, Sebb. We bash the prices. We are very happy and we love NYC!!! Big shout out to all the renters who waited and saved. Also shout out to all the owners who have swallowed their pride and denial. Good luck selling or holding on, whatever you have to do.
sebb, you sound very bitter. I am a renter and I am pretty happy about this news. The people that should be bitter are potential sellers in this market and home owners that are paying mortages for a home that is worth more than what their home is actually worth.
But it really doesn’t matter if potential buyers are unable to get a home loan, which is the problem in this market.