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….!
setancre: well said. If the people on this Board would understand what happened in most of America with the Mortgage crisis, they would understand the big Difference In most of America and NYC. No one in Nyc that worked as a cashier at Met foods went to Wells Fargo and Pretended to make $300k with a No Doc loan. I believe Many ignorant Southerners and middle Americans are to Blame for this Mortgage mess. Let’s get one thing straight on this board I believe prices will decrease but no more than 15% across most of the city. When you see these price drops from some of the Builders and think WOW prices are really falling around NYC You are actually being Fooled.
Understand this Builders Started with The Highest Asking prices and don’t really care if they lower the price Hundreds Of thousands because they are still Making a huge profit off of the Sale. Look around the world NYC is the 22 Most expensive place on earth to Live . Tell me what place is Better than NYC. NONE
11217–bravo. I also hope that people will use this downturn as a way to put their money where their mouth is and get involved in their communities. There are things that everyone can do to make sure that Brooklyn remains a healthy, diverse, fulfilling place to live. I always appreciate your perspective on these matters so thanks for your post.
gkw—as a news junkie I take exception to the notion that I haven’t been following the news. I understand that the city is facing a budget crisis but my sense is that cuts that you have described would be a last resort measure that I have not seen anyone suggest yet.
DOW–you and I obviously have not always seen eye to eye on everything. But I am not attacking you to ask why I read so much glee from your analysis of the falling housing market. I am asking you a sincere question: do you have concern for the readers on this board who are concerned about precipitous drops in their property values? While this is not the only factor for whether to own a house (the main one being the enjoyment and fulfillment that comes with living in one’s own home) I would like you to express a modicum of human respect for those people who are concerned about their long term financial futures.
I’m happy in my place also regardless of the value. I still pay about 300-500 bucks less per month than it would cost to rent a similar place. If anything I think PS will be even more interesting as more people who have wanted to live there will soon be able to afford it.
The beauty of NYC is the constant change. It certainly felt like it was turning into anytown USA, so I believe this situation will actually be a good thing for NY. All one has to do is look at the vibrancy of Buenos Aires to see how that city is coming back from economic collapse in 2001.
Maybe my dream of having late night shopping restaurants/shopping again in NYC will come true when small business owners realize they need to step it up to compete.
Maybe more people will enjoy life each day and stop watching American Idol if their life depended on it.
Maybe people will realize that we are all in this together and be nicer to each other.
Maybe more people will value relationships with one another, and less people will be lonely in this city.
Maybe the city that never sleeps will stop sleeping so darn much and get out there and party again.
I’m looking forward to the possibility of all these things a lot more than I ever did about a few extra bucks when I sold my apartment.
I think people need to think about what economists call “the next best alternative” or opportunity cost.
A house in an asset, yes, but one that you live in. It therefore provides an additional benefit … namely, not having to pay rent.
Even if my house NEVER appreciates in real terms, as long as I’m living in a big ‘ol townhouse with a backyard for LESS that it would cost me to rent over the same period (after the mortgage tax break and including maintenance, etc.) I’m still AHEAD in terms of lifestyle and finance.
And … say what you want … but since I bought my house a few years ago, rents for a 3 bedroom apartment (not even a whole townhouse) have been waaaay higher than my “ownership costs”.
Now, if rents for a “comparable” place in Park Slope or Manhattan even slip below this “break-even” point, then I’ll worry but with 2 bedroom apartments renting for more than my PRE-TAX mortgage payment, I think all will be ok.
Even factoring in near-term losses on home equity, I don’t think anyone will say that over 5 or more years they expect losses.
two things:
1) the PS brownstone they were talking about was actually in CH or CG. not that it matters, but just to be clear…
2) I bought my home a year ago. It’s my home. I love it. I plan on being there for a long time. So, I’m not terribly concerned with its value now, except, if I get it reappraised, can I get my taxes lowered? (really, I don’t know.)
11217: That’s a classic and completely irrelevant argument. I can rent a home. I don’t need to buy in order to have a roof over my head. DOW brough up David Lereah (one of my favorite real estate cheerleaders), who used to say that all the time. He wrote a really fantastic book in 2005, the title of which was exactly as follows:
“Are You Missing the Real Estate Boom?: Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade – And How to Profit From Them”
http://www.amazon.com/gp/reader/0385514344/ref=sib_dp_pop_fc?ie=UTF8&p=S001#reader-link
You can’t live inside the S&P.
I mean $40,000 of course.