Has the Buyers' Market Come to Brooklyn? Duh.
HMS Associates released some dismal, but not surprising news yesterday: Average Brooklyn home prices dropped two percent to $695,285 in Q3 of 2008 (from $708,457 in 2007), as opposed to a three percent rise in the first quarter and an eight percent rise in the second; we had one percent more sales (from 988 to…
HMS Associates released some dismal, but not surprising news yesterday: Average Brooklyn home prices dropped two percent to $695,285 in Q3 of 2008 (from $708,457 in 2007), as opposed to a three percent rise in the first quarter and an eight percent rise in the second; we had one percent more sales (from 988 to 999). Now for more not-very-surprising neighborhood breakdowns: prices were up in Brooklyn Heights and Prospect Heights and down in Sheepshead Bay, Greenpoint and Park Slope (well, maybe that’s a wee bit surprising). The number of homes sold went up in Carroll Gardens, Williamsburg and Marine Park and went down in Greenpoint, Fort Greene, and Brooklyn Heights. Bed Stuy, East New York and Brownsville weren’t included; had they been, the average prices would surely have been much lower. Poor Bed-Stuy was recently named by CNN as having one of the highest foreclosure rates in the country. We know our readers are very skeptical of numbers, but the authors of the study say they translate to one thing: a buyers’ market. Agree?
Photo by bondidwhat.
Dow – 10yrs I agree might be a bit short – which is why I said “minimum”; but the mass psycology that creates these bubble/bursts, do seem to reset relatively quickly. It seems like when the ‘leading generation’ moves into retirement, the younger generations are able to then convince themselves that “this time is different” –
Granted this bubble was larger and bigger then many in the past but other huge speculative bubbles have returned in one lifetime (examples include – Florida RE, Stocks (a few times), Gold, and Oil to name a few).
fsrg makes a great point – why would a 50% be so improbable given the rise by over 100% in 5 years?
When the heck did I say I was hoping real estate goes down 50%? I said “drop, baby, drop” and not “drop by 50%, baby, drop by 50%”
THAL – if you love your place, can afford it, and plan to stay for a pretty long time, you’ll be fine. I’m glad you got a deal. As to what will happen in prime Brooklyn, no one knows. Did anyone expect the stock market to tank as far as it has? No one has a crystal ball. What we do know is that prices have more than doubled in the last 5 years in some of the prime areas and the writing has been on the wall for some time that this was unsustainable. Again, I don’t think it’s wrong for a 1st time buyer to look forward to price declines – doing so does not make them a monster that wants “people wiped out”. Hopefully, most buyers, like you, will experience paper losses only. But let’s face it – in every market, there are winners and losers and for years, owners have been the winners. For years, owners have been very excited about this. Now, it’s the buyers who are getting excited. Human nature.
THAL – since prices have appreciated far in excess of 100% over the last 5+yrs, please explain to me why it would be impossible for prices to decline 50%?
I agree with everything fsrg at November 12, 2008 11:30 AM said except for…
“…unless they are prepared to wait 10yrs minimum for prices to come back to anything like the recent past (just like what happened in ’93-’03)”
Again, this is a once in a lifetime boom/bust (legendary housing bubble). You will never see 2008 prices again in 2008 dollars during your lifetime. The “in it for the long haul” argument is dead. If you did not sell before Black October, you will catch an “L”. There are exceptions but this is the rule (yes, Brownstone Brooklyn TM too).
MISS MUFFET
Here is my problem with his statement he is hoping that real estate goes down 50% so he can buy in an area. Everyone knows that real estate needy to correct alittle but some people want people wiped out so they can get a deal of a life time. I just bought a place a few months back and got a discount of about 15% of the appraisal and was pretty excited. Who knows where real estate will go from here probably down a bit but I hate reading people hoping everything forecloses becasue his 25k salary cant afford an apartment. Thats my point.
Here is my question prime brooklyn(B-Heights and Boerum/Cobble Hill) I dont see prices getting smoked that bad. Especially for 1 bd becasue there is a demand for them. Are you telling me that apartments can come down another 50% (YOU ARE DREAMING) ITs a pipe dream.
Montrose, I am afraid the houses being foreclosed on in Brooklyn are ANY houses in Bushwick (and some in Bed Stuy). The vast majority are two families built in 1900. I’ve seen about 40 of them for sale. Most were already wrecked beyond repair ten or more years ago (interior walls destroyed and replaced by a warren of poorly installed sheetrock and Home Depot cheap-o doors). It’s truly depressing. Only a few are Fedders buildings (since there aren’t that many to start with). Just drive through the Bushwick Ave. corridor or anyplace South of Myrtle. You’ll see a lot of for-sale signs and boarded-up houses.
You are absolutely right about how this disaster came to be: Deceptive fly-by-night companies targeted minority first-time homebuyers. You are the first person I’ve heard put it like that. Where can I read/see more about this? It seems to me the media is not covering this adequately — or maybe I am reading the wrong media. Many of these buyers were middle-aged immigrants who did not speak English. Naturally, they wouldn’t know what they were getting into. Also, in New York, where a lawyer is mandatory, the lawyers must have been in the pocket of the mortgage companies. This is like the flipside of redlining, and I can only imagine it’s going to have a devastating effect on these neighborhoods — not to mention it’s already bringing down our entire economy and credit-fueled consumer way of life.
I just pray these people did not lose down payments.
Also, one other note: Every person I run into with a professional job keeps repeating over and over again: Why was I not offered these terms? Guess their credit wasn’t bad enough.
cw…you should be able to find that in prime Bed Stuy. I know of someone selling on Decatur that has not listed yet…let me look into it.