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.
I don’t mean to miscategorize myself … the amount that my fiancee and I can afford to borrow based on our combined salaries is plenty enough that we should be able to afford to own something. And when I say “can afford” I mean “can afford” — we know exactly how much we are able to pay per month. During the bubble years we’d have been easily approved for well over a million; we’re just not interested in stretching like that.
I’m not entitled to a home in prime brownstone Brooklyn … but that’s where I want to live. So yes, I’m hoping prices come down there. I’m not expecting to buy a brownstone in north slope for $400k or anything crazy like that. But $600k for a fixer-upper in a non-historic district that’s not an hour away from the city? Yeh, I could handle that. I don’t know if that’s realistic, but a guy can hope.
Z – I think both things happened. That is, some people with modest incomes stretched to buy properties they couldn’t afford (and also, some people with handsome incomes stretched, took on huge mortgages and are now losing their jobs). Others did not buy. Yes, there are tons of other neighborhoods, and while obviously, everyone is not entitled to a 4-story brownstone with detail in Park Slope (for example), I don’t think it’s wrong for a first time buyer to aspire to live in PS period or other “prime” neighborhoods (and arguably, even the fringes of the prime hoods, which are hardly prime i.e. 14th st bet 4/5 Ave, shot up unbelievably of late as per recent HOTD that sold for close to 2 million). We all make our individual choices/trade-offs re: budget/space/neighborhood (and all that entails in terms of commute/schools/amenities/community etc.). But I do think the bubble years altered things beyond the norm of NYC being expensive overall. I speak as someone, mind you, who benefited from the bubble years, and was able to buy in prime Brooklyn before things got totally insane, but it saddened me to see, for example, so many families at my son’s school priced out – these are people who’ve rented for many years and become very invested in the community, had worked hard and saved, and saw property values shoot up so fast they were priced out. Yes, they could move and buy elsewhere, far away, but that would mean deracinating themselves from a community/school/friends who they’d become very close to in all the years they’d rented. I hope some of these folks can now have a shot at home ownership – perhaps not in the exact location they want to be in, but not so far away that they have to totally uproot their lives.
Please don’t nobody listen to me. Im off the meds and don’t know what I’m saying.
I seen the Asshat and it is me. Lookie here and sing wit me;
I’m a little Asshat
Short and stouts
Here is my handle
Here is my spout
When I get all steamed up
I just shout
Tip me over and pour me out
RIP What
The What
Someday this war is gonna end…..
“While many potential sellers may panic at this prospect, I’m not quite sure why unless they unwisely used their home as an ATM, or bought with an intention to flip fast. The vast majority of owners who have owned for more than 3-5 years should do fine.”
I will be prudent (thus maintain my prediction of a borough-wide 25 to 50 percent price decline) and assume that the majority of sellers have a HELOC around their neck that has contributed (or will contribute) to their “depth below the water surface”. If not technically, then effectively, as they have probably allocated paper wealth to, or borrowed money from, elsewhere. Hence the panic.
“Idiots came out of the woodwork thinking they would strike ti rich.”
Some people buy houses (or, apartments) so they have a place to live. Some people like to own their place, as opposed to rent from a landlord. Not everyone buys property to get rich. You sound like someone who likes to rent. I’ve done both, and can see the benefits (and disadvantages) of both.
What – wrong. People need to be taught how to manage their finances, becuase apparently its not inherent.
miss muffett, you need to make up your mind about what happened over the past five years. did people with modest incomes stretch to buy expensive properties they couldn’t afford? or were people with modest incomes snubbed by brokers and turned away from buying homes?
the phenomenon you’re describing (working hard but not being able to afford prime real estate) is less a function of the bubble years and more a simple consequence of living in new york city, where real estate always has been and always will be expensive relative to other markets. yes, many people have been priced out of buying properties in prime brownstone brooklyn. but there are plenty of affordable homes available in other parts of brooklyn, in queens, in the bronx, etc. there’s no entitlement to a prime brooklyn home – not for me, not for you, not for anyone.
“I agree with MM, there should also be personal finance classes at school period, its a big gap in the cirriculum.”
WRONG!!! It’s called greed and delusion! This has nothing to do with finance. The period 2002-2007 was know as “The Mutant Asset Bubble”! Idiots came out of the woodwork thinking they would strike ti rich. Easy lending and Hype fueled this anomaly! And now the implosion is well underway now we need to learn how to count??!! Please spare me!!
BTW It will not get better from here in fact it will be very bad. I think people should get their heads around this thing and deal with it.
RIP Mutant Asset Bubble
The What (I told ya)
Someday this war is gonna end…..
i was referring to montrose — MsM’s comment wasn’t there when i typed mine. sorry for the confusion!