Home Prices Continue to Slide, and NY's No Exception
The New York region isn’t immune to the housing troubles plaguing the rest of the nation, according to data released yesterday. The Standard & Poor’s/Case-Shiller indexes found that home prices in 20 large metropolitan regions fell 6.1 percent from last October to October ‘07; year-over-year values in New York, meanwhile, dropped 4.1 percent. While the…
The New York region isn’t immune to the housing troubles plaguing the rest of the nation, according to data released yesterday. The Standard & Poor’s/Case-Shiller indexes found that home prices in 20 large metropolitan regions fell 6.1 percent from last October to October ‘07; year-over-year values in New York, meanwhile, dropped 4.1 percent. While the data covers the whole New York region rather than just the five boroughs, an S&P analyst told the Sun that the numbers reflect the city’s changing fortunes. “We track a large area where the homeowners’ livelihood ties back to the New York City economy,” the chairman of the index committee at Standard & Poor’s, David Blitzer, said. “The home prices in New York have been weak, and don’t show signs of a quick turnaround. Several New York analysts, however, believe that closings on high-end properties will buoy the city’s market—closings that are tied to Wall Street bonuses. “For New York City, the wild card will be what happens with Wall Street,” Jonathan Miller, the director of research at Radar Logic, said. “The impact on real estate will be more associated with jobs and bonuses than anything else.”
Home Prices Fell Faster in October [NY Times]
A Bearish Sign for N.Y. Home Prices [NY Sun]
The language on this website is shameful.
Mr. What, would you mind managing to rephrase much of what you write? As I have said in the past, the way in which you couch your arguments robs them of their force. People may enjoy reading angry comments, but I’m sure you could form more cogent arguments without all this swearing.
Anyway, it was amusing that between the holidays when there has been very little reaction to the articles on this website, this one today sparked tempers. Two weeks ago it might have had 200 comments, no? I wonder if that Bloomberg writer will bother picking this one up to do an article…
TheGrammarLady
‘But maybe he needs to shift to a lower price point’
‘lower price point’ is 800K in Crown Heights, Bed Sty???
35% of an income should be going toward housing. To buy an 800K house, one’s income should be 185K.
to buy a $500K house, income should be 120K….Where do you find a house in NYC for that price?
PRICES HAVE GOT TO DROP, so the middle class can afford them!!
The What’s exhaustive research on our behalf, and his braying about his economic expertise are made even more valuable by his facility with such technical language as “fucktards.” A grateful borough thanks you, Mr. What. In the face of such charisma, watch your back, Jim Cramer.
Guest 11:50, (and other thoughtful folks, here), I didn’t mean to come off like a pollyanna broker at an open house (I’m neither one). I understand that the credit markets have tightened–and obviously they needed to. So, of your example of a friend with great credit who was offered a 7.1 jumbo by Wells Fargo and was then shocked by their demand for 30% down–well, that just means your friend won’t be able to buy/borrow as much as he wants to. Which sucks, of course. But maybe he needs to shift to a lower price point. A helluva lot of people should have done that over the past few years, as these foreclosures make obvious.
That doesn’t refute my original argument: Buy a house you intend to live in for a few years, be honest with yourself about whether you can afford the place (which unfortunately Wells Fargo isn’t sure about as regards your friend), keep some savings, and don’t be so stupid as to take a really onerous ARM, and–again, for the millionth time–you will be fine.
I’m not saying prices won’t drop–they might. I’m saying that A) I need a place to live for the long haul, regardless B) I have plenty of confidence that even if prices drop in the short term, they will rebound, and C) I bought comfortably enough that I could make my house payments for five years, easy, if I got fired tomorrow.
So: I’m cautious, maybe to a fault, with my savings and buying habits. I’m also not remotely worried about the markets–unless, say, there’s a total bank run, an atom bomb goes off in Cobble Hill, or the world is invaded by Martians, which appears to be The What’s vision. I’m bullish on my own.
Just wanna weigh in on the upstate thing. I moved from Brooklyn- Upstate, then back to Brooklyn, then decided to make my primary residence Upstate. My Beacon house was under $400k, taxes are around $6000, Metro North is about $300 per month (but I don’t commute) and takes an hour + 15 to GC. Putnam is more $. Homes in Orange Co (like Newburgh) can be had for under $200k, but taxes can be as high as $10k. Well, actually, not for the $200k properties. My brownstone was twice the price of the Beacon home, but I pay less monthly because of the tenants. Yes, I’m confused, but it’s great to be able to go back and forth. Bottom line is…where are you happier?
4:03, put your cash into a CD with 5% yield and you will be better off than buying now.
Re: the foreign buyers who are supposed to prop up the NYC market – foreign buyers are mainly interested in new condo developments (where they have amenities, can easily rent, etc) so I don’t think that will prop up the Bklyn brownstone market very much. Eventually, all those Manhattan coop owners will no longer be able to fetch absurd prices for their properties that they turn around and plough into overpriced Bklyn bronwstones.
As for 3:35, I feel your pain since we too are in the middle class, even at 150+K per year (which, according to this blog, is pretty meager) but luckily we already own a 3BR prewar condo and even if the market goes down, we sold another property recently that is sitting in cash to buy a house. So, we have a budget of 1.3-1.5M for a house and we are sitting tight waiting for prices to soften – even if our condo softens, we can buy more house with our cash. And like everyone is saying, all signs point to, at last, a slowdown and hopefully a return to sanity. I don’t think prices will crash drastically due to demographics (there is more demand and less inventory), but I can certainly imagine things going down 10-20% and some of the really over-reaching properties (i.e. that Betancourt listing bet 4/5, the Townsley & Gaye 14th St bet 4/5 St listing) to come down significantly more, esp as more listings will eventually have to come on the market and ease the inventory crunch…
BrooklynLove – 3:06 here. Real estate speculation isn’t my gig and I’m generally swamped with my job, so short-term RE plays don’t really interest me. As for my other investments, yeah I’ve done fine.
3:35 – it shouldn’t amaze you at all. There are plenty of people who can afford to buy in NY but who (i) may have good rental situations, (ii) think they might have to move in several years and don’t have confidence in the market, or (iii) think that as the market softens, they’ll have more leverage. The point is, there are more and more people backing away from the NYC real estate market right now (that’s locals, not foreigners). Tells you something.
Hey assWhat. Let’s say you’re right and 2008 is going to be a “Fuck You year.” (I must admit, you expressions crack me up.)
Anyhow, why does that make you angry with the posters on this Board? Nobody ever expects a depression to hit. In fact, the only way the economy can get so out of whack as to create a depression is when “irrational exuberance” takes over. The people on this board aren’t the big swinging dicks on Wall Street who have profitted from all the shenanagans. So, let’s say you are right, why direct you’re hostility at us? If you’re so angry with us for not agreeing with you, why do you persist in trying to persuade us? Have you ever considered just how weird you are?