Looking for the Bottom
Ever since the real estate bubble burst and market indicators across the board started plummeting, everyone has wanted to know when the market was going to reach bottom. Well, maybe we’re there, nationally speaking. Dean Baker, of the Center for Economic and Policy Research, thinks so; he told AP via Fox News that “the freefall…
Ever since the real estate bubble burst and market indicators across the board started plummeting, everyone has wanted to know when the market was going to reach bottom. Well, maybe we’re there, nationally speaking. Dean Baker, of the Center for Economic and Policy Research, thinks so; he told AP via Fox News that “the freefall is over.” AP cited several nationwide statistics from the past two weeks: “home resales in June are up 9 percent from January, on a seasonally adjusted basis; sales of new homes have climbed 17 percent during the same period; and construction, while still anemic, has risen almost 20 percent since the beginning of the year.” In the Northeast, “home resales in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled.” It is the amateur statistician, however, that reads too deeply in short-term statistics. The improvements in the market, so far, can only provide hope that the worst is behind us, but economists warn that even if this is the bottom of the barrel, we may stay down there for a while longer.
Welcome to the Bottom [Fox News]
Photo by AvarieRiot
dibs – stock picks? seriously? you’re asking me for stock picks because i think the nyc real estate mkt is going to be down and out for 3-5+ years. dude i’m not outside the range of most credible analysts. jobs and real wages are not going anywhere (up) soon while the the rates outlook doesn’t bode well in any kind of general US recovery in the medium term. then bake in all the other delayed factors that have yet to really take hold here and it don’t lookie too good. i’m not some kind of glenn beck doomsday bunker nut just being realistic with regard to local real estate decision making.
DIBS: Not sure if I follow your persistent interest in the second derivative. I for one don’t want to buy until the first derivative is flat and rising. Second derivative is just predictive of when that might happen.
Cops, firefighters and NYC teachers at top pay, which comes after five years for most of those civil service titles, do make over 100K. For police, fire and correction for that matter, 93K is just the base top pay. Add to that night shift differential (3K), seniority pay(5K), holiday pay(3K), uniform allowance (1K) and overtime ($$K), all well deserved in my opinion.
There are many places (Brownsville, ENY, Bensonhurst, Sheephead Bay, etc…) that with a working spouse or partner they can afford to purchase within the city limits. When it comes to cops and firefighters in particular, they prefer to live outside of the city or in Staten Island. In addition, these civil servants are eligible for Officer Next Door/Teacher Next Door programs sponsored by the federal government as well as special discounts offered by banks via their unions.
It’s the school bus drivers, home health aides, library clerks and other lower middle class workers that will never be able to purchase anywhere in the city. Not being facetious here but is owning a home a right? When I grew up in Brooklyn, although my parents owned their home as did my grandparents, most people were renters. If you never purchase a home it does not mean that you are somehow a less worthy class of human being.
Where is it written that brownstone prices have anything to do with teachers’ salaries? Is it possible that teachers are permanently priced out of owning a brownstone in Brooklyn? Does anyone really believe that this is the metric that matters?
more4less – personal anecdotes are nice but if you’ve been a teacher for 10years (making you around the average buying/family age – then your range is approx 67K-79K, so I acknowledge that 175 (w/o any “extras”) was a bit high – so I’ll redo the math – combined you are at 140K; your housing allowance is 42K annual/3.5K mo, there is plenty of good housing in that price range – w/o even taping into any special programs or anything (which many teachers, civil servants can)
oh and btw the full schedule of salaries is available online along with this additional relevant note:
Along with competitive salaries, the New York City Department of Education offers ways to earn additional income through incentives, bonuses, and school positions outside of the regular contract day. Teachers in selected high need schools who raise student achievement may be eligible for a performance bonus of up to $3,000. Teachers can also earn additional income from after-school, weekend, or summer school employment, paid at a contractual rate of $41.98 per hour.
where are you getting these figures from, fsrg? i am a teacher in nyc (for 10 years), and unless i was married to someone who made over $100,000, which in my mind, is a pretty nice salary, a combined salary of $175,000 would be impossible. i would never complain about what i make, because i think teachers are treated pretty well in nyc, in terms of compensation, but unless i bought my house 30 years ago, there would be no way i could live comfortably here with my family, once you factor in childcare. we do make a decent salary, at the end of the 30 year rainbow, but there is a lot of time in between.
what historical norms? 1950?1960?1970?
Here is the graph SINCE 1890
http://www.investingintelligently.com/wp-content/uploads/2006/08/a_history_of_home_values.png
as you can see prices always revert to the historical average
fsrq, we got a teacher posting above who can attest 175k is not the typical income for 2 income teacher family. NYC doesn’t pay teachers that well. Westchester, Long Island,.. yes. NYC – you teach for the love cause it aint the money. This is what 2 young teachers living in my bldg told me.
We are not near a bottom, why? Cause NY is just entering the 3 yr retrenchment the rest of the country experienced and when the rest of the country begins to recover, interest rates will rise and this will put further downward pressure on NYC RE (which requires more finanicing)
That being said please STFU with ‘woo is the teacher, policeman, fireman’…since they already can afford NYC….
a 2 income teacher family of family/home buying age 32+ should be making somewhere around 175K (not including $ from summer jobs, coaching, tutoring or whatever else you can do with an approx 180 day work schedule).
Taking the standard metric of housing being 30% of your gross – they have approx $50,000 a year (or 44166 a month) for housing. Plus they should have more disposible income than most because of the amazing pension and healthcare benefits that comes with such civil service/public employee Union members get.