Market Predictions for 2006: Neighborhood Picks
In what is now becoming an annual tradition, we invite you to share your thoughts and predictions for the Brooklyn housing market in 2006. Like last year, we’re particularly curious to hear your neighborhood “longs” and “shorts”. On a risk-adjusted basis, we’re most bullish on Prospect Heights and Carroll Gardens and, relatively speaking, would bet…
In what is now becoming an annual tradition, we invite you to share your thoughts and predictions for the Brooklyn housing market in 2006. Like last year, we’re particularly curious to hear your neighborhood “longs” and “shorts”. On a risk-adjusted basis, we’re most bullish on Prospect Heights and Carroll Gardens and, relatively speaking, would bet against Williamsburg. Overall, though, we don’t think 2006 will look at all like 2005, which was marked by huge surges in prices in some rapidly gentrifying neighborhoods. From where we sit, 2006 is looking like a year for the market to take a breath and digest all the rapid-fire changes that have occurred in recent years. Barring a big move upward in rates, we think prices will more-or-less move sideways. In our own little corner of Brooklyn, the big test will be whether the upscaling of Fulton Street can extend beyond Fort Greene. Man, could we use a gourmet market in Clinton Hill! Anyway, that’s how we see it. But what do we know. We’d rather hear from you.
Happy New Year.
Brownstoner
Ive lived in CH and FG for 8 years and now PH for the last 6. I’m white, young and have a good job with a decent salary. I’ve seen the crazy boom in FG and CH and really didnt want to pay 2+Gs a month after paying 4-6 hundo/month so I moved out to PH where I pay 900. (split $1700/mo) Having lived and worked in these neighborhods for so long, Ive seen the change class levels as price levels have changed, but not so much change in race levels. I feel that these neighborhoods were very muti-cultural and multi-sexual when I moved here and still very much are. This harmony is what draws me to this part of the city. I feel that while the city continues to grow, these neighborhoods, with layed foundations of shopping and restaurant lined avenues intertwined with heavy living real-estate streets and links of transportation into Manhattan, will continue to thrive. And it’s because of these foundations and the original urban planning that will help these neighborhoods outgrow other more trendy real-estate swings.
We bought a one-bedroom (“with den”) apartment in CH almost two years ago and we are so happy we live here. Every time I look around and see my beautiful, multiracial neighbors, and the nice tall trees, and the well-kept parks, and the gorgeous old mansions and carriage houses, I thank my lucky stars that I managed to scrape up enough cash to stop renting that tiny, mouse-infested dump on the Fulton Mall. Sure there is crime, but that will exist until we can wipe out poverty and racism in this country. What counts is that people look out for each other.
But I do think people have the wrong impression about the schools here, because nearly every mom in the neighborhood I’ve talked to is planning on sending their little ones to PS 11 (we’re actually zoned for PS 20 although practically next door to PS11), and I’ve heard nothing but good about both schools, although I guess in the past they were not so good. I also shop at the Associated on Waverly nearly every day, and while I don’t buy meat or fish there (which I only eat on special occasions anyways), their produce and staples are very good, and the staff is as nice as pie, and always greet my baby and me with smiles and chit-chat.
going way way back up the thread — I have lived in Sunset Park for 14 years and I have NEVER heard the term “Sunset Heights”. This strikes me as RE agent b.s. — like “Stuyvesant Heights”, a neighborhood most Bed-Stuy long-timers had never heard of until recently.
And as to “drug gangs” in the park for which Sunset Park is named, I can only say that in all the time I have been living across from it, I have never felt unsafe and I run in that park regularly.
I think the areas seing build-ups are going to come up short. Park Slopes upzoning of 4th Avenue has already increased crowding on subways and that’s without the twelve story towers open and filled. Parking is nearly impossible and will impact restaurants and those who might work in the borough of reverse commute to L.I. Retail in the area has be Cocoran-ized and, as with everywhere they go, the fabric of the neighborhood is being destroyed by sky-high rents. Nanks, Duane Reade, Phone Shops, and Eyeglasses. Sad to see my neighborhood actually deteriorate as property values rise.
I’d bet on Coney Island – it is still edgy enough to get a beachfront bargain and, even though the commute is loner (if not longest) you get a seat and can fall asleep commuting home without worrying about missing your stop. In addition, it has THE BEACH! a great art scene and the excitement of change in the air.
Loser: Williamsburg – no real planning and no context for the often crap designs make this once “burgeoning neighborhood” ugly, increasingly segregated, and another “cool” locale destroyed by real estate whores pimping out the hipness of people who actually are cool, edgy and trailblazers.
In 2007, I hope to see Halstead and Corcoran in a death match that has no winner. Cocoran, Halstead and Massey-Knakal have extended their operations beyond “real estate services” to wholesale destruction of neighborhoods. They are the ultimate leeches and bottomfeeders in a world that is pretty much bankrupt moraly at the end of 2006.
PLG should continue to rise. Look for prices on houses surrounding the Lefferts Manor historic district in PLG to go up or at the least not fall (I think prices have peaked in the manor itself). Condo prices on Ocean Avenue in PLG should also rise as many of those buildings are renovating and more wealthy folk follow the wealthy folk who have already moved in (the change in demographic of these buildings has been startling).
Ditmas and Beverly Square West will continue to rise. Cortelyou is slated for a major makeover (historic lighting, benches etc.) some of whic has already taken place. The commercial rebirth there is not limited to “one good restaurant” despite what an earlier poster says (there’s Vox Pop cafe/bookstore/concert space, Cinco de Mayo, Picket Fence, the fancy restaurant next door and more coming). The local PS (139) on Argyle is on the rise with an effective new principal, magnet status and two mini-schools with parent involvement (PS 139 is a good choice for PLG residents as well). The local merchants association is headed by former senate candidate Sander Hicks and seems likely to get a lot done and the neighborhood has strong block associations (and no, I don’t live there).
I agree that Crown Heights will continue to rise as well.
when did hell did groomba became a racial slur. I grew up in Italian neighborhoods. and i got called groomba a lot lol and i’m not italian decent.
prospect heights, greenwood heights, clinton hill, long island city are my predictions for continue gentrification.
I dont know maybe I shouldnt take my opinion seriously but Ive done ok making bets when the bets were based on some understanding of the landscape. I also understand that there are other factors that are a bit out there that you just got to hope dont occurr. The idea that you can hedge your bets is an interesting one. I dont think it is that easy to really match up your risk with an efficient hedge but im certainly open for suggestions.
I read a while back in the Wall Street Journal a good hedge might be shorting GM F . I got to assume if the Real Estate takes a big hit (maybe as a result of interest rates) its got to affect the economy, the consumer etc.
Under those conditions you would think the likes of these two companies that already seem to be teetering on the edge would be to send them substantially lower.
I also saw website I think its hedge street where you can short real estate prices in certain areas.
I feel comfortable making bets on Real Estate i feel its something i have experience with and also a good track record.
I also know doing well at one business is certainly not a guarantee or track record for another business. The times I really have taken substanital hits have been when I ventured off course into other areas where I really didnt have the experience or hands on knowledge.
Long Term Long on New York Real Estate and quality beach front properties
Long Term Long on Oil, Natural Gas, Energy
Long Term Short on the US Dollar, Ford, GM
Going long / short ‘hoods is probably driven largely by your long / short call on RE generally. If you’re long RE generally, you should be long the ‘hoods with a higher risk / reward (e.g., Red Hook, Bed-Stuy). And vice versa.
People’s long /short opinions on RE generally are a pretty interesting phenomenon. We all should admit are opinions are basically uninformed and just for fun (most recognize that but quite a few take their opinions very seriously). None of us really feel qualified to make portfolio calls or are inclined to really act on our opinions.
For all of you who think they have a real RE long / short call, I ask what are your calls for other asset classes in 2006 and what’s your track record? Long / short stocks, bonds, the dollar, oil, OECD vs emerging markets, etc? Most people would admit to having no informed opinion on all these other assets classes. You probably wouldn’t even care to guess, never mind actually putting big money on it.
Yet the fact that returns have compressed in all asset classes is probably one of the major drivers of RE appreciation globally. Simply put, everything looks has looked bad for a while. Experts in every asset class have been bearish about their class for some time. Many experts thought US 10-year bonds were in a bubble and were supposed to be yielding 7-8% by now (and that was supposed to kill the RE market). All have been wrong.
So what’s my prediction? The bond market is telling you that the Fed is wrong and interest rates should be flat or below current rates. I think largely because China is exporting deflation to labor and capital and will keep doing so. I doubt you’ll be able to make easy money on your money in any asset. This is + for RE.
But one real problem in RE is that part of the price appreciation is definitely being fueled by unfounded expectations of fast, short-term price appreciation. So there could be sharp fall if that expectation reverses.
To those still renting, 2 points.
One, I know quite a few people wth good salaries who never bought, want to and can buy $1-2mm places, “know” the market will fall big any day, and plan to exploit that opportunity. Their “buying on dips” should provide some support to the NYC area market.
Two, these guys are spending $35-50k per year on rent (then multiply by 5-10 years). What’s the return on that investment?
For those of you who are so sure that RE will drop 25-50% in 2006. You should play that view aggressively and get super-rich. Just selling your house or not buying one is LAME. If you’re right, call your broker and lay down some big bets (e.g., buy puts). You could lose 100% but you could make 500 – 1,000%. If you’re long a house, you can hedge that exposure in the same way.
Bottom line – Put your money where your mouth is or just enjoy the cocktail chatter.