NYC Real Estate Market 'Most Challenged'
“When we look at New York City, we look at a price-income ratio that historically has been four times income, versus three times nationwide… If you want simply to get back to the median, it would be a 46% correction…If I had to pick one market in the country with the most challenge and the…
“When we look at New York City, we look at a price-income ratio that historically has been four times income, versus three times nationwide… If you want simply to get back to the median, it would be a 46% correction…If I had to pick one market in the country with the most challenge and the most substantive rate of decline [ahead], it’s New York City. It has the greatest number of job losses among the higher earners.” — Ivy Zelman, a former Credit Suisse analyst, in Barron’s via Curbed.
wasder — no one answered you. My money is on january 2000 levels, which conveniently were the reference point (100) in the case schiller index. The max in NYC was 215 in June 06 (meaning prices more than doubled), and in November of this year it was 186, down 11% from peak, but still up 86% over Jan 2000. I don’t think the index is corrected for inflation.
So I think it has fallen 11 of the 54% it needs to fall. give back a little for inflation and you get BHO’s number.
“Also, what about what DIBS is saying re C-S being national numbers rather than NYC specific?”
wasder, you can look through a lot of the data (and methodology) online:
http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html
Here are some data points of home prices from the New York market with the year 2000 defined as having a value of “100”:
Jan 1987: 74.42
Sep 1988: 85.54 — this is a peak
Apr 1991: 72.29 — this is a bottom
Jun 1998: 86.58 — back above Sep 1988 for first time
Jan 2000: 100.0 — still going up from 1991
Jan 2002: 125.19 — up
Jan 2003: 146.55 — up
Jan 2004: 163.63 — up
Jan 2005: 187.19 — up
Jan 2006: 213.50 — up up up, more than doubled in 6 years!
Jun 2006: 215.83 — this is a peak
Jan 2007: 212.78 — down a little
Jan 2008: 200.44 — back to summer 2005 level
Nov 2008: 186.81 — back to Dec 2004 level (12% below peak)
The larger 20 city composite index peaked at 206.52 in July 2006 and is down to 154.59 by Nov 2008 (25% below peak).
Obviously, NYC has come down more since Nov., but at that time it had only fallen 1/2 as much as the broader market. Chances are NYC has caught up a bit. December numbers get released tomorrow, I believe.
Note that RE prices went down from 1988-1991 and took til 1998 get to back to 1988 levels.
Will prices drop for only 3 years this time (2006-2009?) or will it be longer?
Will it take til 2016 to see 2006 prices again?
We shall see…
Cornerbodega…How many homes do you own?? Please answer the question.
Because even if Dave lost his shirt in Bed Stuy (which I don’t think will be the case) he has 3 other homes, from what I gather.
Are you REALLY this crazy? Or is this all an act?
cornerbodega….I hope you don’t think your social security check will cover your rent when you’re old!!!!
Try and learn something here…you’ll be less bitter.
any guesstimates on what Dibs will lose? What if we helped him out a bit and applied the median income/price ratio to bed-stuy? DOH! On second thought, maybe we shouldn’t as I don’t condone violence…
11217 it was the weather. nobody stops on the sidewalk when it’s 20 degrees.
Snark,
The thing is…even if that place ends up going for 20 million, it’s still ridiculously high. We’ve been inoculated on these high prices to the point that 29 million seems like a bargain basement price cut or something just because it started at 46 million.
I appreciate ALL the anecdotes though!
I’ll say it again bodega, if you think lechacal is a cheerleader for undentable brooklyn prices you are really misreading his posts.
Nice anecdote, 11217. Here’s another:
“PRICE CUTTING HAS BECOME SAVAGE. The 14-room Park Avenue apartment of the late socialite Brooke Astor — which Barron’s highlighted in that earlier story after its price had been cut from $46 million to $34 million — is now down to $29 million and probably has to be cut further.”