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.
Heather – You are actually more correct then you seem to know. In about a year we should see serious inflation in the states. The US mint is currently printing more $$$ then ever before.
How much NYC will revert to the mean is, in my book, the $64,000 question. How much does the geography of the city mess with that 4x multiplier? How does the decapitation of the wealth creation industry in NY (Wall Street) exacerbate the decline in housing prices that needed to happen anyway.
One can imagine a model in NYC that sees dramatic further price erosion.
Full disclosure: reversion to something like 4x income would be very, very good for me, so that obviously colors my thinking.
“did anyone watch Frontline on PBS last night? It was about the Bear Stearns/ Leahmans melt down. ”
Hells yeah!
“The root of the whole problem “toxic assets”
No! It was greed and delusion that got us into this mess! We could’ve done it without the Assheads!
“The money NEVER actually existed in these mortgages/insane prices…it was all paperwork and speculation on the continued rise of the market.A huge gamble that never came off.”
Now the Mutant Asset Bubble is collapsing the Assheads are trying to escape gravity!
The What
Someday this war is gonna end..
This article mentions homes and apartments >$5MM in the beginning, but then the arguments become muddled. Is the author keeping the entire article for so-called luxury properties, or is this about the entire market?
I think it makes sense for the top of the market to come down 50% or more. The prices went up 400-800% in the last 5 years.
In 2001, you could have bought a townhouse in GV for $2MM, now the same costs $10MM. How many people will be “helped” if that price comes “down” to $5MM? It’s silly to talk about trophy properties for billionaires in the same breath as we discuss affordability in general.
It’s also pointless to compare NYC to the rest of the country; we have rental vs. home ownership rates that are exactly reverse. A lot of people come to NYC for a few years and then leave. They don’t want to buy an apartment here. People who buy in NY tend to be older and richer (in their 30’s and established in their career as opposed to in their 20’s and just married elsewhere.)
Do we really think this is going to change? That the fresh-eyed graduate will be able to buy a 1 bedroom in Chelsea on his $70,000 salary? That would be the real revolution.
well according to popular sentiment it seems that “mister 70k” doesnt belong in the city and should move to newark or paterson where he belongs. :-/ so what is one to do these days who even makes significantly less than that if they work in nyc already? is it feasible to be a single person making 50 K or less and continue to rent forever? im slowly losing faith in the fact that someone like me will make it at all in the city and wonders how much longer one can sustain a living. i’ve never lived through such depressing times and it really gets to my head hearing such doom and gloom non stop coming from every single direction. sometimes i feel like my only reprieve is turning on vh1 and watching stupid reality shows with people who seem to be even more clueless than i am!
*r*
I really think we’d be better off just having inflation catch everything else up to housing prices, painful as that would be.
Of course, I have no idea what I am talking about…
You may be correct on that but you have no idea what’s going on in the market on a day-to-day basis so you shouldn’t really be commenting on it.
did anyone watch Frontline on PBS last night? It was about the Bear Stearns/ Leahmans melt down.
The root of the whole problem “toxic assets”
How there was no regulation is insanity.
The money NEVER actually existed in these mortgages/insane prices…it was all paperwork and speculation on the continued rise of the market.A huge gamble that never came off.
“Hey WHAT….BAC +15% today, C +12%, WFC +17%. That was last Friday’s story.”
I knew the seals would bark at the pop but these institutions are Zero’s Asshead! Why would you buy stocks when the Government is going to wipe you out?????
The What
Someday this war is gonna end..