Open House Picks: Six Months Later
Comment: Gulp! Open House Picks 5/30/08 [Brownstoner] Previous Six Months Later Posts [Brownstoner]
Need a Hand?
Your Next Project Starts with Brownstoner Comment: Gulp! Open House Picks 5/30/08 [Brownstoner] Previous Six Months Later Posts [Brownstoner]
Need a Hand?
Your Next Project Starts with Brownstoner
I agree in principle with what Aussie is saying in re the effects of price drops. I think that if prices were to fall 50% not too many of us would like the resulting living situation in Brooklyn. I am distinctly not an economist in any way so I am not able to back my instincts up with factual information but the idea that home prices can fall 50% without a parallel fall in living standards and personal safety seems far fetched.
BHO: “We are skimming the edge of a catastrophic economic event.”
Skimming? I’m shocked at your perception, Aussie.
AUSSIE:
No you’re not. When things are not good you want to say they are terrible, when they are terrible you want to say they are catastropic. You are an alarmist. You don’t need to be… it must serve your purpose.
When the ATM doesn’t work, your bank can’t process payments and the US can’t sell treasuries then it’s catastrophic. Maybe we get 20% inflation… but none of that has happened yet. It will if prices drop 50% from here.
Hi Ledbury: That’s fine. Of course there is an argument that NYC falls while the rest of the country now stabilizes. I mentioned that in my last post. I just don’t see that happening. I think the solution to the problem will be hatched in New York and Wall St will take its percentage as it always does. Much of the funds have to flow through Wall St because that is still the only system you have.
“Intervention will work and prices will stabilize in the next 12 months…”
The administration has admitted a recession. That means we’ve entered a depression. Even if not severe as the ’30’s, there’s no way prices stabilize in 12 months. Not gonna happen. We’d need to fall for another asset bubble within that timeframe. Where is it, alternative fuels? I just don’t see that happening in 12 months. There’s too much fear in the markets and too much mistrust between institutions. Prices won’t even begin to bottom until after 2010. The brake on lending standards are gonna murder even prime Brooklyn and Manhattan home prices. Some people with 700-800 FICO scores are getting rejected. Real unemployment is actually over 11% and rising. Fugghetaboutit!
Aussie – One thing to think about is where the rest of the country already is compared to NY. I agree that there will be significant intervention which aims to stabalize prices. But that intervention isn’t simply a switch which is flipped and all of a sudden houses go from unbuyable to buyable. The drop in rates and tax incentives will be aimed to provide a floor for prices at their current level across most of the country. But if that floor is already down 30% off of thier highs, NY doesn’t simply avoid the fall to the floor because it is a bit behind the timing curve.
“We are skimming the edge of a catastrophic economic event.”
Skimming? I’m shocked at your perception, Aussie.
G’day Wasder. It’s impossible to predict what will happen in the next two years because of intervention. Left to themselves the markets and economy would have collapsed this year. The cause – the collapse in property prices and therefore the value of associated assets held in the financial system.
If we assume for the purpose of discussion that prices drop another 50% it is NOT impossible to know what will happen. That is end game – start again.
I guess a person could argue that all of the declines could be isolated in NYC and brooklyn and therefore not stress the system to the same degree but I personally think that the argument is imbecilic.
Intervention will work and prices will stabilize in the next 12 months…
“started lowballing in the last few months”
Any play at all? I bid half off and got a counter ask slightly higher but I didn’t budge. A competing buyer did but the deal fell through. I’m no longer interested in that particular listing as things have gotten worse. That was the exception. The rule so far is just flat out rejection. But things will shift pretty quickly come January (hell month).
Bid half off twice the peak comps you can afford…
“pure Kudlow”
I remember what he said last summer. “No recession”.
delusion is imagining that you have any idea what is going to happen in the next two years.