Open House Picks: Six Months Later
Comment: Freeze! Open House Picks 10/03/08 [Brownstoner] Previous Six Months Later Posts [Brownstoner]
Comment: Freeze!
Open House Picks 10/03/08 [Brownstoner]
Previous Six Months Later Posts [Brownstoner]
“My advice is as follows: If you can’t buy a property with at least 20% down and a 30-year fixed-rate mortgage, that means you can’t afford it. Move on and downsize your expectations.”
Sounder advice has never been given.
how many of you here were expecting, say back 13-14 yrs ago, to pay $1M or more to live in a nice house in a nice neighborhood in BK? I doubt many had that view. Plus our income probably turned out around or a little better than expected. That alone tells you in concept that prices can fall alot. Albeit I dont believe it’ll fall back to the late 90’s level but if happened I could understand why (ie what goes up so much beyond fundamentals can easily drift back to where fundamentals make sense)
Dave if you dont thing its factual that most mortgages from the past 5 years are ARM’s I am not sure why you consider yourself the resident scholar on this board. You should go do some due diligence before you spew mis- information. i am stating facts and you can find them yourself if you were not so lazy.
Posted by: brickoven at April 3, 2009 1:27 PM
JACKASS….you threw it out there saying they were and I’m asking you to back the statement up with the numbers. I’m not talking about most mortgages around the country, I’m referring to these three neighborhoods which is what your comments were directed towards.
Thanks, Left Hook. Boy is that Carroll Gardens place ugly. It’s all sheet rock and Home Depot. How sad.
Bklnite – if they are waiting to get their current prices, they’re going to have to wait a lot more than “a couple of years”. Hopefully, by 2011, we’ll be nearing the bottom (or, perhaps in 2010) but then it will take a long while to climb back up….
OK, here is a brief discussion of why ARMs are a bad product for most (but not all) people.
1. The rate on ARMs can go up or down. Subject to limits on annual increases, the rate can go up a lot. Some ARMs are even designed to go up significantly after a “teaser” rate expires.
2. For various reasons it is human nature, particularly in New York, to buy as much apartment as one can possibly afford.
3. When deciding how much they can afford, people seldom give serious consideration to what will happen if the rate goes up significantly. They just think to themselves, “well, the broker told me the initial monthly payment will be $6,500, so I’ll just plug that into my budget and — well, it’s real close, but I can do it!”
4. Inevitably, at some point, rates will increase above that initial montly payment that so many people used in their budget process.
5. A great many of those people, particularly in this environment (where earnings are not increasing and they can’t sell to get out), will lose thier shirts.
6. Many of these people did consider the possibility of higher payments, and just assumed they could refinance into a fixed rate or sell if their rate went up. Both of those assumptions could prove terribly wrong.
My advice is as follows: If you can’t buy a property with at least 20% down and a 30-year fixed-rate mortgage, that means you can’t afford it. Move on and downsize your expectations.
These sellers are like the banks getting relaxed mark to market rules. They’re keeping these houses on their books for what they think they’re worth, not what a buyer would be willing to pay. They must not need to sell and may end up waiting a couple of years for the market to get to their price.
here’s the carroll gardens place.
http://dandreacraigrealty.com/town2.php?vari=T030
South Slope came on market a long time ago (over a year, if I remember correctly), at 1.325, and I’m pretty sure initial price cut to 1.125 happened before the financial crisis. It’s a tiny house, needing work, on a pretty block in a crummy school zone. And a killer is that the backyard looks out onto a very unfortunate renovation by the neighbors (ugly extension-y looking thing). I think they would be much smarter to price this under a million to get some interest. Otherwise, it will just continue to sit.