Red Nabes Lose: Condo Price Cuts all the Rage
All the neighborhoods in red above saw more price decreases than increases on condo units between mid-February and mid-May, according to StreetEasy numbers the Real Deal crunched. The data shows that there are more price cuts these days than price increases in both Brooklyn in Manhattan. In Brooklyn, there were cuts at 183 units, with…
All the neighborhoods in red above saw more price decreases than increases on condo units between mid-February and mid-May, according to StreetEasy numbers the Real Deal crunched. The data shows that there are more price cuts these days than price increases in both Brooklyn in Manhattan. In Brooklyn, there were cuts at 183 units, with the average price decrease totaling $42,195. At the same time, there were 103 listing increases averaging $34,660. The stats for Williamsburg are probably the most interesting: The neighborhood had the greatest number of price changes, 104, but it ends up green on the map because there were a bunch of price bumps at Northside Piers. Take Northside Piers out of the picture and there would have notched 40 decreases and 11 increases. Clinton Hill and Park Slope fared poorly in the tally, with the former lodging reductions on 24 units and increases on only 3, and the Slope seeing a total of 18 decreases and zero increases. Brokers say the numbers for the two neighborhoods may have reflected listings where brokers/developers had loose definitions of the two neighborhoods’ boundaries (Bed-Stuy and South Slope, maybe?). Overall, not the prettiest picture.
Condos on the Chopping Block [The Real Deal]
Graphics from The Real Deal.
Ed McMahon and Evan Holyfield are not victims of a bad economy but victims of their own foolish spending habits. Their financials woes have been growing for years. They should have down sized from their ridiculously gigantic mansions into normal homes among other things years ago when they both had more options. Of course they can’t find buyers for their mansions now.
I always wondered why anyone would need a house with 17 bedrooms if they are not related to Warren Jeffs.
Telecommuting made it easier for me to leave the city — and to come back. But it doesn’t explain why it is so much cheaper to rent than to buy.
Actually, not 3:03 or 3:07 but 3:31.
Most sales in the bubble have been by people who are using the equity they made because of the bubble. One Wall Streeter at the top of the chain paying too much for an old UWS apt that no one wanted when it went coop a generation ago allows a dozen other people to trade up or trade down.
But if the Wall Streeter loses his job or his confidence and decides to rent instead of paying $2500/sft, then the whole daisy chain ends. And if some boomer in Park Slope decides to retire, all the trading up or down doesn’t bring the new money into the system that is needed to balance the stuff that just moved to a really cheap condo in Florida/AZ/Greenwich/Lodi/Whatever plus lots of money to travel to Paris.
For prices to keep going up, there needs to be a constant flow of new people who are willing to pay ever higher prices with real money — not tradeup money — in to the system. That’s what allows the rest of us to trade our overpriced condos for overpriced brownstones and vice versa.
3:07
Brooklynnative – you are talking to deaf ears. I for one very much appreciate an informed analysis. It is AMAZING to me that people are in such denial on this site. Frankly the lack of intellectual curiosity is pretty sad. Shows how truly out of it people in the “arts” can be – just not a clue about what is going on in the financial markets right now and no interest in learning.
3:03?
long-term migration trends won’t make a bit of difference in the next 2-3 years when stuff you bought in 06-07 is off by 10-20%, so stop bringing it up on every post. you want another demographic trend? the baby boomers are hitting retirement, which means the pig in a python portion of our population is downsizing and going to fixed income and then dying. that should do wonders for demand over the next 15 years.
back to today – the downshift in wall street doesn’t happen overnight and is still unfolding as we speak. bonuses are going to be way down (and mostly stock) even vs. last year and there are fewer people who actually have jobs. plus, more layoffs are coming. this does not translate into confidence for finance people or anyone else in “IT, creative” or whoever you think is buying $2mn brownstones or $1200 sq. ft. apartments. you guys are either totally clueless or totally desperate, or both.
3:03 seems not to understand the difference between a reality check and a political agenda.
NYC clearly has become more attractive to certain types of affluent people. That’s why rental rates are up despite the enormous expansion of housing stock for affluent people.
But the price bubble has little to do with these long term trends. First, NYC has been been attractive (and increasingly attractive) to artistic/IT/literary types for 50 years at least; the bubble started only in the mid-1990s. Second, to the extent that NYC is really more attractive and there is a real demand for a limited housing stock, rents rise. That is a real phenomenon. The basic sign of a bubble is that prices stop tracking the underlying reality. Here, we can see a bubble because sale prices and rents are completely out of whack.
Desires to own rather than rent can explain a gap between rental and ownership prices, but not an ever increasing gap. The current gap is completely unprecedented, by a factor of close to 2. Historically in NY it has been cheaper to own than to rent, reflecting the usual reality that rich people do better, and even at the peak of the 1987 boom it was only the same cost.
Right now, in most of the brownstone neighborhoods, buying costs double renting. That’s a bubble, whether or not NYC or Park Slope or Bushwick is the center of the universe. (And, incidentally, it isn’t. Even in the US, there are far more nice center cities in the US with decent food and theater than there were even a decade ago. The trend is against NY’s uniqueness, even ignoring that we no longer have any distinctive industry, retail, etc.)