Local Housing Market Headed for the Trash Can?
Real estate experts are convinced that the New York region’s housing market is about to undergo a serious correction, according to an article in yesterday’s Times. Analysts expect the coming bust to be significantly worse than it was in the early ‘90s, particularly in New York’s suburban markets. Nevertheless, Manhattan—and by proxy, pricey Brooklyn—has so…
Real estate experts are convinced that the New York region’s housing market is about to undergo a serious correction, according to an article in yesterday’s Times. Analysts expect the coming bust to be significantly worse than it was in the early ‘90s, particularly in New York’s suburban markets. Nevertheless, Manhattan—and by proxy, pricey Brooklyn—has so far mostly weathered the national housing meltdown, and the decline in values here isn’t expected to be as bad as in our outlying suburbs. During the year that ended in November, prices in the NY metro area fell 4.8 percent, according to Standard & Poor’s/Case-Shiller Home Price Indices—a drop that pales in comparison to Sun Belt cities, many of which saw double-digit declines. Still, economists predict that house prices in the region will drop by at least 15 percent in the current correction. Ouch.
Home Prices Start to Dip, Recalling ’90s Slump [NY Times]
If you are looking to history – studios got hit the worst in the last RE meltdown in NYC
Lovely fields of beautiful tulips, swaying in the breeze.
Nobody should buy a place that they can’t afford now, as is. Also, no one should go into a housing purchase without thinking that he/she’s will live there for a long time.
Having written that, lives change. I do feel for that buyer who really and truly thought that he/she would stay in the house forever and ever only to discover that five years later that their lives are taking them elsewhere and they need to sell. I think that many would love to have Bob Marvin’s 33 years in one neighborhood, but it’s not always possible.
We’re talking about two things here, both involving significant risk: those who buy to flip and those who buy more than they can afford right now with the hopes that increasing values will allow for a refinance out of an adjustable rate mortgage. About the latter, maybe a good dose of common sense on behalf of buyers (Gee, maybe we shouldn’t borrow to the absolute limit. What if one of us loses our job?) and lenders (Gosh, maybe we should calculate groceries into their monthly expenses) is needed.
Folks with Adjustable Rate Mortgages who were hoping to refi before reset are screwed. That pretty includes everyone who purchased since 2006.
If you have a fixed rate mortgage and you are currently comfortable with your payments, you should be fine.
11:36…I think the low end will hold up quite well…you are correct….anytime there is a 300K and under apartment for sale in a good area, it gets snapped up quickly here.
And just as a point of reference, I bought my studio at the top of the market…in north park slope for 250K in late 2006. I sold it two months ago for 339K.
So not only does the market seem to be holding up, despite what people on this thread say, but the smaller, “cheaper” apartments go fast.
I sold mine in a week, had 4 offers over my 329K asking price and found an amazing 1 bedroom around the corner that I bought fsbo from someone I had met in Prospect Park…
I’d say you are better than fine, 11:36.
Aint’ no way your studio will ever sell for less than 200K again, I do not think.
11.36 you should be worried because in the future everyone, besides flying around in hovercars, will be mutlimillionaires and will definitely not be interested in buying anything under 3000 Sq. ft.
What are people’s thoughts about the low end of the housing market? I bought my Clinton Hill studio (450 sq. ft) in 2005 for 177k (with a 4.75% interest rate!), thinking that people would always be looking to buy on the low end (low and moderate income people, for example). Was this a safe assumption, or should someone like me be worried?
11.18. You “could be happier” if you had a mortagae that was $100,000 less than it is now.
I bought my house at peak – literally if we had found it two weeks later we probably wouldn’t have gotten our mortgage – so that kind of sucks. However we did get the down payment from buying upstate and selling at peak of the market, so did get some advantage from the bubble. I have observed closely and haven’t seen many of these small houses that cost only slightly more than one mill in carroll gardens o am comforting myself with the fact that we were right to jump on something that doesn’t come up for sale often. however we will not be able to refinance to take advantage of lower rates since prices are now steady or going down, which is too bad. also – at this rate we will not be able to take out a heloc to finance building another floor, which we wanted to do in a few years.