Where and When Will The Market Bottom?
Most people interviewed in this weekend Times article about New York’s real estate market finding its bottom seem to agree that prices so far have come down about 25 percent; how much further they have to fall is a matter of more varied opinion, though it sounds like 10 or 15 percent would be a…
Most people interviewed in this weekend Times article about New York’s real estate market finding its bottom seem to agree that prices so far have come down about 25 percent; how much further they have to fall is a matter of more varied opinion, though it sounds like 10 or 15 percent would be a consensus range. Which means we could be closer to the bottom than past cycles would suggest. Even if the New York market were to end up being 35 to 45 percent down, he said, to the degree we’re seeing deals done at 30 to 32 percent down anyway, it’s not very far away. What may happen, some speculate, is that the correction, however brutal, could be accelerated into a shorter time period that last go-round. It’s possible that rather than seeing price declines spread out over a six-year period, this time it could be concentrated in a two-year period, said Ingrid Gould Ellen, co-director of the Furman Center for Real Estate and Urban Policy at NYU’s School of Law. That possibility, along with the fact that there are plenty of folks waiting in the wings wanting to buy, has the brokerage community cautiously optimistic that the real estate business may avoid having a lost decade. After all, what broker’s need to get paid are transactions more than high prices.
Looking for Bottom in N.Y. Real Estate [NY Times]
Photo by simplerich
Thanks for that link xanadu. Very interesting.
11217 has dropped 2.8%.
Xanadu;
I wouldn’t put too much stock in these statistics. Tracking on a quarterly basis is treacherous in these times, given the low volume of sales. For instance, notice that in one Park Slope zip code (11215) it is showing a 25% decline in median sales price, whereas in 11217 it showed a gain of about 3%. I think it is best to compare prices on a yarly basis, so that the statistics can be based on a larger sample size.
The numbers I cited above are those in my own 46 unit condo complex. In my mind, this is a more controlled experiment in that all the units are the same (3 bedrooms) and so you are making an apple-to-apple comparison. The peak price fetched was $1.06M in late 2007. The last sale, 2 months ago, was aboout $1.02M.
Here’s the link to make it easy. Tracks median price changes & sales volume by zip code. Notice that East New York and Sunset Park have already hit 45% — and that is based on last quarter of 2008, which should be sales that happened before the market crashed.
http://www.dqnews.com/Charts/Quarterly-Charts/NYC-Charts/ZIPNY.aspx
What, the Treasury bond market will not crash. Yes, prices are going to fall for two reasons: Selling treasuries to get back into riskier assets (stocks) and, eventually, inflation will rise. But the bond market will not crash.
this is an interesting read:
http://www.huppi.com/kangaroo/Timeline.htm
At the end of 1930, unemployment went from 3.2% to 8.7%.
At the end of 1931, it rose to 15.9%.
At the end of 1932, it rose to 23.6%.
Using the U6 definition of unemployment, which is more comparable to the definition used back then, the US is currently at 16% unemployment – and over a similar timeframe.
I’m not suggesting this is where unemployment will get to but it is interesting that the country is on the same trajectory.
You made reference to the “Great Depression.” The argument you must meant was hyper-inflation. Two very different scenarios, mutually exclusive. Rising $ supports deflationary argument which the Fed is a hell of a lot more scarred of than inflation. Maybe the What fears inflation, but the powers that be are scarred shitless about deflation.
“The problem with the What’s assertion of the next “Great Depression” hinges on one important fact. For that to occur, the rest of the world would have to stop investing in the U.S. and there would have to be a flight AWAY from the dollar.”
That’s right Dumbass and guess what??? There will be a crash in the Bond market very soon, that’s when the Greater Depression gets underway! The same thing happen in 1931..
The What
Someday this war is gonna end..
Brooklynnative, that was not my point. My point is that some on here have been saying that once China and the rest stop buying up U.S. debt, etc, we are f*cked.
That does not appear to be happening. Despite everything that’s happened, the dollar is still attractive.
The end of the world is not near.
FSRQ,
“Maintenance charges may never drop – but expenses sure have – the increase in RE taxes is more then offset by this years plunge in Oil (heat) prices and the overall decline in Insurance prices (since a high point in about 05)”.
Not according to my own personal experience operating apartment buildings locally:
1) The huge increase in RE taxes is absolutely NOT offset by any other savings whatsoever. My income has declined largely because of RE tax increases.
2) Building heating costs are the highest they’ve ever been this year despite oil prices on Wall Street.
3) Insurance prices have not decreased since 2005. They’ve increased steadily.
Where do you get your numbers from?