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
This is an interesting resource if you want to see actual changes in sale prices in Manhattan. It takes a few minutes to learn how to navigate. Once you are able to find individual apartments that have sold recently you can see price history. There are some that are selling below the last sale price. http://manhattan.blockshopper.com/cities
Look Chicken If we go in to Annihilation, the Political landscape will be “Scorched Earth” with a Fascist State in place! Just take a look in History and everytime these events happened the people suffered very badly! Here take a look at this:
Weimar Republic
http://en.wikipedia.org/wiki/Weimar_Republic
The Weimar Republic ( Weimarer Republik was the democratic and republican period of Germany from 1919 to 1933. Following World War I, the republic emerged from the German Revolution in November 1918. In 1919 a national assembly convened in the city of Weimar, where a new constitution for the German Reich was written, to be adopted on 11 August. The attempt to re-establish Germany as a liberal democracy eventually failed 14 years later with the ascent of Adolf Hitler and the Nazi Party in 1933. Although technically the 1919 Weimar constitution was never officially invalidated, the legal measures taken by the Nazi government in February and March 1933, commonly known as Gleichschaltung, destroyed the mechanisms of democracy. Therefore 1933 is usually seen as the end of the Weimar Republic and as the beginning of Hitler’s “Third Reich”.
Those people had to carry a wheelbarrow of money to buy a loaf of bread! There are plenty of Dumbasses in America can and will start Sh*t like this if we have a all out crash! This is why I have changed my tune lately because I know if things get real bad the dumbasses will Goose Step in the streets and “House Prices” wont mean dick…
The What
Someday this war is gonna end..
christopher – 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)
I went to an open house this weekend and it seemed a bit more lively than what I’ve seen lately.
But maybe those other folks were like me: Looking around and waiting for further price cuts (the apartment in question had been reduced once but was still, in my opinion, significantly overpriced based on comps in the same building).
Condo/Co-op prices might come down but I’d bet the monthly charges will never drop, they will only increase.
The carrying charges pay the real estate tax, common electric, heat, etc. Until those expenses drop the monthly charge wont drop.
I’d say you are more likely to get a $550,000 condo for $200,000 before you’d see a $1,200 a month charge cut to $600.
Common charges wont drop until building expenses drop. And expenses don’t drop, ever, no matter what the economy is doing.
WTbound: I don’t think prices have come down anywhere near enough to spark real buying interest in places like Park Slope. There might be plenty of lookers, but I would bet my reputation that actual sales volume and prices will keep falling for a while before there is any pickup. There is of course not much we can do other than offer our respective predictions. Time will be an impartial judge.
Polemecist – Cities have been a draw to the worlds best and brightest (in the non-ironic sense of the term) for centuries and there is no reason that this will change as a result of the economic depression; if anything societies ecological awareness as well as the threat of global warming should accelerate the trend here in the U.S. Therefore if demand for living in urban areas continues – cities (and NY as one of the most dynamic) will continue to demand a premium in terms of price per sq ft.
I also take exception with the notion that price declines in RE will happen quickly (if severe) and then reverse. A much more likely scenario is that prices will fall rapidly, then as the economy stabilizes so will RE prices – HOWEVER as the economy ‘threatens’ recovery the price for all these rescues will come due – Inflation – which the Govt will try to control with higher interest rates – which will raise the cost of borrowing and AGAIN lower the price of housing (in real terms);…..add in the demographic changes taking place (aging population) and it is easy to predict housing as a capital appreciation “investment” is DEAD for at least a generation (that is 20years – give or take)
“Given that some of you have predicted declines of up to 50% in the NY market, what is the historical precedent for such a prediction?
Again, I urge a debate, not derision or invective.
Posted by: benson at March 9, 2009 10:24 AM”
Benson, part of the reason why what has happened over the last 2 years has caught so many people by surprise has been in part due to over-reliance on precedence.
When people say that the market is much more sophisticated and efficient today, they don’t take into account that previous generations thought they were at the forefront of financial investments. Future generations will look back at us, shake their heads, and say “how sad that they thought they had mastered risk” – meanwhile creating their own traps to fall into.
Polemicist,
I too think prices locally will tank, but I don’t think NYC salaries and housing prices will ever come close to the national average. Most cities in this country are strip mall infested urban sprawl cultural wastelands. NYC will remain one of the top destinations for the brightest and most ambitious young people graduating from college. Try living in Miami after living in NYC and you’ll be bored out of your mind, despite the nice weather and the beaches.
No doubt Wall Street is immensely important to our local economy, and it’s collapse will structurally change real estate prices for years to come, but fortunately there are many many other benefits NYC lords over the rest of this country that will continue to thrive.