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
NOP, thank you for a dose of sanity.
Brownstoner:
Prices are tumbling in Manhattan.
At the high end, Mrs. Astor’s and Sting’s apartments have been reduced 30% and 20%, respectively, and I don’t think a buyer’s been found for William Buckley’s Park Avenue spread.
In my building (a solid but not vaunted address) the asking price of an available unit has come down 25% while another — one of the best in the building (floor-through; skyline views, etc.) — has been pulled off the market, as have a couple of apartments at 740 Park, “the world’s most exclusive address” (if you believe the book written about it), where owners with reduced fortunes are anxious to “de-accession.”
There’s talk of the market going below 5,000 — and soon. Today’s graphs of stocks and unemployment correlate with those from the Great Depression (believe it or not, back then there were upticks in the market even though the trend went down over several years [and those double-digit unemployment rates took years to develop]). Even the “best” co-ops went rental in the 30s as their owners walked away and they were chopped up into (relatively) affordable units. (Why do so many pre-war buildings have odd plans? Because formerly grand apartments were turned into warrens of small units.)
My own building — Emery Roth, marble and bronze to the gills — creaked along until the early 70s, when the last of a long line of owners turned it into a co-op. Entry price? Twenty-five thousand bucks! (Still not as good a deal as the Dakota, where my parents passed on three bedrooms for about same price in the 1960s because the West Side was unsafe!)
Can things go so low again — and take as long to recover? When Greenspan and Buffett respectively confess to their faulty theories and investments, who knows?
If you’re looking to buy, wait a (good long) while. If you have a place you like and can afford, sit back and try to relax.
And there’s no shame in renting. At a time like this it allows you to roll up your carpets and go where there’s opportunity.
Nostalgic on Park Avenue
Did you really do that skittles rainbow thing once, What? Was it a guy or a girl???
Yes, exactly What, and that is why real estate in certain areas of Brooklyn is a better buy now than later.
” I had coincidentally gone to a baptism at the church at the top of Throop and I realized that Bed Stuy was no longer what I thought it may have been. ”
Dave having people peeing on you is not a “baptism”.
“All of a sudden I’m getting a warm feeling deep inside from WHAT”
No that “Warn Feeling” is from the Piper digging up your ass for that mortgage payment on a depreciating asset!
“Not hearing from the more hardcore “40-70% off” people confirms for me they are probably not seriously interested in buying. ”
Here dumbass here is Warren Buffett who got a Flagpole shoved up his ass last year and if it can happen to him, well.. you know the rest…
Warren Buffett Says Economy Has ‘Fallen Off a Cliff’ (Update4)
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7Osj04vDEK8&refer=home
March 9 (Bloomberg) — Billionaire Warren Buffett, whose Berkshire Hathaway Inc. posted its worst results ever in 2008, said the economy “has fallen off a cliff†and that efforts to stimulate recovery may lead to inflation higher than the 1970s.
Americans are fearful, confused and changing their buying habits, which is showing up at Berkshire’s operating units, Buffett said during an appearance on the CNBC television network today. While the recession will end and future generations will live better than their parents, the economy “can’t turn around on a dime,†Buffett said, adding that some inflation is appropriate right now.
Wait until the Bond market get a whiff of inflation…..
The What (Taste the rainbow)
Someday this war is gonna end..
Lechacal, where I am buying real estate is already damn cheap. No need to wait around for further reductions, especially considering how fantastically low interest rates are right now. I wouldn’t know about places like Brooklyn Heights or Park Slope because I can’t afford them. What makes me different from the 50 percent off crowd is that I don’t go around thinking I should be able to afford a $5 million brownstone just because they’re located in the same borough or same city as I am. I understand the people who live there are rich and I am not.
There are sellers who don’t really want to sell, and buyers who don’t really want to buy. I sold my Brownstone in Cobble Hill last year and once I had the first offer, folks who didn’t want it started to bid. I made a all cash offer on a house in Park Slope that the seller passed on. When I pulled out they called and knocked 200K off, but I was already on the way to purchasing another house. The deals that happen are due to both parties being into what they are doing and being reasonable. The rest is all games.
mopar, the more I read your post the more absurd it seems. Is a seller who refuses to lower his price “obsessed with prices”? Does that seller “not know anything about real estate”? What a ridiculous position to take that someone who is waiting to buy something for less is to be sneered at for not understanding the game. Pricing is a zero sum game between buyers and sellers, and a buyer who recognizes this in a falling market has simply demonstrated that he is not brain dead. Really, your post makes you sound like a realtor who tries to make buyers feel insecure and unworthy by subtly mocking their desire for thrift.
Lechacal, Muffett,
Rational responses. Thank you. I hope you guys find the places you want at the prices you want.
And mopar, I agree with you. I posed the question interested in the responses. Lechacal and Muffett’s responses make sense. To an extent it’s what I did, I waited for a place I really wanted to come along at a price I felt was reasonable based on my own experience, expectations, and comps.
Not hearing from the more hardcore “40-70% off” people confirms for me they are probably not seriously interested in buying. Ever.