‘Buyers Just Not Pulling The Trigger’ In Manhattan
Some reports from New York. “A sharp drop in the average price of Manhattan condominiums could revive concerns that the luxury condo boom, which has been seen around the five boroughs at an increasing rate since 2002, could result in a glut of apartments or developers rethinking their pricing expectations.”
“Appraiser Jonathan Miller said some of the apartments now coming on the market are suffering from bad timing. If they had been completed over a year ago, they would have appreciated more quickly. Now, he said, higher mortgage rates have lowered demand and buyers are taking their time. ‘Mortgage rates were what created the frenzy, and mortgage rates are what ended the boom,’ Mr. Miller said.”
“His analysis shows that the overall inventory of listed Manhattan apartments is up more than 50% versus last year. ‘Sixty percent of condos in inventory right now are from new development,’ Mr. Miller said. The average price of condominiums, which represent the vast majority of the new housing stock entering the market, decreased between 7.4% and 17% since a year ago.”
“Last year, there were more than 31,000 residential building permits issued citywide, and more than 8,000 in Manhattan, the most since 1988, when records were first kept by the city’s department of buildings. Through March of this year, that building trend has continued, and Manhattan is on pace to exceed last year’s totals.”
“An economist for Brown Harris Stevens, Gregory Heym said developers of new apartments are typically slow to publicly report when prices need to be trimmed down, but he said there is ’some concern that some of the projects will be able to get the prices they need.’”
“Messrs. Heym and Miller said that so far the decrease in prices of new condos is less than had been feared, and they are looking to see if the downward trend continues next quarter. ‘In this transition period there is more inconsistency,’ Mr. Miller said. ‘It is the transition from a housing boom to a period of modest to flat growth.’”
“The inventory of condominiums, which recently have accounted for nearly all new development in the city, soared 93.5 percent from last year, while the inventory of co-operative apartments increased 30.8 percent. ‘I wouldn’t want to see the inventory go up too much more,’ Dottie Herman, Prudential Douglas Elliman’s CEO said.” ”
“‘The Wall Street bonus money exaggerated price growth, because at the same time you had rising inventory,’ Miller says. The second quarter had the highest inventory level since 1999, when Miller began tracking sales. The decline in sales activity was the worst in three years, he says.”
“The growing inventory is due to a tug-of-war between many sellers and buyers who are having trouble converging on prices. ‘I’m struck by how many buyers are waiting on the sideline,’ Miller says. ‘There are buyers, they’re just not pulling the trigger.’”
Inman has more detail from the same report.
The inventory is growing because the sellers *are* pulling the trigger. New York buyers know well enough to avoid falling knives.
Supply and Demand rules, and if the buyer won’t buy at the asking price, and if the seller won’t sell at the offer price, then the blame for a “no sale” goes to both.
That being said, it is obvious that the market clearing price has fallen across the country, and it’s not clear to me if sellers are refusing offers because the price is below their reservation price (the minimum they are willing to sell at), or if they are just having a hard time “reading” the market (and still trying to bargain for larger gains).
I think that it’s the later, since we hear all the time about RE agents who are TRYING to get sellers to lower prices. I think what we’ve got hear is a bunch of inexperienced and uninformed sellers who haven’t realized where the market has gone.
Forget funny bumper stickers and t-shirts from this blog. We all need to carry around a brief introduction to “sunk costs” for these sellers. Wouldn’t it be funny if someone printed up “sunk costs” brochures and left them at open houses?
New York buyers know well enough to avoid falling knives.
If only. There’s a two-year-old condo building down the street from me, and owners are already starting to sell of their units, asking prices approaching double what they paid in 2004. Of the three I know about, two units are “under contract” (too soon to know what the final prices are) and while they didn’t go right away, it was really only a matter of weeks. So there are definitely some fools still here in NYC, espcially considering there’s hardly any place (around my stomping grounds in Brooklyn and Manhattan, anyway) where you aren’t within sight of a construction contract. Even in NYC, how many people are there really that can afford “luxury condos”?
Argh! “construction contract” should read “construction project”.
“Pulling the trigger”… for what? The gun pointed pointed at sellers for overpricing? How about the one pointed at Bubbles Greenspan for creating this whole mess? Or do they mean the one pointed at our own head with suicide loans?
“pulling the trigger”
I find it immensely revealing that this metaphor keeps getting used for buying houses.
It gets used for all sorts of trading. There’s plenty of gallows humor in both the futures pits and up and down wall st (those big ads you see in the Journal are tombstones).
You get one bullet and the longer you wait, the closer your target gets.. What are you gonna do?
The report paints a rosy picture compared to what I’m seeing in Manhattan. There are new condo buildings going up on almost every block, and the ones that have been completed recently don’t seem to be filling up. One of my neighbors in the real estate business is circulating desperate emails to everyone he knows, urging people to buy now.
That’s just anecdotal, however.
The NYC market is going to correct, but not as dramatically as some of these other cities that attract reckless borrowers. New Yorkers are very shrewd and quite conservative financially. The city makes you that way — you feel like the “wolf is at the door” at all times. Most of my friends make over $300k, and yet almost all of us rent small apartments, don’t own cars, and shop at the Gap. Of course, none of us save much either, what with the 50% tax bite and high rents. All of us feel priced out of housing, but nobody’s holding their breath for 30% price drops anytime soon. I think a lot of these new $2 million condos will take a long time to be absorbed, especially if the economy slows a lot toward the end of the year, causing Wall Street’s $850k Christmas bonuses to become measly $250k bonuses.
I am not sure the percentage of “shrewd” buyers is enough to shore up the NYC market- especially when you consider the very unshrewd activity happening in NYC’s outer boros. NYC’s prime housing stock is not ritzy apts - it is single-family homes.
NYC is also filled with people addicted to debt and maxing themselves out, just like the rest of the nation. It’s very interesting to me that many NYC-area posters on this blog view the market through a very high-rise, manhattan window, when in fact that market is just window dressing on a city powered (and shored up) by a huge middle/working class.
It is also a city that has suffered flight and blight before. If NYC stops becoming a gentrified wonderland, how long do you think it’ll take the uber-yuppies to flee their glass condos?
Agreed, even though I’m one of those Manhattan-window types!
It was not that long ago that Hell’s Kitchen, and Chelsea, and even the Upper West Side had an “edge” to them.
Yes, a very good point. As a lifelong New Yorker, I’m often get a kick out of our conceits. So we are shrewd and careful? Um, not if you look at consumption patterns in Manhattan. And shrewd and careful certainly doesn’t describe the real estate market these past five, six years in Brooklyn, where I know live. It was a mania-and-sweat driven bid-a-thon, in which seemingly every buyer was conversant in 80-10-10 mortgages and other arcana designed to push themselves further into debt. I very much understand the anxiety and I’ll take no satisfaction if it turns nasty on folks. It’s very hard to take a long view when the short look seems to threaten to lock you out of the market.
As for corrections, who knows? Maybe this is the soft one. Maybe. But I remember the early 90s, when friends took 30 percent hits on their coops in Park Slope.
Well the market reports originally cited were about the Manhattan property market, not NYC as a whole.
It is of course possible that Manhattan could de-gentrify. Most likely cause would be the NYPD dropping the ball. However, it is much more likely that places like Bed-Stuy revert to pre getrification prices.
I was responding to LowTenant’s post, which implied the Manhattan market reflects NYC as a whole.
I agree that boro prices are more volatile (and there sure has been a lot of predatory, unshrewd activity in areas like Bed-Stuy), but also strongly suspect that dropping prices in the boros will have a ripple effect on Manhattan.
My point was more about Manhattan, where I believe that the primary economic driver is the kind of people who are all about deferred gratification — most jobs with banks, law firms, consultancies etc. involve living through pure hell for 5-10 years in order to be highly paid on the back end. Among the NY folks with decent incomes, you don’t have as many “overnight success” types who spend like it’s only going to get better in the future. Maybe it’s the crowd I run with, but in my experience, Manhattanites generally under-consume while they’re in their prime earning years. Of course housing is overpriced and will correct here, but not because of the stereotypical maxed-out overconsumer who will be defaulting on the next rate hike.
Another of Miller’s pieces noted that Manhattan has been homogenized, with high prices not only on the Upper East Side but also the Upper West Side and Lower Manhattan. And development has spread not only througout that borough but also to Brooklyn and Queens.
One planner once said that NYC suffered not from a shortage of housing but a shortage of good neighborhoods, at least if you weren’t poor. But now the number of neighborhoods perceived “good” has radically increased, along with the development in them. The city has more housing units under construction than at any time since the 1960s.
And if that isn’t enough, Philadelphia is now advertising itself here as the “sixth borough.”
I’ve watched with amazement at the frenzied construction all over lower midtown Manhattan (where I work) and Brooklyn (where I live) - there is a bust in the making for sure - Chelsea is brimming with towers going up and the outerboros have so many single family knockdowns into little condos underway that it is staggering. Everywhere you look, it is condo, condo, condo.
I don’t know the Manhattan market, but I know for a fact there will be resistance in outer boros for 400K - 1,000,000 prices for 800 sq. - 1200 sq. foot 2-3 bedrooms - the granite countertops are no fun when they are hitting the back of your neck in your tiny little living room. I’ve been to a bunch of open houses in Brooklyn looking at these boxes and every one who walks through is muttering about how small they are - pretty yes, but I couldn’t picture sentencing my family to 30 years imprisonment in one of these cells.
This is beside the fact of how incongruous so many of these concrete boxes are sitting in the middle of a row of wooden victorians or small row houses. The neighborhood groups are getting up in arms about this stuff as well.
Incongruous and slapped together as quickly as possible with the cheapest possible bones. Don’t let the granite countertops fool you. Many of these boxes werent’ made to last past 10 years
I work in the commercial construction field and our office is down near Wall St. Our clients are major banks, insurance companies, and pension trusts investing in real estate. The whispers started back in October that the party was winding down, regarding condo construction through out the boroughs.
All around my office I see office building after office building converted into condos. I visited one of our condo projects and couldn’t believe these crappy LITTLE hell holes were going to sell for $500K.
You can say New Yorkers are savy with their money, but that means nothing if the inventory is exploding with few buyers. repartments here we come!
At least around where I live in Brooklyn, it seems that relatively “low” priced condos (less than a million) are still selling, more expensive condos are not. Many condos have appeared in the last couple of years, more are under construction. Condo conversions of existing apartment buildings appears to have slowed; landlords are realizing it’s going to be better to have rentals for the near future. All I am hoping is that correction comes before groundbreaking on the Atlantic Yards project.
I have to admit I find it hard to be sympathetic to people with $300K incomes who can’t save any money. Even with 50% taxes that would leave you with about $12,000 a month. No lifestyle that requires that much money can be considered frugal or financially conservative.
I’m personally saving about $5 grand per month, which I think is pretty conservative, but that adds only $60k per year to my net worth, which is a drop in the bucket compared to what a lot of people have made in home equity inflation over the last 5 years.
“I have to admit I find it hard to be sympathetic to people with $300K incomes who can’t save any money. Even with 50% taxes that would leave you with about $12,000 a month. No lifestyle that requires that much money can be considered frugal or financially conservative. “
Sounds pretty good to me - at that rate you can save over 300K in 5 years. Maybe NYC homeowners made that much in equity, but in most of the country, even post bubble, houses aren’t worth 300K, let alone have many made 300K in equity.
Best of all its risk free.
Yeah, but at least you’ll still be holding cash when a lot of other people will be holding foreclosure notices.
The blunt truth is that Manhattan is going to experience some serious trouble.
Everyone keeps talking about Wall Street bonuses but they’re missing the bigger picture. The classic Wall Street model was that they were financial intermediaries, but like all intermediaries, the internet is forcing them to go the way of the dodo.
Traders are being replaced by computers, and trading models. There is a serious squeeze on commissions because the spreads are tightening. All of the firms are desperately trying to reinvent themselves as “buy-side” hedge funds, but the serious talent is leaving to go work for larger hedge funds. After all, if the only reason to stay at the larger firms was stability, and that’s going away, you might as well take on the risk, and try and make more money.
Firms have also realized that Ph.D’s in the sciences and mathematics are cheaper than MBA’s (and smarter too.) Virtually every firm I know has stopped hiring MBA’s (but they will never admit it.)
OK, so you have a business model that’s dying, salaries that are dropping, firms silently letting older traders go, inventory in Manhattan reaching stellar heights, and people expect good things to happen?
Expect an epic ass-pounding!
Do you work for a top tier IB?
Used to. Walked out!
Money too good for ya?
No, merely got a job that paid a lot more.
I don’t see your Wall St. shakeout taking place at the moment. Funds and banks of all sizes are still hiring like crazy; I get calls from recruiters at least twice a day (and I don’t have a PhD).
Money from all over the world is still chasing private equity, hedge funds, and other pooled vehicles as fast as Wall st. can create them.
It is a cyclical business, and sooner or later there will be a downturn, but at this point Xmas 2006 is going to be quite respectable.
Can’t comment for the MBA vs Phd bit (seen alot of hedges pursuing quants/etc but haven’t seen anyone ignore a good MBA either), but I can say hiring has been pretty aggressive here across all levels and in all observable IBs with alot of poaching going on.
‘Firms have also realized that Ph.D’s in the sciences and mathematics are cheaper than MBA’s (and smarter too.) Virtually every firm I know has stopped hiring MBA’s (but they will never admit it.) OK, so you have a business”
Back in mid 80’s when having a MBA was the rage and then again after dot.com crash MBA did not pull in that much more in salary and bonus then non-MBA. Im talking about Silicon Valley CA. In fact our new FPA guy replaced a seasoned gal with only BS degree … same salary and perks.
In a deflationary industry (Tech) it makes no sense to pay more for labor. Therefore more education or even experience does not pan out to higher pay.
we have 2 friends in ny trying to sell right now. One already bought a new place and is carrying 2 mortgages but has refused all offers because they are too low (the asking price is almost double what he paid 3 yrs ago). Its been for sale at least 7 months. The other is slightly more realistic but still has not been able to sell in over 6 months, has gone under contract 3 times but keeps falling through. It seems either the buyers can’t sell their homes or they go for a better price somewhere else. It amazes me that neither will substantially lower their price. Nwyrkrs aren’t savvy they’re greedy! Both will chase the market to the bottom.
One of things that appears to be going on here is that all the new condos coming on the market are much much more luxurious and expensive than most of the existing housing stock. Accordingly, as these new units are sold, the medain sales price statitics are likely be skewed upward for some time when in fact, I bet, prices are actually coming down on an apples to apples to basis.
Thoughts?
I agree. It dovetails nicely with the thought that buyers will spend what they can borrow…resulting in nicer property for the same money in a falling market.
Also, yes, the builders everywhere are building everything as “luxury”…at least they’re considerate in that they want to make the nicest prison possible for homedebtors.
I think your analysis may be off. The median and average sales price of condos (almost all new construction is condo) has been falling. The prices of two bedroom coops (the old housing stock) appears to be rising.
Of course less of both is selling but I think the condo premium may be shrinking because ‘investors’ are getting out of the market.
I was just going by this quote from Inman News:
The average sales price of Manhattan condos and co-ops jumped 6.6 percent from the first quarter to the second quarter, and rose 5.2 percent compared to second-quarter 2005, according to the Manhattan Market Overview report.
However, your data shows up in the current reports as well and my conclusions are purely off the cuff speculation.
There appears to be conflicting data from the various fragmented real estate firms in New York. If there was one source of data in the area, then people would know what is actually real market values. The heavy hitters in the NYC real estate don’t want that to happen. Then buyers and sellers wouldn’t need them.
As for
The co-ops, especially pre-war, are generally much larger, so better sq. ft value, even with all the hassles of a co-op.
Definitely true and once you have bought, coop hassles are really not much worse than condo hassles.
However, the point is that the more mature housing stock has possible been increasing in sales price.
At least in Brooklyn, this would appear to be true—you can get a big prewar coop, like the ones along Eastern Avenue, for about half the price per sq. ft as the new lux condos.
‘I’m struck by how many buyers are waiting on the sideline,’ Miller says. ‘There are buyers, they’re just not pulling the trigger.’”
Eventually you will run out of suckers, sheeple, fools, whatever you want to call them.
That being said, I’m still amazed that there are educated folks out there that are still running to stick their neck in the guillotine. I recieved a call from a friends brother in So Cal to pre-qualify him for an upcoming purchase (don’t freak out my mortgage bro’s, I am licensed in Cali too) Now, this guy holds down the type of job that requires many years of “higher education”. Not only was he in a panic to buy a home, but he made the comment of possibly buying a home for each of his children to start their college funds. I’m not exagerating! Unbelievable, huh?
Well, I’m going to put myself “in the ground” from a business standpoint. Why? Because i ignored the potential commission and stepped into my bubble pulpit. I gave him the whole run-down. By the time I was done i think I had a believer. What’ll probably happen, though, is a couple of calls to a couple of RE junky friends will put him right back in the sheeple line.
good for you - hopefully he’s smart enough to listen.
If somebody in a position to make money off of me told me that they thought I’d be better off not transacting with them, it would make an impression on me.
(I’ve been to a bunch of open houses in Brooklyn looking at these boxes and every one who walks through is muttering about how small they are - pretty yes, but I couldn’t picture sentencing my family to 30 years imprisonment in one of these cells.)
Ah, but when my kids leave, I wouldn’t mind moving into a nice 800 sf unit in a good location. IF I can buy it for half the price of my rowhouse, purchased at a money of market sanity in 1994.
If there’s a real crash, perhaps the kids could buy one.
Hey, If i could go back ten years too, i would buy a victorian in Flatbush like my parents have, for 100K
- although I believe those homes are actually worth 1M like they are going for now, they were just held down due to 70th pct being high crime. Giuliani years & compstat changed that somewhat.
My real point is that 800 sq. ft. unit should be a 1 bedroom, like in the pre-wars - not a “2 bedroom” with a 12 x 10 “Master Suite” and 10 x 8 second bedroom and the kitchen “in” the tiny living room. Having lived in said victorian home & pre-war apts all my life, maybe i’m spoiled but I just can’t fathom paying 400-500K in outer nabes for 800 square. I’d rather leave the whole NY space/tax mess - which is what i (and many other smart young families) am doing.
“I’d rather leave the whole NY space/tax mess - which is what i (and many other smart young families) am doing.”
Indeed. In fact, if we were to suppose that “New York City is different,” and prices remain high here while other bubble markets fall, that would only increase the rate of exodus from the city.
One thing that makes the Manhattan market ‘different’ is rents are current rising sharply and ‘luxury’ rental building vacancies are at about 0.5%. Sellers probably figure that will reduce the downside and are being more stubborn as a result.
In your dreams.
I live in a plenty fancy building, and my rent has been flat for 5 years.
Really, where is your building?
Your experiance does not match mine or the experiance of people I know (one is renting out an apartment, another was forced to move after being priced out of her building).
BTW According to TheRealDeal vacancy rates for Manhattan were at 0.46% in May 2006.
A Glenwood hi-rise?
For the last five years my rent has been going up steadily. The building got sold last September and at our lease renewal last March we got hit with a 23% increase. Our building is far from “plenty fancy”.
Yeah, yeah, yeah, and rents in Pasadena, CA (and other areas of Los Angeles) have been going up quite a bit as well…and we all KNOW that those areas are safe from the bubble as well, right?
“But it’s different here…plus the schools! We can do this!”
I am amazed at the number of new developments. Where are all of the “wealthy” people coming from who can afford these “luxury” condos? I agree with the posting above about those of us who are earning 300K and living in small apartments and still barely getting by. But what about renting? I also do not see our greedy landlords pushing up the prices even more. Ineveitably, many of those “luxury” condos will need to be rented out if they cannot be sold. I wll be interested to see what my landlord thinks about raising the rent even more. I have seen at leats one building in my neighborhood start out as a “rental” unit and then turn into a “condo” unit. I wonder if it will change back?
When I moved out of my one bedroom rental, they jacked up the price from $2870 to $3200. I don’t know what will happen to the highend condos but I do expect rents to continue climbing.
I wouldn’t be surprised if many planned condos end up going rental eventually, which is what I believe happened after the 1980s condo boom. That would at least stagnate rents. Either way, even if rents keep climbing, renting still makes more sense in most areas around NYC.
They could just cut the price. These new condos are selling for absurd prices even for Manhattan.
Nice prewar buildings will hold their value pretty well. A lot of these new “luxury condo” developments will become rental apartments instead, and their rents will be plenty high. The real bloodshed will be concentrated in the low-quality buildings, all those “white elephants” built in the 60’s. Everyone who can upgrade will ditch those for the newer buildings (either renting or buying), until only poorer and older people remain in those decaying post-wars. When the trend turns up again in 6 or 7 years, they’ll just knock down those crappy buildings and replace them with new condos, especially in the desirable neighborhoods.
Agreed - those prewars will always be more desireable, I think.
I got two words if you don’t think there is a bubble in NYC. Bed Stuy. My old man worked as a fireman there in the 70’s and he said if you were a white person, you couldn’t walk from one corner to the other corner with out getting mugged. People used to throw rocks and try and firebomb the fire trucks that were putting out fires in their own damn neighborhoods. I know things have changed especially when Guliani took over but my wife worked as a social worker in that area. I am a pretty big guy (6′2, 210 lbs) and I went with her a couple of times and I didn’t want her to go back to work. (This was 1999-2002) There are places going there for the mid $300’s and over!!.
Your post kind of contradicts itself — the fact that places like Bed-Stuy have become less dangerous is often cited as a justification for their higher housing prices.
OT-USA Today Money section-”Definately A Buyers Market”. Talking about the RE market in Las Vegas.
“…many sellers and buyers who are having trouble converging on prices.”
Now that is funny.
(Bed Stuy. There are places going there for the mid $300’s and over!!.)
Hey, there are lots of nice areas in Bed Stuy.
I heard that a house in East New York sold for $500K. On a street where back in the day, there were five murders in a year within three blocks. “Put your lighters up.”
There are many beautiful brownstones in Bed Stuy - loads of them as nice or nicer than Park Slope - & many sales waaaaaaay over 300K - try 500K-750K for better brownstones. Don’t think there is anything priced at 300K there anymore except possible a shell.
East New York & Bushwick are the last frontier in Brooklyn & 500K asking wouldn’t surprise me anywhere - not that I think these asking are sane.
The stock market hasn’t exactly done all that well this year outside of a few commodities. May depress bonuses later this year.
The stockmarket is just one market. There is also the bond market, the FX market and the various commodities markets.
It is quite easy for a professional trader to make money in a falling market. Those who can’t get fired pretty quickly.
Trading revenues are nice, but IBs make most of their money in M&A advisory fees, which are heading for a record high this year. The stock market did not do a thing last year but IB fees/bonuses hit an all-time record. Look for a repeat this year….
if a RE bust can happen on that little island it can happen anywhere. in the city, it truely is different there. people really do want to live there when they move to NYC or “make it.”
According to a recent article in the NY Daily News, from its high in ‘89 to its low in ‘95, prices for Manhattan co-ops dropped 45%. Personally, I didn’t need the article to verify that statistic. Bought a “classic six” a block from Central Park in ‘89, lost my job in ‘94. Couldn’t sell it, then lost it. Last year saw my old apartment advertised for $1.8 mil. Wonder what it ultimately sold for. Just as your readers from So Cal and the Bay Area often note, though real estate prices went through the roof in those locales during the last five years, as desirable as they are, they aren’t 4X more desirable than they were five years ago. The same, I’m afraid, is true of Manhattan.
What did you pay for the place in 89?
“as desirable as they are, they aren’t 4X more desirable than they were five years ago”
Blasphemer! Infidel! This time it’s different!
(According to a recent article in the NY Daily News, from its high in ‘89 to its low in ‘95, prices for Manhattan co-ops dropped 45%.)
There was worse carnage in the outer boroughs, where some buildings were co-oped at the end of the boom and only a few units sold, leaving the owners in a rental building with no one to sell to at all.
True - many greedy sponsors dropped big mortgages on them and ran away with the money - many of these were then taken over by new sponsors in the latest boom and successfully co-oped.
You’ll barf: $380K. When it came time to sell five years later, my agent told me not to expect that kind of money because my 1,500 sq ft apt was on the second floor! That’s what a “bad location” was 11 years ago.
Anyway after living all over town, my next real estate disaster was living in a sky-lighted loft on Liberty St directly across from the WTC on September 11. Lost everything. Again. Have been living happily in rent-stabilized apt just off Riverside in the low 100s for the last three years. Most beautiful ‘hood in the city,IMHO, though the “yuppies” are moving up here, too. To the twin Ariel (get it?) towers on 100th & B’way. Apparently $1.4 mil for a two bedroom is their lowest price. Unfortunate, since until now this lovely part of town had somehow fallen off the radar while Harlem and Brooklyn were taking off. As they say, go figure.
Sorry about your experiances Where exactly was the classic six?
West 71st St just off Columbus. Haven’t walked down that block since I left the place.
The New York market is so non-transparent due to the tremendous effort of all the RE players here to keep their listings to themselves and not have any centralized public access to sales and inventory. The clouds keep the buyers from being able to see what’s really going on.
If New Yorkers had anything approaching the transparency of almost every other USA market, where you can go on the web and look up how much people paid & when for their property, I bet the whole pricing structure would be reduced right off the bat (exactly what RE players don’t want). The amount of money being made here on all these every deal is staggering, and I am sure it is why all the efforts made to conceal & not share the data.
The NY Times regularly provides price per sq. ft. data (which I assume are reliable), so it’s not that hard to get a general feel for historical prices.
Maybe, but Times is a RE shill, and there is nothing like knowing what someone actually paid three months ago for what they are trying to flip you.
I doubt the Times is fabricating sales data.
Not saying that - but they report whatever they want to report - just like any other news - all I’m saying is that this “data” is not quite the same as knowing what any particular thing sold for at a particular time.
Garcap where do you think the Times gets its data? I have found a consistent problem in the Times’s coverage of the market — they tend to only report market problems in the biz section, never in the RE section. The RE section is all about glamorizing the market and pushing people to buy, when it should have been, since last year, about making people aware that the market is out of whack. I remember one particular low point last summer when they did a feature piece about how buyers who put off purchasing have some sort of psychological problem.
This kind of thinly disguised pandering to advertisiers is sadly the state of affairs in many other newspapers. Had it not been for the blogs (especially this one) I never would have know why the market was behaving as it was.
You can look up information on building and condo sales in the city’s ACRIS database. Like everywhere else, deed records are public records. However, coop sales prices are not listed, because technically no deed is transferred, which is partly why the famous & wealthy in New York like coops. However, the city is now making some movement toward having coop sale prices be listed publicly.
Know about Acris - but It’s an arcane look-up - you would have to look up each deed among anything else filed on the property, and to figure out prices you have to flip the pages to the RPPT form and know & do the multipliers on the transfer taxes paid to figure what price was paid - and for condos you need to know the condo unit numbers to even look them up - and like you said - no way to figure co-ops at all - so you basically have a very time consuming process to figure out some of the history, with much of it hard to access and lots of it not accessible at all.
I love ACRIS, but still wish there was a source that gathers data as a whole -it’s a slog to go through property-by-property to get a sense of what’s happening in an entire neighborhood, let alone a boro. The fact remains that the RE cartel here keeps a tight lid on overall data - and what they do release is often heavily spun.
Housegeek - we seem to be on the same page about NYC data dearth & the NY Times cheerleading (to be fair, the Post & News cheerlead as well) - & i agree - it’s only the blogs, especially this one, that gave me the heads up about what is happening in the market. So glad I’m finding this stuff out before doing anything stupid.
Because co-ops are stock transactions, you can never find out what an apartment sold for except through indiscreet brokers. For New York condos and townhouses though you can get that information through PropertyShark.com Just input the address and you’ll find any property’s transaction history, including liens, etc.
Thanks - have to check that out.
If I haven’t supplied you with the righr url, then just go to curbed.com and you’ll find ,the correct address. It’s a great site to know about anyway if you’re interested in New York City real estate.
uuwsg,
Hope you keep posting; it’s nice to hear from someone who’s been around a place like NYC long enough to give a historical perspective.
I live in midtown Manhattan and walk to my office, I rent a larger 1 bedroom condo. My rent is going up 10% this year! I will be paying $3590/month for a place that would cost $1 million to buy (1,050 sq/ft 1.5 bathrooms, luxury doorman, in the heart of midtown ). Though my rent is sickening, for the past four years it wasn’t as bad.
I almost bought two places in 2001 basically before 9/11 - so the prices weren’t depressed. At that time I read a Goldman Sachs study that said nyc real estate was priced at a high per square foot - this was in 2001! I never bought which now looks like a huge mistake as prices in NYC have easily doubled since 2001.
Interestingly my salary (I run a hedge fund) and the salary of all my Wall Street friends have not doubled. Though they all earn a lot of money, it doesn’t go that far in nyc. Also Wall Street job security is fleeting, in 2001 things started to get dicey. Wall Street and the economy were bailed out by the housing bubble.
I read somewhere that in 2000 Wall Street jobs had been like 120% greater than the number historically. To this day that imbalance hasn’t corrected. My point is now that housing is not driving the economy, the market could have problems. If the market has problems, Wall Street will lay people off. People go from making $300 - $700k to basically finding a real job that pays much less. If Wall Street reverts to the norm, NYC prices will fall.
When I first moved to NYC in 1996 my new office friends told me you can’t buy a 1 br or studio because you could never sell it! Now people will say NYC is a lot safer than it was in the 80s and that is correct, but still things change. Not to mention the serious terrorist risk we live with everyday. What if the unthinkable happens? Or even ‘just’ another 9/11 attack?
Because it seems unthinkable and impossible, I think that is the reason NYC prices might come down hard. No one thinks it can happen, and the crowd is rarely correct.
I think we will see 1999 prices eventually, as hard as that is to believe.
Not just in Manhattan, but also the ‘other 4 boros’, Long Island, NJ, & Westchester.
Check out Northern Queens which is the new ‘Brooklyn Heights & Park Slope’. Prices have been skyrocketing in nabes like Jackson Heights, Astoria, Flushing, Woodside, & Bayside. You CANNOT find a one bedroom co-op for less than $300,000 (which is a bargain compared to Manhattan), and when you do you are required to put down 20% at least and have a VERY low DTI ratio.
Jackson Heights and Astoria along with most of northern Queens along the #7 subway line have been 100% yuppiefied and most residents are now single, white, corporate professionals making over $200,000 a year.
The NYC metro area sucks if you are single and make less than $100,000 a year. I am 28, single & make around $75,000 a year which is a lowly salary for someone my age. Even though I have 20% to put down, no one is interested in helping me at my income level. Oh yeah, I guess I should be ashamed to say that I drive a 2000 Nissan Altima with 40,000 miles, do most of my shopping at ‘The GAP’ and even worse sometimes H&M and Old Navy (but I am not a trend whore), pay an unheard of rent of $840 for a studio in Flushing (probably the lowest priced apartment in the boro). But I can’t afford to take a vacation (unless you count taking a subway ride to Coney Island), feel too poor to goto a Yankee game or any club in Manhattan or Queens (even though I could afford to spend $100 on drinks), and would be out of place at any restaurant in Manhattan since I only shop at the places mentioned above.
But it makes no sense to buy a closet sized apartment (and 600 square feet IS NOT a one bedroom) and pay $300,000 for it in Elmhurst + another $600 monthly maintenance) and have to answer to a co-op board. The sheeple yuppies with their daddy’s money for downpayment can waste it on this.
(Interestingly my salary (I run a hedge fund) and the salary of all my Wall Street friends have not doubled. Though they all earn a lot of money, it doesn’t go that far in nyc.)
You mean it doesn’t go far in Midtown. For those of us outside of finance, Manhatttan south of 96th Street has not been an option since the early 1980s.
The securities industry and its employment are cyclical, but the pay is even more cyclical. Basically its new college and grad school recruits who are hired and laid off in droves. For those fully risen up the learning curve with a track record, it’s the income that varies. After all, if you’ve run a hedge fund you can always hang out a shingle.
Bonuses are like housing equity during the bubble — they should be banked or given to charity, not used to upsize one’s lifestyle.