“There Is A Limit To The Sky” In New York
The Queens Chronicle reports from New York. “To hear brokers tell it, now is the best time to take advantage of the 18 month lull in the national housing market and seal the deal on a new home, condo or co op. Likely advice from a real estate agent, maybe, but only a handful of local markets in Queens have stayed hot since the bubble burst last year. In some neighborhoods, prices have dropped anywhere from roughly 5 percent to 10 percent.”
“Above all, brokers say show a little restraint in the home stretch of your search. While prices and interest rates are at a record low this year, the temptation to low ball a seller or toe too hard a line during negotiations should be avoided. And while time is a rare luxury these days, don’t wait too long.”
“‘People have this perception that, because the so called ‘bubble’ has burst, they can just walk in and offer ten to twenty percent less than the market value, and then dillydally while they consider a counter offer,’ broker Tom Vastola said. ‘But when that happens, somebody else usually comes along, sees a reasonable price and takes it.’”
“‘People are getting very good deals. Sellers are thinking that prices could go lower, so they say: ‘Give me an offer that I’m comfortable with and I’ll take it and leave,’ said agent Neal Khoorchand.”
“Khoorchand explained that many Richmond Hill owners still believe they are in the seller’s market of a year and a half ago and have unrealistic expectations, only to watch homes sit on the market for between four and six months. He recently dropped the price of a 2,000 square foot home on a prime 107th Street corner lot from $639,000 to $599,000.”
From Forbes. “When Matthew Haines put his Harlem townhouse up for sale, he still made a crucial mistake. Relying on his broker’s advice, Haines priced the house at $1.675 million–too much in a softening market. ‘People don’t have to fool with sellers who are asking unreasonable prices,’ Haines says.”
“If you’re trying to sell your home in 2007, brokers have one piece of advice: Make sure the price is right. Sellers need to get real, and sometimes that means dropping the price. Unfortunately, many sellers are suffering from housing bust denial. ‘All sellers are human,’ says Sharon E. Baum, a senior VP with Corcoran Real Estate in New York City. ‘Hope springs eternal, right?’”
“Haines had to get rid of his townhouse because he was moving. But the building sat for six months with no buyers. A week ago, his broker called and suggested shaving $100,000 off the price. Haines went even further: He cut the price by $185,000, down to $1,490,000. Within days, two people expressed interest.”
The Hartford Courant from Connecticut. “New England charm has taken Litchfield County far, but that is now faltering when it comes to home sales. Single-family median sales prices in Litchfield slid by more than 8 percent, to $242,700, in the quarter that runs from July through September, compared with the same period in 2005, according to the Warren Group.”
“It is true that Litchfield County, long a magnet for New Yorkers looking to buy weekend getaways, is seeing a significant slowdown in the purchases of second homes after double-digit annual run-ups in enclaves such as Washington, Sharon and Bridgewater.”
“‘There was an expectation that New Yorkers would pay any price,” said (broker) Ted Murphy in Litchfield. ‘But there is a limit to the sky.’”
“Looking deeper into the numbers, the decline is a result of more than New Yorkers retreating to the sidelines, perhaps in hopes that spring will usher in a stronger market.”
“There also has been an overall decline in the appetite for single-family houses priced at $400,000 and above as buyers have turned cautious in the face of possible declines in market prices. Indeed, some sellers in the county have pulled more expensive homes off the market to wait out the current period of uncertainty.”
“(Broker) John Donato in Watertown, agreed that homes at the low end were still moving ‘reasonably well,’ but that the number of homes on the market had increased threefold this year.”
“In the 06779 ZIP code, there were 25 sales, for an 11 percent decline, compared with the third quarter of 2005. The median sales price fell 13 percent, to $203,600, according to the Warren Group.”
“In Watertown’s second ZIP code, there were 34 sales, a decline of 38 percent. The median sales price fell 17 percent, to $255,000.”
“‘The lower-priced houses are the ones that are selling right now,’ said Theresa Gorman, a real estate agent in Watertown. ‘You’re just not seeing a lot of sales over $400,000, and that’s not just in Watertown.’”
My girlfriend and I live in another large city (Chicago). Together we earn over $100,000K a year. We pay some hefty student loans but overall we make a decent buck.
However, we have no interest in buying a condo for at least 6 or 7 years. Until then, we’ll rent. We pay $850 a month and that is a steal.
In fact, half the rentals in my building have been coverted to condos. My exact apartment on the otherside of the courtyard sells for $275K. I did the math and with 10% down and a decent interest rate, PITI + HOA is over $2,250 per month. I pay $850 rent for the exact same unit unrenovated!
Sure, the $275K condo has granite countertops and a Home Depot plastic whirlpool. And a diswasher would be nice. But I can save so much more money, and pay down my student loans, instead of paying the bank interest on a loan to buy a depreciating asset. Long live renters!
That was a great story Chicago guy, I am going to do what your are doing just payoff bills and wait. The market will come to us instead of us going to the market.
Who else is with us.
I’m in LA, paying 1,950 for a rented condo in the Westside. In our building the last units that sold went for 1M. I figure those people are paying close to 6,000 per month. We’re talking young families with newborn kids….
I live in Arlington, VA and make $70K/yr. I’ve been renting the same 2BR, 2BA condo for the past seven years for only $1,025/mo. My next door neighbor in the same size apt pays $2,000/mo, bought in 2005 at the height of the market. I have no incentive to pay twice as much to live in the same size apartment–I’m staying until mortgage payments come in line with rent.
Wait a sec, I thought I was the Chicago guy here.
What neighborhood?
I’ll change my name if you’re Chicago Guy; I’ll be Chicago’s Guy.
Naw, I was just kidding.
Same with me and my wife. While we live in the SF bay area, we chose to live in a cheaper suburb in the East Bay. We make a 6 figure income combined, yet share a house with 2 other people, hence our rent is less than $500, which is rather insanely low even for rent. We save over 70% of our income after taxes, still drive beater cars with close to 200k on them each, only eat out on Saturdays, rarely buy uneccessary crap like Ipods, fancy clothes, etc.
The way I see it, we’re saving the maximum amount of money possible, paying very close attention to the prices, and know exactly what price would be affordable to us including our down payment. That number os around 420k, which given the current prices is around 250-300k cheaper than what homes are currently priced at.
I understand that this downward cycle might take years, but if too many more years pass and prices are still high, the fact that by then we’d easily be able to buy a house in full with plenty leftover for retirement and savings in another state is something to ponder.
jetsonboy,
God love you Sir! We’re going to make you an “Honorary Chicagoan”!
Still, how the hell did you find a $850 a month apt? I would love to find one where I live (NYC). Well, keep on dreaming….
Old Irving
I live in Queens. Nice to know RE agents are just as full of sh*t here as everywhere else. Prices are down 10% to 15%. But houses are still OVERpriced 40% to 50%. They still have a long way down to go.
Hey Mr. Vastola, nothing here is reasonably priced! $600,000 for a 1 family, wood frame, attached POS is not reasonable. Not when it was $250,000 8 years ago.
$1.675M for Harlem!!!!! WTF!!! Where is the ghetto now?
I have friends who moved to Harlem. In two years, their rent for a 2-bed went up to $1,800/mo. and the neighborhood is still dangerous. Their apartment was robbed, and they’ve had guests mugged on the way home. Prices in Harlem are insane, especially considering that the place is still hostile with few stores or other services.
Good catch, txchick. Unbelievable. Harlem’s saving grace is that it was built and occupied by the affluent in the 19th century - you would not believe the quality of the (surviving) housing stock.
At least a million dollar house looks like what a million dollar house is supposed to look like! You just have to get passed the “location” thing!
SOBRO
I am not kidding. They are trying to rebrand the South Bronx as SOBRO.
As in “so broke”?
LOL
Or “So Bro, you spare a dolla?” on your street corner every day from your overly friendly neighborhood crackhead.
finnman,
This is an absolute mystery to me. The whole “rediscovering non-existent roots” thing? There were about two generation’s worth of Americans that had been born and raised in the burbs (and only went “to the city”) on rare occasions like concerts, sporting events etc.
NOW, all of a sudden they’ll just die if they had to live in the burbs! Just look at how hip and “urban” developers are trying to gussy up the burbs? Shopping, Starbucks etc. What a lot of people (myself included) seem to have forgotten is that the WTC was built to re-vitalize a dying “inner city” (which was a dirty word for years btw!)
Just to clarify. Harlem is in Manhattan. Queens is a different area, there’s a reason it’s called an Outer borough.
Not that I disagree that $1.6 mil in Harlem is ridiculous! It is.
That will do wonders for these neighbhoods when all of these barely legal/illegal rental apartments are crammed to the gills with families. The illegal apartment market in Queens has been booming for years. Some of the stuff being rebuilt is downright scary looking.I see a lot of this heading out from Manhattan to LaGuardia.
good example of the cheap and dangerous multifamily homes they are throwing up on these miniscule lots in Queens
http://www.zwire.com/site/news.cfm?newsid=17562988&BRD=2731&PAG=461&dept_id=574907&rfi=6
City Halts Construction On Controversial Building
City officials put the brakes on developer Thomas Huang’s infraction laden construction project in Maspeth last week, revoking his work permits at the site of an unfinished multistory apartment complex.
Officials from the City Buildings Department revoked Huang’s permits to build a three family dwelling at 57 39 Mazeau St. last Sunday, citing his failure to address the nearly two dozen objections leveled against him two weeks ago.
The developer received a two weeks’ warning of the city’s intention to revoke his permits on Nov. 16, after inspectors found 23 infractions at the site, including failure to comply with ventilation specifications, no secondary fire egress in the basement, and construction of bedrooms that were too small to meet basic safety standards.
Two weeks prior to that, the agency slapped Huang with a stop work order at the site for trying to build a four story structure that exceeded the area’s R4 zoning limits. The developer was also fined $2,500 for razing a garage on the property without demolition permits.
“Everything this guy touches turns into a disaster,” said City Councilman Tony Avella (D Bayside) at a public gathering outside the property Saturday morning. “How stupid do we have to be to let him continue to build in this city?”
end italics.
Black Incomes Surpass Whites in Queens
New York Times, October 1, 2006
“In Queens, the median income among black households, nearing $52,000 a year, has surpassed that of whites in 2005, an analysis of new census data shows. No other county in the country with a population over 65,000 can make that claim. The gains among blacks in Queens, the city’s quintessential middle-class borough, were driven largely by the growth of two-parent families and the successes of immigrants from the West Indies. Many live in tidy homes in verdant enclaves like Cambria Heights, Rosedale and Laurelton, just west of the Cross Island Parkway and the border with Nassau County.”
txchick, $1.675 is nothing. There is a new high-rise going up in Harlem now, two doors down from a large homeless shelter (the heartbreaking, drug-addled, and/or surly occupants of which spend a lot of time hanging around on the street right in front of the new building). The cheapest one-bedroom in this joint is $1.5m, and the nicer apartments are going for $4 million. Most if not all have sold…
Please refer.
if you listen to corcoran or douglas elliman harlem is the new
hot spot. and the south bronx thing makes me laugh
nyc is full of transplants from all over the place that come here because of sex and the city and friends. it is pathetic
In the last New York magazine, Jersey City was crowned the new hip upcomign neighborhood.
JERSEY FRIGGIN’ CITY.
http://nymag.com/news/features/25014/index.html
If You Lived Here, You’d Be Cool by Now
Ever get the feeling that the New York of your dreams is happening elsewhere? These days, the half-life of a hotneighborhood can be measured in mere weeks. To find the optimal balance of commodious bistros, tasteful urban decline, and cheap(ish) rent before it disappears, run like hell to…Jersey City?
This graph of ‘hot’ neighborhoods for the past 40 30 years is hysterical. It’s the migration chart of hipster douchebags!
http://nymag.com/images/2/news/06/12/jerser061204_timeline_2000.gif
In the early ’90s, a couple artist friends were urban pioneers in Jersey City. I stayed with them one weekend.
A lot must have happened since then to have earned Jersey City the rep of a hip neighborhood…a whole lot.
I was thinking the same thing. Last time I was in Joisey City it looked like Eastern Europe right after the wall came down.
All over the city they are stretching the new hot spots - from 9th ave crap to Harlem. My friend actually tried to live on 9th (50s or so) and he couldn’t take it. Location, location, location - that doesn’t change. These new hot areas are for suckers.
you’re way out of touch. Harlem started its renaissance over a decade ago…it has some of the best brownstones in NY. Still lousy in parts but there are some great blocks up there.
i hear what you are saying there are some great blocks in harlem with amazing architecture to boot, it is just the surrounding blocks that get me nervous, i am a lfellong ny’er
i know what goes on up in harlem it is not all wine and cheese parties like other parts of the city
as for jersey city the wife and i looked a lillte last year and we said hell no, and those taxes in jersey are ridiculous
sometimes i feel in nyc eis everyone working at goldman sachs, merrill etc and making 300k?
i know a few very high earners but the norm is 100-150k hh income
No one working at Goldman makes that little. Other than the receptionists and copy guys, that is.
I live in Queens. Nice to know RE agents are just as full of sh*t here as everywhere else.
Especially when they dole out great advice such as this:
“Above all, brokers say show a little restraint in the home stretch of your search. While prices and interest rates are at a record low this year, the temptation to low ball a seller or toe too hard a line during negotiations should be avoided. And while time is a rare luxury these days, don’t wait too long.”
Since most members of the REIC live in Opposite World to my reality, I’m going to do exactly the opposite of what these screwballs suggest.
Mr Vastola (the Queens realtor in the article) is suffering from the Housing Bust Denial mentioned in the Forbes piece further down in Ben’s compilation.
Old Irving is that little neighborhood just south and west of Irving Park Road and Pulaski. Most people don’t even know it’s there! But it’s filled with all these beautiful million dollar homes on huge lots. Lots of street parking and very safe. And literally a 1/4 mile walk from the El. That’s where I rent for $850 a month. I could never buy anything in the neighborhood because even Bungalows sells for over $500K!
A lot of the outer neighborhoods have gone up like that. The upshot is there isn’t a whole lot or premium anymore in the better neighborhoods (Gold Coast/LP/Lakeview). IOW for $500K you can still find very mice 2BRs downtown, so if you’re gonna buy, why buy out there?
passthebubbly,
OT, but I did get a call back from “Frankie” and was as usual, harball as ever! (I did get the impression though that in his own way he was tickled that at least someone remembered him from his Merc days!)
Between his time as a trader and working at a tech firm he did a “stint” as a mortgage broker during the great re-fi craze so he was getting a particular kick out of watching Ownit bite the big one! Funny as ever.
Awesome! Maybe I can join you guys in Oregon, if you don’t mind the demand for rental apartments from one extra person. I’m getting sick of waking up to 9 degrees.
Frankie the mortgage broker… doesn’t surprise me.
passthebubbly,
Absolutely! We’d LOVE to have you out here! Most of the sales force in Portland (or the west coast for that matter) is from mid-west/back east. In ways we kind of gravitate toward one another anyway out of a sense of shared values (and work ethic). Rents are cheap and I think Frankie pays….. $575 a mo?
Me? I’m part of a “second migration” of guys from the mid-west that came “out west” to seek their fortune but found themselves doing all the work! Yeah, NS! Loads of “idea junkies” that are certain they’re the next Larry Ellison but it’s beneath their dignity to pick up the phone and try and make a sale! “I’m the idea guy, y o u ‘ r e the s a l e s guy! Uh gosh boss, have you ever actually “sold” anything or have you lived off the drive and desire of mw’s willing to work themselves to death before they come home with their tails between their legs ALL your life? The “second migration” is Vegas. I plan to start spending a lot of time down there soon!
“‘People have this perception that, because the so called ‘bubble’ has burst, they can just walk in and offer ten to twenty percent less than the market value, and then dillydally while they consider a counter offer,’ broker Tom Vastola said. ‘But when that happens, somebody else usually comes along, sees a reasonable price and takes it.’”
Hmm, inventory is still building. Of course a seller will take an offer that they are comfortable with. Problem is, this is a declining market. When I sold my house in Tampa in June of this year, I looked at what the houses were listed at. well, $315k was not moving at all. My RE wanted me to put $15K into the house. Then list it at $310k???? That means I would actually be selling it for $295k - maybe. Get this, the RE didn’t want me listing it for any less and got pissed when I produced an alternate plan: list the house w/o any improvements for $285k. I switched agents, did what I wanted, got it sold in 3 weeks AS IS w/ 5% commision. I had to leave the fridge, washer, and dryer which were old anyway.
If you need to sell, sell the thing. Jeez.
Roidy
Bravo, Roidy. I can’t believe some of the stuff I hear. I’ve sold primary residences, my “home” in the past. Once you’ve made the decision, just dump it for Christ’s sake! I can not imagine having strangers wandering around my “home,” for months, whilest we haggle. No way.
Exactly right. If there are so many buyers waiting to come along, why is there a ONE YEAR supply of houses in queens?
If you read further ….
Khoorchand explained that many Richmond Hill owners still believe they are in the seller’s market of a year and a half ago and have unrealistic expectations, only to watch homes sit on the market for between four and six months.
And after that time, the frustrated seller relents and drops their price or takes the listing off the market. DillyDallying PAYS! and you have 4 - 6 months on a typical overpriced listing to negotiate a better price. Even better wait two to three years and get a much better price.
Wow. I didn’t know there were still houses in the Nutmeg State that were that “cheap”. Still scratching my head over 50s-era tract houses in Norwalk going for $750,000. What are you Fairfield County residents thinking?
I grew up in a 50s-era tract house in Darien. Cost $150K I think in ‘73, and honestly was a completely average Darien house. Fairfield County has never been cheap.
Yeah, but Darien ain’t Norwalk. You’d expect Darien to be expensive and Norwalk to be relatively cheap. Except for Rowayton.
Here’s the house I spent 5 years of my childhood in when we lived in the Frozen North.
http://www.zillow.com/Charts.htm?chartDuration=5years&zpid=58811724
I showed the Zillow estimate to my mom earlier this year and we couldn’t believe this POS house was “valued” at $600,000. Since January it’s taken a big ol’ dump!
Zillow estimates are way off base. BTW, I just checked the whois record on zillow.com and the site owner comes up as “David Lereah.”
…Just kidding
Zillow’s estimates are off but it is still a valuable web site to look up recent comparable sales in the area. This is a good counterbalance measure against comparables your real estate agent may select for you.
“To hear brokers tell it, now is the best time to take advantage of the 18 month lull in the national housing market and seal the deal on a new home, condo or co op. ”
Brokers and agents should have to pass out a disclaimer when showing houses or discussing real estate…… Warning: Real Estate Brokers have a material conflict of interest. I only get paid if you buy the house. Therefore, if you, in any way, rely on my advice you may be subject to losing larges sums of money, which may have an adverse impact on your (and your family’s) financial well being for the rest of your life.
To hear bloggers tell it, now is the worst time to take advantage of the 18 month lull in the national housing market and seal the doom on a new home, condo or co-op.
Ha. “Buyer’s Market!!!” biggest scam out there. Haven’t seen a buyer’s market, YET.
“‘People have this perception that, because the so called ‘bubble’ has burst, they can just walk in and offer ten to twenty percent less than the market value, and then dillydally while they consider a counter offer,’ broker Tom Vastola said. ‘But when that happens, somebody else usually comes along, sees a reasonable price and takes it.’”
Thank your lucky stars that someone else came along. Maybe before you make the mistake again (buying a house in this market) you will get some sense!
You shouldn’t expect to buy a house below market value. This guy is right.
What he fails to recognize though is that market value is set by the (few) buyers, and the market value may be %20 (or more) below the asking price.
You shouldn’t expect to buy a house below market value.
And why the hell not? Houses have been routinely selling for several standard deviations ABOVE anything that could be described as “fair market value” for at least five years now. Why shouldn’t they overshoot the mean/median when the market corrects, as it has in past cycles?
That said, anyone who queues up to buy in bubble regions right now is a falling knife-catcher and pretty much deserves whatever s/he gets. As Robert Cote often says, we should be grateful for falling knife-catchers: they are the ones setting the new comps for us… all the way down.
Unfortunately, many sellers are suffering from housing bust denial. ‘All sellers are human,’ says Sharon E. Baum, a senior VP with Corcoran Real Estate in New York City.”
No all sellers are not human…. take the bank for example!
I live in queens as well and these local realtors are delusional.
that home on 107th street for 600k is in richmond hill which is
not the greatest area. il tell you though these sellers in queens are stuck in april 05 with their prices
any more news on the sub prime lenders folding?
this is my 1st post here but i ahve been lurking and reading for
over 8 months. love this blog and enjoy reading it daily
NYC is so hilarious. I live in midtown (40s) right off Lexington in a super luxury doorman building - essentially right in the heart of midtown, 10 min from Rock Plaza, right next to grand central, in the heart of all the midtwon investment banks. I pay $3,600 a month for 1 bedroom 1050 sq/ft with 1.5 baths - the extra .5 bath makes a world of difference. My rent last year was under $3100 so it did go up a lot and I signed a two year lease. But I moved in around 5 yrs ago started paying 3400 and then it went down to 3050 and now up to 3600 - so over time I have done well there. Again not a care in the world with this building, if a lightbulb goes out they will replace it for you (not that I do that but they would).
Anyway to buy a similar 1 bedroom you are looking at $750,000 min and frankly you won’t get 1050 sq/ft or the great location. Being on 1st ave or 8th ave is a pain in the next when trying to get to work.
When I was looking to buy a few years ago I remember researching condo prices and they were at $600 a sq/ft - at that time an all time high! I have a report from Goldman Sachs and the graphs were crazy - I thought there was no way it could go higher. That is why I rented. In anycase now prices are $1200+ for nice buildings - that won’t last.
Once Wall Street gets a little weak, these prices will come back down. It is tough to imagine them lower than 2000/2001 prices but you never know. NYC is not totally immune.
i agree stock regulator but the kool aid drinkers here feel differently. wall st bonus money in the pipline and the market hitting record highs, blah blah blah all is well keep on building
this city is already in a condo glut.
i work on 24th just off 6th and they are building a new 40 story
‘LUXURY TOWER” just across from the almost completed one on 26th strret on the opposite side of 6th.
well anyway yesterday i ask one of the hardhats is this a rental or condo building? he says oh it is condo’s and then says
like there is not enough already
amen brother
40’s and Lex is a great location?!?! Setting aside how nice the building and services are, you should be paying a very low location premium there. The only two things it’s near are two things you want to avoid: the office and tourists!
Those office building support the rental prices, that is my point. It is a great market to charge the highest rent possible. And yeah when I want to party downtown a few nights a week I can take a cab or subway - but I go to WORK everyday. I would rather walk to work versus ride the gross subway. Midtown is a great area, not that neighborhoody but I could careless about that.
Im in a 2BR/2BA w/ small 6×6 terrace 1100 sf hi floor lux-doorman apartment close to the new UWS Riverside Blvd buildings. I have pretty good river views. I moved in 2002 when they were giving free rent. Took a 2 year lease which worked out to $2850 a month. I’ve taken 1 year renewals since and am up to $3300. If I move out they will jack the rent to $4500/mo at least.
At a nearby Trump condo, a 2BR/2BA 1362sf unit rents for $5450 and an identical unit is on the market for for $1,950,000
I guess I am in a good deal…..
oh, the corcoran listin has the condo at Maint/CC $1,473
Taxes $45 (monthly)
http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=919576
using their mortgage calculator with 10% down
Mortgage Amount: $1,755,000.00
Down Payment : $195,000.00
Mortgage Payment: $11,093.00 per month
Total Monthly Payment: $12,611.00 (with maintenance & taxes)
So it costs you $12,611/month to own or $5450 to rent in the same building, same apartment, same view.
btw, those taxes skyrocket to at least a few thousand a month when the abatement goes away.
I should have been signing two year leases when I was at $3050 and $3200 I would have been very happy. I locked in for two years a few months ago for $3600 and though I am not happy about it I still think I will make out fine.
Again where can a 1000 sq ft 1 bedroom apt go? A family with kids can’t live there - the market is limited.
it depends
when moved from my previous apartment I would say I was in a nicer neighborhood, but only a 780 sf 1BR,1-1/2BA w/ a 6×10 terrace, downtown views. I had moved in close to the top of the tech boom and paid for it at $3600/mo. By early spring 2002, after the Nasdaq crash and 9/11 when the lease was up, they were offering me $3100 a month. I choose to move to a different building more more space and less rent.
A lot can happen in year. If a recession hits with a vengeance or worse, there is another large terrorist attack in NYC, I guarantee your rent would go down.
You also have some great restaurants over there. I ate lunch at the McDonald’s on 44th and Lexington. My BigMac was fantastic.
It is crazy here. The condos are ridiculous. Down by me the lofts at 59 John Street are insane. The 165 Charles Street buildings by Richard Meier defy common sense. The building at 37th and Park Ave. seems completely out of place. Maybe it’s all the scaffolding. There is no condo being constructed for under $800,000. I have nothing more to say about that.
Back in the early-mid 90’s, rent on my 1-bedroom apartment in the East Village, NYC, was about $795 a month. You could get a tiny studio in the West Village for about $45K, and buy a co-op in a not-so-shabby Park Slope building for $125K.
I have no idea what all of those places are going for now, but I’m sure it’s ridiculous.
Why would anyone buy today if inventory is increasing and prices are decreasing? WAIT!
Because as i was told yesterday by a realtor on some nyc blog it is the only way to accumulate equity. lol
forget all my equity in stocks,mutual funds. money market acct etc
no real estate no equity!!!!
these guys are desperate now you can smell it
no way man, I’m gettin’ free granite AND a pool! I’m buyin’ today!
That place has got to be seven figures. And what are taxes and assessments?
Sorry, Finnman, you’ll have to post that last one over. It got eaten by the software.
The one thing NYC has for it versus the 80s and early 90s is you can argue it is safer and more desireable to live in. In the 80s NYC was terrible. But also today we like with a terrisiom risk, a very high risk I would argue - so not sure why prices would be at all time highs.
My point was just that for $3600 you can rent a large 1 bedroom (for NYC) with 1.5 baths and have no worries. Why spend $750k on a 1 bedroom place? The market is limited for a 1 bedroom, how much higher can it every go? This is what happened in the early 1990s when 1 bedrooms were extremely cheap.
$3600 for a one bedroom? That seems really steep, I have a nice pre-war 3BR, 2 full bath on the UWS for less than that, and I just moved in last year.
You are a moron.
Great to see some New Yorkers on this site. I love this blog, but the threads are generally about the real estate markets in California and South Dakota. I grew up in Minneapolis and I can’t for the life of me understand why real estate in SD is so high.
I think South Dakota is not commonly discussed, but SD is often used as an abbreviation for San Diego here. There is definitely a California bias.
Don’t shoot the messenger. Ben would blog stories on Champion, Nebraska if he could find them.
Well, as soon as all the folks who want to live in South Dakota move up there, we will start referring to it as SD.
I am glad that we are beginning to talk about the NYC metro area on this blog. I am sure that readers here are very familiar with The New Jersey Real Estate Report blog, which (true to the title) covers the real estate market in North Jersey. If you aren’t familiar with this blog and are from North Jersey (or are interested in N. Jersey real estate), I highly recommend it. It is full of R/E bears, as well it should be since the NYC metro area has seen just as much (if not more) real estate insanity during this bubble period.
That Jersey City and Hoboken (where I currently live) have been go-go on real estate — and are seen as “trendy and hip” by real estate vultures — has been a source of endless amusement (or disgust, depending on my mood) to me for years now. Both cities have some nice sections, and some nice real estate (including brownstones as nice as anything in the West Village or Brooklyn), but are not worth anything near what real estate agents, flippers, and their ilk think that they are worth. And I haven’t even TOUCHED upon the subject of either the grossly overpriced, tiny walk-ups that have been converted to condos (which were probably crackhouses or environmental brownfields in the not-too-distant past) or the ugly-ass, generic Toll Bros./Hovnanian “luxury” condos springing up all over the waterfront throughout Hudson County. As Elvis Costello once said, “I used to be disgusted, but now I try to be amused.” At least I still rent, I am not dumb enough to buy ANY Hudson County POS at the current prices.
For those with strong stomachs and sick senses of humor, I also “recommend” this website, which is a Hoboken/Jersey City message board basically funded by condo developers and real estate agents in the area. These fools think that it’s still 2005 — i.e., the height of the market when some POS 400 sq. ft. walk-up conversion a block or so from housing projects COULD sell for $350K upwards, and that Hoboken (and Jersey City waterfront) properties are COMPARABLE to Manhattan. Be amused — or angered — as you wish, for these fools are in for a VERY rude awakening. They also censor any messages that are not “rah rah Hudson County real estate!!!” so be warned if you feel the need to counter any nonsense you may read there. (Thankfully, kannekt.com has become a laughingstock at the NJ Real Estate Report blog on account of its censorious real estate cheerleader ways.)
i see the same rah rah stuff on curbed nyc
any bubble talker is quickly dismissed as a
lunatic with a tin-foil hat and the always dreaded
renter or penniless dreamer
i had been looking for a place with my wife for quite awhile
and i just got so frustrated with the whole situation and gave up
we are a childless couple, with good jobs and good credit
we also have a significant cash downpayment with reserves beyond that.
she is pressuring me but i will not make the biggest mistake of my life and commit financial slavery for an overpriced pos
i also was out west in early september (santa monica,venice,san diego) the amount of condo’s in san diego is stagering that place
is going to crash hard, from petco park up to the 5 it was nonstop
new develoement
75% of the posters at curbed have to be brokers and other industry fluffers
Don’t let your wife pressure you into making a mistake. When you factor in costs for NYC apartments, don’t forget to leave out school costs. Pre-k is ultra competitve, to get into. Think about applying to 10 schools at least ($50 applications). A typical 5 day a week 3 hour Pre-k is about $14K a year. Kindergarten is even harder to get into, and starts at $30K a year. Those costs will go up.
That is serious coinage. NYC public schools are a disaster, other than the very special schools like Stuyvestant or Bronx Science which require entrance exams.
NYC public education quality varies a lot - you must be a determined parent to navigate the applications, testing, etc. for admission to “gifted and talented” programs and similar. A decent education can be had but it requires the intellegence and lots of time to find your way through a the bureaucracy. Cannot rely on the district your are assigned to to provide what your kids need.
All that is so true - the Pre-K being ultra competitive is so funny to me, and the money people spend on it is stunning. Look I am not a guy that doesn’t spend or like money, but if you are spending over $10k/$20k or $30k (or even anywhere close) on pre-K you are a moron.
Also let’s not forget the NY mortgage tax - I think like 1.8% of the mortgage - that is a nice fee that hits you when you are about to close.
Oh, it’s not even just the tuition. Many schools expect you to make sizable donations, and parents feel the pressure to write astronomical checks so that the PRE-K admissions head puts in a good word for their kiddies for Kindergarten. NYC has overflowing waterfalls of cash chasing a limited amount of school spots, so money is no object when it comes to buying a ticket for juniors future. If junior does not get into Dalton or Chapin they will never get into Harvard or Princeton and land that Wall Street hedge fund job that allows them to buy a classic 6 on Park Avenue and repeat the cycle all over.
The horror…..the horror.
I hope Ben keeps posting links about the NY/NYC market. I have yet to find any other true active NYC housing bubble blogs. Curbed is the closest, but it is decidely anti-bubble and rah-rah.
I live in bensonhurst, brooklyn and it looks like most of the sellers are still think of 1.5 years back when putting the price on the house for sale
Here’s a very interesting link to a calculator that lets you evaluate renting vs buying in NYC.
http://www.housemath.us/?gclid=CL6czt_sgIkCFQVMVAodrm0Ukg
I too live in Brooklyn and am starved for insight/news on the NYC housing market. Somebody should start a New York City housing bubble blog. I have friends that seem to believe NYC is somehow immune to the laws of supply and demand, and that prices won’t go down really at all. They talk about some BS notion of New York having “international appeal”, and its a “Global City”. True, but irrelevant when talking about prices being well beyond whats affordable even for well paid professionals. As with most places right now, it is indeed much cheaper to rent than to buy. You have nothing to lose by waiting.
I did a lot of my own research on the market here. Based on historical sales prices. Assuming that over the long term real estate appreciates roughly by a bit more than inflation, If you take what properties were going for in 2000 and add on 5% every year for six years, you come to a number that is roughly 40% below current asking prices in Brooklyn, 30-40% below current asking prices on the upper west side of Manhattan, and about 25-30% below Hoboken asking prices.
I’ve also surmised that Brooklyn real estate has already deflated by about 10% since the peak in the fall of 2005.
Therefore, I believe that the correction is gonna be extremely harsh. And its probably going to stretch out through 2008. I’m a happy renter until then.
NYC was a ‘global city’ with ‘international appeal’ when residential property across the city declined in value for several years at the end of the 80’s through the early 90’s.
Who are you and what did you do with myself. I’ve been saying the same f***’ing thing. Brooklyn brownstones for $500K in ‘99 should be worth $750K today assuming 4% inflation, the normal and fundamental home appreciation rate since WWII. That’s why I say about a 50% drop. People keep saying “oh, there’s jobs and less crime” but that’s only from the tech and housing booms. It’s very possible for unemployment and crime to climb again. With respect to the lack of market insight, there’s no multiple listing service and I get the impression that the real estate big girls and boys do a superb job of controlling popular opinion. Other markets have the benefit of hearing about their demise in mainstream media but NYC for some reason is insulated from the truth. Wait’ll the data comes out for YOY sale prices. I think the fact that most do not see the storm coming makes it far worse than it may seem. The same was probably said about ‘88 - ‘93 housing, ‘87 stock crash and NASDAQ. I predict bottom by 2010. Unfortunately, real estate behaves in slow motion. Anybody who’s buying now is either very misinformed or very rich.
“To hear brokers tell it, now is the best time to take advantage of the 18 month lull in the national housing market and seal the deal on a new home, condo or co op.”
As I recall, there was a similar lull on the stock market back on Black Monday, October 19, 1987, as there were no bids forthcoming at the sellers’ wishing prices. I wonder if these shills would have recommended buying stocks on Black Monday (when prices fell 20% on one day before electronic circuit breakers halted trading and AG subsequently flushed liquidity into the market)?