‘Selling More Slowly, And For Less’ In New York
The Finger Lakes Times has this report from New York. “While the surrounding real estate market is cooling a bit, Geneva’s houses continue selling at relatively high prices, buoyed by out-of-state investors with deep pockets. So far this year, though, property is selling more slowly, and for less.”
“‘For the past couple years, the market’s been so great, and now we’re seeing more of a normal market,’ said Matthew Parrott, an associate broker. ‘It’s not that it’s down, but compared to the last few years, it’s normalized.’”
“The Rochester association’s statistics show the average sale price of a home in Geneva was around $116,008 last year. Numbers compiled by Parrott indicate the average sales price dropped slightly in the first half of 2006 to around $112,700.”
“Debra Dorn of Coldwell Banker attributed the falling prices to the perception of a lagging market, rising interest rates and jitters over the economy. ‘The media in general constantly talks about the housing market, mostly in a negative way,’ she said, adding that has an effect on buyers.”
“Whatever the reason, she said single-family homes are selling for less than they have in the last few years and have stayed on the market for more than 90 days, an industry benchmark. ‘It is what it is,’ she said. ‘What it’ll turn out to be, I won’t even speculate.’”
“Another reason for the drop in housing prices is the sheer number of homes on the market, said broker Steve Davoli. ‘We have a slightly higher inventory than we had last year,’ he said. ‘When you have more property, you get lower prices. It’s supply and demand.’”
“Davoli said that the second quarter statistics aren’t out yet, but the Rochester association’s figures show a jump in the number of houses on the market, from 96 in 2001 to 207 last year.”
“In hot real estate markets, it’s not unusual for neighbors to put their homes on the market, just to see how much they can get for them, Davoli said. The glut of homes in turn drives down prices over time, he said.”
A related link:
‘The Big Apple’s residential building boom is reaching historic proportions, with developers last year planning five times more private housing units citywide than a decade ago. The city issued building permits for 31,599 new residential units - up 25 percent from 2004, 87 percent from 2001 and 515 percent from the paltry 5,135 units constructed in 1995.’
I would say that this is a good thing because NYC needs affordable housing. Problem is I don’t know how “affordable” this new housing will be until after the crash. Even then it will probably be out of reach to the average middle class person because there is always some middle man to get in there first. The whole system is corrupt. Alas.
“The whole system is corrupt “.
No truer words spoken Mort .
I live in NYC. All these new projects (and they sure are overbuilding) have the word “Luxury” in front of them!
31,000 new units isn’t such a huge number if you consider that the population of NYC is 8 million.
BTW The vacancy rate in “luxury” rental buildings in Manhattan is 0.5% right now and rents are climbing sharply as a result.
the good thing about this bubble is that we have built alot of housing.buying a home these days is like buying a new car.its worth less as soon as you drive it off the lot and worth alot less in five years.
It’s simple economics really. When the price of anything becomes artificially inflated, the marketplace over-produces that item.
“In hot real estate markets, it’s not unusual for neighbors to put their homes on the market, just to see how much they can get for them, Davoli said. The glut of homes in turn drives down prices over time, he said.”
“Another reason for the drop in housing prices is the sheer number of homes on the market
“Whatever the reason, she said single-family homes are selling for less than they have in the last few years
Geneva’s houses continue selling at relatively high prices, buoyed by out-of-state investors with deep pockets. So far this year, though, property is selling more slowly, and for less.”
can someone please tell these “agents” had they passed their class in economics 101 before they dropped out of college they would have a better grip on what is about to happen
Upstate and downstate are both bad
I just got back from the Hamptons and it seems like half of it is for sale. From Remsenberg to East Hampton it looks like a firesale.
Also walked by the realtor offices in the towns and they were complete ghost towns.
Love the screen name!
:roflol:
:wtf:
not working!
:p
how about
emoticons notall on!
Just to provide a little context — Geneva is about a 6 hour drive northwest of NYC, about halfway between Rochester and Syracuse. So, its housing market is more representative of rural NY than the metro area. There are lots of small towns like Geneva in central NY, with 5-25K residents, and almost none of them are doing well economically. Most of the manufacturing jobs that once supported the area have been sent overseas. I heard that the 20-35 year old population in upstate NY is declining by something ridiculous like 20% a year, mainly due to the lack of economic opportunity.
A few towns like Ithaca have managed to prosper (almost entirely because of Cornell University and Ithaca College). Housing has become very expensive there (relatively speaking), with double digit appreciation in the last few years. As in so many other markets, however, things have cooled a lot this year. Sellers are expecting last year’s prices, and buyers can’t or aren’t willing to pay at that level. Nobody’s budging, and inventory is growing (about 20% over last year, I was told last month).
(There are lots of small towns like Geneva in central NY, with 5-25K residents, and almost none of them are doing well economically. Most of the manufacturing jobs that once supported the area have been sent overseas. I heard that the 20-35 year old population in upstate NY is declining by something ridiculous like 20% a year, mainly due to the lack of economic opportunity.)
upstate NY has been hit hard the last 20-30 years because the manufacturing base has moved and the farm sector doesn’t react well to lower prices. most of the younger population moves for jobs but also because people want to live where things are happening.
I was one of those 20-25 year olds who left Upstate NY. After college I couldn’t find good work for the life of me. Nevertheless I envy my friends who were able to find good jobs there.
New York state just doesn’t get it. It’s probably the worst state in the nation to do business, unless you’re an ad agency or an investment bank in NYC. It has high taxes on income (personal and corporate), property, and sales. Not to mention that insurance and regulatory costs are sky high. The state government just doesn’t understand (or care) that it’s a crappy place to do business. Someday it will only be retirees living there.
no dude, CT is - companies leaving in droves
:rolleyes:
Yes, it seems that things are still doing well here, unfortunately. There was a lot of real estate for sale at the beginning of summer, but much of it seems sold now. Summer IS the buying season here because you have new faculty coming in for the next year.
I guess it will be another year or so before we start to see affects. I assume we will, because I know faculty here that are as overextended as they are any place else. And forget trying to rent in Ithaca. The town is 60% rental properties as it is.
Most of the manufacturing jobs that once supported the area have been sent overseas. I heard that the 20-35 year old population in upstate NY is declining by something ridiculous like 20% a year, mainly due to the lack of economic opportunity.
Those jobs don’t have to go overseas. Lowtaxland, USA is sufficient! All a corporate exec or biz owner has to do is look at the taxfoundation website and see that the state of NY is at or near the bottom of the list when it comes to all forms of taxation!
‘The media in general constantly talks about the housing market, mostly in a negative way,’ she said, adding that has an effect on buyers.”
Always blaming the media, never that prices are no longer affordable.
Simmssays…10 Things That Show We are Free
http://www.americaninventorspot.com/wacky_free
If people can’t afford steak they start buying chicken . Isn’t that the “elastic theory “,(or something like that ). In other words it will reach a point where it doesn’t matter how much suppy of homes is on the market,(even if some of the inventory is absorbed ), because the affordability issue will rear it’s ugly head .This will happen in Southern Ca. even with the inventory being lower than other states .We actually reached that point a number of times in this real estate cycle but Lenders just kept lowering the underwriting standards on loans . The Lenders are already putting people on loans they can’t afford with no down payments .
Same with cars. Are they going to go to 20 year ARM loans on cars ?
How much longer can this go on ? I don’t think people will be able to even afford 5% appreciation on a 700K /800k home in So. California along with the increased taxes/insurance .
Wiz - good questions. I doubt the lending industry today has given any thought at all to the possibility of housing remaining a depreciating asset in the post-bubble, non-speculative era 10-20 years down the road. But it would seem that they must, and better sooner than later, since a whole lotta MBS bag holders who get screwed in this bust are going to close those formerly fat wallets. Used-house prices should take a relatively greater beating as people figure out that used is not just about as valuable as new, once the underlying value of the land is separated from the pricing. Nevertheless, I don’t mean to understimate the importance of the land in the equation.
If you can readily separate the value of the underlying land from the value of the structure, then for the foreseeable future the market value of the structure should be depreciating — this bubble burst being a great catalyst for changing the thought process of many potential buyers and, presumably, sellers.
Sorry — meant to delete the second paragraph — redundant.
That’s the BIS’s infamous “substitution theory”, one of many scams they intentionally use to pretend that inflation is lower than it actually is.
(BTW, I saw somewhere the other day that they’re thinking of toying with the “rent and rental equivalent” part of the CPI — only now, of course, after it’s served its purpose in keeping the CPI artificially lower than it should have been all through the housing boom.)
double BINGO
BLS will switch to home prices instead of rents next year -bet on it
OT but RE related:
http://www.nytimes.com/aponline/business/AP-Japan-Economy.html
Japan is ending ZIRP. The carry trade may be winding down shortly.
Japan saved” jobs and has free health care- watch the left demand both of these goodies in the next election cycle
OT, but breaking news - the yen carry trade may be ending soon:
http://www.nytimes.com/aponline/business/AP-Japan-Economy.html
ZIRP is ending.
Wonder if we’ll be seeing 1 year yields above the 30 year as this unwinds. The 2 year is already nudging.
http://www.bloomberg.com/markets/rates/index.html
I meant the 3.
Spent last weekend in Syracuse to help my dad celebrate his 89th birthday. My sister lives in Skaneateles, where my father lived for 40 years. Seems half of Skaneateles is for sale, this after a sharp runup of housing prices over the past 10 years. In addition to the dampening on the market due to the rise in interest rates, there is a another factor forcing people–especially longterm residents–to sell: property taxes are tied to appraised value of the house. Regular folks simply are unable to pay their property taxes, which have tripled in most cases.
Guess Skaneateles’ residential market will depend on how many Bushite tax cutters there are left to pay the overinflated prices.
Sounds to me like it’s time to un-elect the people in the city, county or state who are keeping the property tax rates up, instead of reducing them to essentially zero-sum.
From a paper from near the “Southern Tier” — 50 miles from Geneva
“One Hot Parade
One final thought about the parade…..We miss you Mrs. Lenore Bujno!! In the good old days our town band was well over 100 members strong, walking in straight lines, everyone on their left foot, dressed in wool uniforms with our t-shirts tucked in, with our instrument up and ready to play at any moment. She didn’t miss a trick . . . She ran one sharp unit for many years!!
There used to be a grade school band, a junior high school band, and the high school band, what has happened with the Wellsboro music programs? Is participation in the school band being encouraged, or is it falling victim to school budget cuts?
Which, as I sit here typing this, I hear on the radio that the Wellsboro school budget has increased ($19.8 million) and a motion to raise taxes was approved.
Maybe we should have somehow displayed our great new school in the parade, thus permitting all those that traveled to Wellsboro for the annual Laurel Festival to see why so many houses are now on the market and people are complaining about the cost of living in this area. As I recently motored down one of the side streets and up East Avenue on my motorcycle, I counted 13 homes on the market. That was just two streets in town.
It seems, that the select few that make all of the decisions for our community, our schools, and our wallets, and they are losing track of what is really important. And that is those of us that live here: your friends and your neighbors.
Curt Runyan
Wellsboro”
http://www.tiogapublishing.com/articles/2006/06/29/opinion/opinion01.txt