What area of NYC (include "it" areas) will see the biggest declines in the next year?

Financial District

Harlem
Lower East Side
Washington Heights/ Inwood

I'd even throw Chelsea in there. Lots of stuff coming on the market. A lot of Williamsburg too, especially east of the BQE and southside.

LIC - anything away from the main water front, especially close to the Queensborough bridge.

I think Financial might actually be a little better than others because the actual neighborhood is improving. in 5 years, it will look different, so I think that might offset some loss (but there will still be loss0.

Biggest spots for decline overall..... I'm going by where a condo would decline the most %-wise, from 2007 to say 2009

Williamsburg (particularly the "adjacent" parts)
DUMBO
East Village (for prime stuff)
Chelsea (maybe the worst in Manhattan)
Far West Village (water, far from trains)
East 40/50s
Anything "luxury" in brooklyn neighborhoods more than 30 minutes from Manhattan...

I think upper east/upper west are going to have some pretty big tanking overall... but it will be in spots and in particular buildings, averaged out by some of the older stuff

no question - Harlem luxury condos
and they'll come back strong when this is over

Anything north of 90th Street is toast!

I think Manhattan brownstones will do good in this market, even those in Harlem that have been updated. Now Brooklyn brownstones in fringe neighborhoods like Bed Stuy will get toasted. Easily 20% declines.

i'd have to agree about harlem.

in my opinion, the decreases would somewhat resemble what occurred in the early 1990s during the last Manhattan bust. what areas where hardest hit back then?

Once you guys are done with your predictions, you can comapre your answers with what this NY Magazine article from last September found:

http://nymag.com/realestate/features/37656/

1.) Prime Village/West Village.

2.) Fifth and Park Avenues from 60th to 86th.

3.) CPW from 60th to 86th.

4.) TriBeCa.

Down - 30% - 40% - 50% - maybe more, even.

I SO disagree with that malraux.

malraux: Tongue in cheek, perhaps? It would be sweet if CPW fell 50%. Then maybe we could afford a second-floor 2BR with a westward view of an alley full of garbage cans!

MMAfia, historically it has always depended on which neighborhoods were included in the boom. By the late 80s-early 90s, for example, the east village, alphabet city, lower east side and Hell's Kitchen had not yet been swept up in the coop/conversion/building boom, and remained relatively underpriced both for rentals and the limited purchasing stock available. Other areas had significant deflation because of economic conditions. I left NYC in 1990 for four years because I couldn't take the conditions, but I think now is different because we have had such widespread development of relatively marginal areas (Central and East Harlem, illiamsburgh, DUMBO, LIC, and other areas of Brooklyn, the Bronx, and Queens. I was stunned tosee all the development in the Ft. Green/Clinton Hill area.) I am not certain how this will all shake out, but it may be a long shake out.

aboutready, you're probably right. comparing directly to the 90's bust may not be accurate. i do think the areas that held up the best will also hold up the best this time around though.

alpine292, thanks for that link. very interesting.

MM: "what areas where hardest hit back then?"

All areas in the five boros.
The question is which recovered first and how strongly.
Neighborhoods are different now.
People in the most recently "gentrified" areas give up,
and the influx of people forced out of their preferred
neighborhoods comes to a stop.

I recall there being a shift in Nassau and Suffolk Counties,
with the furthest out towns getting hit hardest.

It's a little hard to compare to the late 80s/early 90s because neighborhoods are so much more homogenized now, and so much "better" -- but in that dip we saw, at least downtown, a segmentation by building. There was a real flight to quality, and the "A" buildings -- the Brevoort on Lower Fifth Avenue, say -- never suffered as badly as the "B" buildings did.

So many new condos have gone up in the past ten years it will be interesting to see what happens. Is the Orion on 42nd an "A" building or a "B" building? What about One Morton Square? Those buildings don't really have a track record so it's hard to call.

Also, in the late 80's/90s dip studios -- which at that point were not considered fit housing for two adults -- tanked. (I bought a Chelsea doorman studio in '96 for roughly half of what the owners had paid for it in the late 80s.) One-bedrooms, though, held up a little better, because they were often supported by two incomes.

For various reasons, one of them being the strength of the pied-a-terre market, I think that will probably flip in this downturn. Right now it looks like there's a lot of one-bedroom product on the market that isn't moving, while studios seem to be holding.

ali r.
{downtown broker}

1)Long Island City
2)Williamsburg

It seems like the main reason to live in LIC is that it's cheaper than Manhattan and more grown up than Williamsburg. Over the next few years people with purchasing power, any purchasing power at all, will be able to buy where they want to live not where they have to live. $600K-$800K will be do-able in Manhattan. I was in LIC today and I felt like I was in Brasillia.

What makes a "bust"..if a one bedroom bought in the west village for $125k is now worth $700k and the bust brings the price down to $600k it's still a huge profit.

julia, "bust" is very debatable. Even "recession" is not exactly clear, although there is some consensus around a couple of consecutive quarters of negative growth. At least "bear" is well defined at 20% drop from the peak.

One thing that's pretty clear is time frame, and that's YoY as month-to-month is too volatile and suspect to seasonal differences.

lowery, do you recall what the shifts were in LI (Nassau and Suffolk)?

Washington Heights will be ok. It never swings high or low. I've been buying up there for years. All steady appreciation. In addition, the sheer size of most of the apartments is building a healthy fmaily base.

Julia: agreed 100%

Highly unlikely the prices will go to 1998 levels. If you bought then, you're Golden. If you bought in the last 3 years, however, it's a different story.

I have to disagree eah. I'm looking to buy in the Heights and recently came across a one-bedroom renting for $1400 or asking $340k plus $550 in maint - how is that not bubblicious?

Fire Island where Steve and the Brazilian day traders live.

did i mention that Alpine has no concept of NYC RE? He predicts the LES to have the biggest decline????

The LES will have the largest YOY increase in all of manhattan.

a suburban loser who acts likes he knows the city.

HI I am a suburban moron named Alpine and since I heard that the LES has had large YOY gains and dont know anything about the current market, development, rezoning, culture of the LES; I am going to say that it will have the largest decrease in RE sales prices and I am willing to bet anyone $10K on the outcome.

Your_Landlord, I thought you were Sneaky Pete, for a second

80s man I thought that you knew what you were talking about, for a second.

MM - Long Island - new subdivisions during "good" years attracted buyers, but then went down in price during "bad" years - I'm probably conflating the talk about "oil shock" days of the '70s -- anything near the city line (New Hyde Park, Mineola....) became the popular place to buy a house during the "bad" years, especially the "oil shock" days, and the further out you got, the worse the downturn in home resales.

Another thing that happened in the '90s - young couples with kids who had started out in Forest Hills coops hoping to resell them for more money and get into LI houses instead had to sublet the coops and rent houses in Nassau County when they outgrew their FH coops.

Now that we're freaking out over gas and petroleum prices, I'm betting the same thing will happen -- the closer one is to the city line the better. Houses, especially new subdivisions, out in Suffolk County bought by Manhattan workers ...... ouch!

Fire Island? Oh, dear........... my sympathies.

Seems as if transportation will create problems outside of NYC. NYC will hold up relatively better than outside of NYC.

It will be the area that houses the most people employed on wall street. Oh, that would be the Island of Manhattan, Downtown Brooklyn (and the surrounding area) and LIC.

yep, the urban sprawl is here. in manhattan, you don't depend on oil to get around. if you're lucky, you don't depend on the train either.

Oh my lord, how could I forget... the #1 decline is clearly going to be Long Island City. SO much inventory, so little going for it.

In 2003 LIC was selling for $350 psf. I wouldn't buy then for $350 per square foot. I wouldn't buy it today for $350 sq ft. Why would anyone want to live in an apartment in Queens? Have to, sure, but want to?

LIC was built to catch the run-off from Manhattan. When all the Manhattan buildings were sold-out pre-construction. There is no other reason for LIC to exist.

LIC will be fine, to the consternation of all you haters. There is a non-market based reason for its growth - zoning changes and new development. It is going from near-zero residential to a major residential area. As more people move there, it will become more desirable. If you can't see why people would want to live in luxury waterfront condos with skyline views 5 minutes from midtown, you are jaded. LIC prices will track Manhattan prices. They are at 60-70% of comparable Manhattan prices now, and will probably be 70-80% in a few years. The prices may go up or down depending on the Manhattan market, but they will correlate.

"LIC prices will track Manhattan prices."

Yup. Down.

Did I mention LIC is a dive? Even when my grandmother lived there. Elevated trains and housing projects in an industrial, deserted, barren wasteland of a hellhole, where there is nothing to do.

Neighborhoods are not created by views of places where people REALLY want to be: Manhattan. Views of Manhattan do not make people move to Jersey City. People move to places where there's something to do at night - or during the day. Roosevelt Island is far nicer than LIC, and my father and some of my cousins graduated from Long Island City High.

steve, for the first time I must say, you confirmed that you absolutely are an idiot. Have you even been to LIC in the last year? Thanks for showing anyone who knows anything how incredibly out-of-touch and old you really are. People don't care about great views when they decide where to live - another genius comment from steve.

"you absolutely are an idiot."

Thanks!

"Have you even been to LIC in the last year?"

Yes, and I was in one of those condos with the luxury view of Manhattan. It was cold, faceless, barren, there was nothing to do, not even a grocery store. And a friend of mine went more recently to see yet another overpriced condo with luxury views, and said, "Never!" Established neighborhoods are what people pay for, gentrification works only where there's something to gentrify. There are far nicer places in Brooklyn, Bronx, and even Queens itself.

You resort to insults because you don't like it when people tell you the truth: you made a HUGE mistake moving to Long Island City, overpaying for a cookie-cutter apartment with a view of where you're going to have to go every Friday and Saturday to have something to do.

Sorry, the truth hurts.

Wait a second, did I touch a nerve steve. Maybe you are hating on an area that is attracting a lot of young, successful professionals who are enjoying their life. You're probably bitter that things have passed you by.
Nothing to do? Lots of great restaurants,cafes, lounges, bars, PS1, art galleries, Water Taxi Beach, tennis, etc. Every month another new place opens. There are lots of groceries, Amish Market and Duane Reade are about to open.
You think everything is overpriced, and you have been made to look stupid and disingenuious many a time on this site.
Cookie cutter. Whatever. That is a common statement about any new condo building. The same developers, architects and designers working on the new LIC buildings are putting up many of the new buildings in Manhattan.
Now I see why everyone constantly mocks you, a fool as arrogant and wrong as you is an easy target.

"Water Taxi Beach."

There's something to do.

"Duane Reade [...] about to open."

WOW! A Duane Reade! Dude, you hit one hell of a neighborhood!

"did I touch a nerve steve"

Nope.

"You think everything is overpriced."

Most everything, not everything. But true for the market as a whole.

"you have been made to look stupid and disingenuious many a time on this site."

Never once by anybody who's put down a number or a theory to support these price levels. Only by those who have "gut feelings" about things like you.

"an area that is attracting a lot of young, successful professionals who are enjoying their life."

All of them? Not one depressed person in LIC? Let's change the name to Utopia. No, that's taken. How's about Euphoria?

"You're probably bitter that things have passed you by.?

What, exactly, has passed me by? The opportunity to buy vastly overpriced property that I can rent at half the cost? Glad it did. The opportunity to sell a vastly overpriced property to someone who was going to flip it, and has now lost $300,000, 30% of what she paid for it?

Nope. Did that one, too.

BTW if LIC is such a grand place, why do you constantly post on threads related to Manhattan real estate? You must have neighborhood envy.

I have a new idea for a name for LIC: Down Under the Triboro Bridge Overpass. DUTBO. Then you can finance your apartment through WaMu, and complete the circle of ridiculous purchases with one of ridiculous names of dubious value.

"Never once by anybody who's put down a number or a theory to support these price levels. Only by those who have "gut feelings" about things like you."

I made you look stupid on the "Buy or Rent" thread the other day, with actual realistic numbers and not the isolated, misleading figures you love to throw around. Also, don't forget how everyone had to school you on the marginal v. effective tax rate issue.

This site covers lots of areas steve, not just Manhattan. Do you wear reading glasses?

LIC is near the Queensboro Bridge, not the Triboro. That's Astoria. Do you usually get things mixed up in your head like that?

"What, exactly, has passed me by?" - Youth, steve. You are a cranky old man. Please hole up in your apartment in Chelsea and let the young people have their fun.

"I made you look stupid on the "Buy or Rent" thread the other day, with actual realistic numbers and not the isolated, misleading figures you love to throw around."

I missed that post, so please point out where it is. I wasn't posting for a week or so.

"Also, don't forget how everyone had to school you on the marginal v. effective tax rate issue."

Oh I do recall that! I recall that I pointed you to this:

www.ny.frb.org/research/staff_reports/sr218.pdf

A Federal Reserve staff paper, which specifically says:

"The third component is actually an offsetting benefit to owning, namely, the tax deductibility of
mortgage interest and property taxes for filers who itemize on their federal income taxes.
This can be estimated as the effective tax rate on income times the estimated mortgage and property tax payments."

Ergo according to you, you made a fool out of me because I said that tax benefits are calculated using your effective tax rate - which is what the Federal Reserve says - and you say they're calculated using your marginal tax rate.

Neat-o logic.

"Please hole up in your apartment in Chelsea and let the young people have their fun."

Actually, I'm in my vacation home on Fire Island looking at the Great South Bay right now. Affordable precisely because I piss my rent money away.

Are you at Water Taxi Beach?

The Hamptons this weekend, I've never been to Fire Island. How is it out there? I've heard its more low-key.

And no I didn't confuse Astoria and LIC b/c I was born in Astoria and my grandparents lived off of 21st Street in Long Island City. But if you want to call it Down Under the Queensboro Bridge Overpass - DUQBO - I'm quite pleased with that, as well.

"I've heard its more low-key."

Apparently you haven't been here. It's one constant party.

Why don't we just keep calling it LIC?

I just said I've never been to Fire Island. Is it mostly casual beach bars?

I kind of like DUQBO.

No comment on the Fed's use of the effective tax rate?

No link to where you posted "real" numbers?

You can learn about Fire Island here:

http://www.fireisland.com/towns.php

steve, I've linked to the thread before. Instead of reading another post, why don't you look at the actual numbers and make your own determination. Of course, you would have to admit you were wrong if you did that.

Just go click on the "Buy or Rent" thread to see the comments.

"Instead of reading another post, why don't you look at the actual numbers and make your own determination."

I did, and they're clear.

Just as the use of the effective tax rate is clear.

LIC is not that bad. New luxury buildings. Great transportation, but I wouldn't live there without a car.

Your (Stupid) Landlord,

I think I know the LES pretty well. I have lived there for 13 years. Why will it have the largest YOY increase? Is there a large number of new devleopments down there that are going to come online? Is the city going to tear down the housing projects and replace them with 15 CPW style luxury housing? WHat on earth would possibly cause prices to go up?

Landlord,

If prices are rising in the LES so much, perhaps you should tell that to my old friend who is trying to sell D607 at 417 Grand Street:

07/13/2007 Listed in StreetEasy with Nestseekers at $849,000
08/06/2007 Price decreased to $825,000
08/27/2007 Listing no longer available
09/14/2007 Price decreased to $775,000
09/19/2007 Price increased to $825,000
09/20/2007 Price decreased to $799,000
12/21/2007 Price decreased to $795,000
05/16/2008 Listed in StreetEasy with Corcoran at $799,000
07/08/2008 Price decreased to $775,000

HI I am a city moron named Your_Landlord and since I heard that the LES has had large YOY gains and dont know anything about the current market, development, rezoning, culture of the LES; I am going to say that it will have the largest increase in RE sales prices and I am willing to bet anyone $10K on the outcome.

"The LES will have the largest YOY increase in all of manhattan."

Isn't the LES full of dilapidated tenements and projects?

Surely the projects won't show a YOY increase.

And tenements....

Your_Landlord is petrfitz aka Sneaky Pete on Curbed. If there is such a thing as a blog-fingerprint (blogerr-print?), a way to positively identify a person based on their posts, this is case in point. Unless there are two $10MM real estate barons out there with holdings in Vegas and LES who laugh at the peasants who pay rent...

LICComment- "It is going from near-zero residential to a major residential area"

How many years has it taken to get to this point? CL was opened how long ago? The are is still waiting for a supermarket. I know it's coming any day now. What is this credit crisis going to do to that area or any other developing area in the future. Some experts believe that this mess will be with us for at least 5 years. How much longer are people willing to wait for an area to develop? I agree 100% with steve, the view is great, however ironically they are looking at the city they rather be living in. The prices don't support the lack of neighborhood. Supply will increase at least 3X the current amount in the next 12 months.

The same thing goes for the Brooklyn waterfront in Williamsburg. The amount of supply is insane for even the best of markets. I would estimate that tightening lending standards will eliminate at least 50% of potential buyer for these areas. If the developers don't get the message soon and start to lower their asking prices significantly, Brooklyn and LIC will look just like Miami with empty buildings.

But Steve, all thsoe LES tenements and projects are going to to demolished and replaced with multi million dollar condos for rich Wall St. people. Buy now before prices skyrocket and you are priced out forever!!!

Sorry, I was drinking the LoHo Realty Kool Aid. My bad...

The only thing on the LES that is going to see a YOY increase are Section 8 rents.

LIC has no parks on green outdoor space. Water Taxi Beach appears to be a glorified bar, no? At least Williamsburg has McCarren and East River State parks. Maybe not the best parks in the city, but at least something. I still think of LIC as a mini-Sao Paulo.

Long Island City needs to change its name. DUQBO. It's perfect.

I heard - and it's only rumor - that they're going to remake "Room With A View" and site it in DUQBO instead of Florence. I've been to both places - def see the similarity. Esp. the bridges.

Actually, the Museum of the Tenement (there really is one) is in the LES. The best part of that neighborhood is that lovely approach to the Brooklyn Bridge. Second best is the smell of the Chinatown fish shops when the wind blows the wrong way. Then there's the nearby and never-going-away projects.

My father was born in Little Italy. Like George Jefferson they moved on up - but to the projects in Long Island City. So it would seem that LICC is correct; DUQBO is better than the LES.

The LES is the #1 destination where celebrities to buy their crack. The only nice part of the neighborhood is Little Italy. It's a nice area to go on a Saturday night, but you would not want to live there.

Oh, and ever since the beginning of time, people have been spreading propaganda that the housing projects are going to be sold and demolished. Everyone is aware of the plans to tear down the projects EXCEPT THE CITY!!!

I knew a real estate agent who told a friend of mine that they were going to tear down the Robert Fulton Houses in Chelsea, so he'd buy across the street. 10 years later, they're still there.

NYC has the best run public housing in the country. It's not Chicago, it's not New Orleans. Those projects are around forever, because some (not me) like the concept of mixed income neighborhoods.

Too bad nobody who lives in the Robert Fulton Houses can afford to buy anything in the neighborhood. Even Western Beef is gone, and it's the new Apple Store.

BTW Little Italy now consists of 1 block of restaurants. The rest is Chinatown.

Yes YourLandlord is Sneaky Pete aka petrfitz:

1) LES
2) dont know anything about the current market

BUT MOST OF ALL:

3)rezoning.

The LES has been rezoned: from crap to shit.

The LES has always been a low income working class/ immigrant community. Except for the new "Blue" condo building they built recently, nobody with big money buys there.

I've got a great new name for LIC:

District of Overbuilt Underserviced Condo Housing Eyesores Between Astoria/Greenpoint

you figure it out

Faustus - hilarious!

I love that faustus!

Williamsburg. OVERHYPED!

When is the best time to buy anyway? There is no question we're buying just not sure how long we should wait. It would be difficult to time the bottom but should we pretty much wait till next year?

cleanslate, take your time. Though I think this correction will happen relatively quickly, in the building in South Beach where I sold my condo for $1 million 2.5 years ago, the one two floors above mine is for sale for $697k, but the one directly above mine is for sale for $989k. Yet another in the same line is for sale for $699k.

If an apartment can't sell for $697k, why would the owner of an identical apartment ask $989k? Because falling markets aren't rational: the owner of the $989 apartment refuses to believe that when he held out for $1.1 million when my buyer offered $1 million to him, that that was his last opportunity ever to make money. Those apartments are headed down to $550k, and even then they're overprice. They're worth about $350k.

cleanslate- It's not as difficult to time a bottom as you think. Answer this question. Is it more likely prices will go up or down? Your answer will tell you what "you think", you should do. Me wouldn't even consider it until prices decrease at least 30% compared to what they sold for last year. It's just starting. The job loses will be tremendous by years end and those who still have a job will be working for a fraction of what they made last year. Many will get almost a Zero bonus. It's going to get really bad. Good Luck.

I can't believe it but I actually enjoyed one of faustus' posts.

LIC will track JERSEY CITY prices, not Manhattan prices. You're talking about basically the same neighborhood - both have very little going for them except what they are near/look at. They're Brooklyn without, well, culture, restaurants, or, hell, any of the reasons folks move to "the city". Maybe LIC can get a 10% bump because folks can claim they "live in NYC".... but the building glut there will EASILY take care of that.

I agree, the prices are going down but for how long? Is there like a time frame for this? Unfortunately, waiting for 30% decline may not happen in good areas. And maybe it will, but when would that be and how long do we have to wait for that?

We're all waiting for opportunities it seems like. Some can afford to wait whenever the right time comes (however long that takes) and if it does not come then it's not a big deal. And some have time frames, and for us we're trying to figure out how long we should adjust that time frame but it's not an open-ended time frame.

I think its less about the 1-2 year decline, I think its more about how many years prices will "sit". RE markets have a good amount of intertia (look what happened on the upside, it took a year into the mortgage crisis to fully see the bad numbers). They don't "bounce". You're talking about year to suck up inventory and get general confidence back.

And 0% appreciation over 5 years can be worse than a decline... especially when you're leveraged.

Sorry, I meant that as "You're talking about yearS to suck "

Just look at the national market. There have been declines for quite some time now, and they're actually *accelerating* in some parts. Just because there is a major decline doesn't mean that further decreases are't on their way.

Read the nytimes article on wall street bonuses, co-ops, and lending standards.

This is going to happen a lot faster than people believe. I've been saying it for 2 months now. Thousands of people without jobs, bonuses half or less than they've been in the past, paid principally in worthless stock, and banks will only underwrite based on 25% of the bonus, co-op boards rejecting bankers. AKA no money.

Wall Street represented 25% to 30% of the Manhattan market. I believe this constitutes the definition of "melt-down."

The difference, EddieW, is all the new inventory coming online. They can't leave those apartments empty, and if they rent them instead - which will happen - it will drive rents down more, driving home prices more.

This is a classic deflationary spiral, albeit a good one.

Absolutely... I just noticed that urbandigs chart... WOW.

When sales have been DECIMATED (basically by half in Brooklyn and Manhattan) and we're still getting inventory (and more will come), all I can say is... WELCOME TO THE CRASH.

EW: "I think its less about the 1-2 year decline, I think its more about how many years prices will "sit"."

That's right. It wouldn't matter how much prices declined if it were to be a momentary dip followed by a bounce back up to the other side of the trough. But what if prices stay flat (whatever that new level might be) for 5,7,10 years? It will be interesting to see where mortgage rates go. Everyone says they will go up, but people have been saying that for years now. How high, how gradually?

lowery, prices can't stay the same b/c new development MUST be cleared. It represents a net expense.

stevejhx, the developments are usually owned by an LLC. A great entity for pass-through losses. And in the worst case, the LLC folds. The partners have their "limited liability" so they're hurt but OK. The people who bought in the building are going to be living in property that is taken over by the city/state of New York.

Don't say it won't happen. IndyMac was taken down by the feds last night. I wonder when we'll see some of these condo LLC's go into receivership...

It's a bit more complicated than that. It depends on the debt they have to service - not a lot of debt (like the LeFraks, who never use debt) and whether they can meet their expenses by renting at market rates. But the more market rentals, the lower the price.

I wouldn't doubt some of these places being taken over by the banks. But once you own a condo, the state doesn't take it over. It may in very difficult situations be seized by the city or state, but you still own your unit.

Now, the co-ops of the 80's were different: they were seized for not paying property taxes.

"The people who bought in the building are going to be living in property that is taken over by the city/state of New York."

So essentially they will be glorified housing projects. SWEEEET!

Steve, not sure what you mean, but I guess you're predicting a continual slide down in prices - I'm thinking more of how long the down period lasts - a "normal" RE cycle would have all new development stopping soon because of price direction - that would be the beginnings of the bottom shaping up because of no new projects - but future NY real estate prices may have an upward creep in mortgage rates to contend with - will be an interesting market to watch - I think the people gloating right now are assuming things, however, such as that no Manhattan buyers have been paying 30%, 40%, 50% or 100% downpayments (which in the better coops they are required to do), nor that they have the liquid assets which many coop boards have been requiring (multiples of face purchase price remaining after closing) - I think you're focusing on the zooming 1998-2007 market for new condos and assuming all purchasers have been foolish.

Coop prices would be dragged down by falling condo prices if the slide is precipitous and long-term.

Anyway, I will be much more on the lookout for people who can call the bottom here, not the top.

BTW, LIC has been taking lots of abuse here in posts. In its defense I'd like to say that the waterfront park in front of the first (1990s) LIC coop (offering prices $30K-$35K around 1990) is a lovely place to relax on a summer afternoon. There has been nothing in LIC up till now, but it is reaching critical mass of new residents with $$$. The "things to do" will be there. And some people do prefer a lifestyle of getting away from where they work every day and looking back across the river at it. LIC was out of the question for me back when it was half its current price, because of lack of grocery stores. I knew people in the waterfront coops who drove to Sunnyside or Astoria to get necessities. Now that has changed, but the prices are orders of magnitude higher. So the people who bought there are not fools. If they bought early enough they put up with inconveniences for low prices. If they bought recently they bought into The Jetsons writ large.

I'm still curious, steve -- you BOUGHT in Fire Island? It seems inconsistent with your ideas.

"you BOUGHT in Fire Island? It seems inconsistent with your ideas."

Absolutely not. When I bought here prices had not risen in about 7 years. It was cheaper to buy than to pay for a share, plus I work here so a share is out of the question: I'm sitting on my terrace right now, working (sort of), and couldn't work with the noise of roommates.

I did come here to buy a 1-bedroom, but I found a truly great 2-bedroom facing the Great South Bay that needed some TLC. Year by year I do more TLC: Year 1, new furniture (they come furnished). Year 2, a/c and two large skylights. Year 3, strip off the painted-over 1970's wallpaper, skim coat and repaint. Next year, redo the kitchen. By taking 3 inches off my master bedroom to build a new closet, I can add 4 feet to my living room and double the size of my kitchen. Next year I'll have a unique apartment: no other 2-bedroom + sleep loft 2-bath units available. Add bayfront, as close to town as you can get, a/c and plenty of light. It'll be an even greater place to be.

Yes they've gone down in value from last year's peak, but they never really went up very much. And I have no intentions of selling it.

Even if the co-op board is nuts.

Is this coop in The Pines? I'm having trouble picturing it being 2-brm with deck. Beautiful place, but it's on a barrier island/sand dune, whereas Chelsea is on Manhattan Island. How's the insurance on that place? If a storm levels the place, do you get replacement value cash payment? I know you won't be retiring there. To me, FI has lots in common with South Florida, so I'm surprised you would buy, but I do understand the issue with shares, and to rent something that does not split up into shares is tough. On second thought, I think South Florida is a better investment ;)

I don't think prices in LIC will fall lower than $600 sq ft for new construction. It costs $500 to develop and market right now and prices for materials are going higher so sponsors would rents instead. The areas of largest declines for the next two years will be West HARLEM and Jamaica single family homes.

Prices will fall everywhere at least 30%. Some parts with high inventory will fall 40-50% this time next year. What if I told you that the true inventory number wasn't 8,000, but at least 11,000. Take a look at the new developments. Most only list 10-15 for sale at a time. That leaves hundreds in most developments not even listed. If it's not listed then it's not counted in the inventory numbers. Downtown's financial district literally has thousands of units still not listed. Even in the best of market this inventory would be very difficult to move. The financial district is going to look like a ghost town in 2 years.

People you are going to start to see buildings being abandoned, just like Miami. I know everyone thought it was a joke 6 months ago when some said it, however it's just around the corner. If you have a pending contract for a new development you should be greatly concerned. Lets say you do close and the building has 100 units. They only sold 30. Now they try to rent the other 70. Who is going to be paying for the building maintenance. The building expenses were designed for 100 owners paying a certain percentage. This is exactly what happened in Miami. People are living in huge buildings with the lights off in the hallways. When the elevator breaks there is no money to fix it. No maintenance people. There all sorts of dangers buying new construction and no one ever talks about them. If you buy in this market you are out of your mind.

luis5acc -"I don't think prices in LIC will fall lower than $600 sq ft for new construction. It costs $500 to develop and market right now and prices for materials are going higher so sponsors would rents instead" Prices will fall below $500. Everyone forgets that most developers still owe banks money. Selling say 30 units out of 150 is not going to satisfy the bank. A more likely scenario is to reduce prices greatly to sell say 70 units at a PSF lose to pay the bank and then rent the remaining 50. Or they run the risk of losing the project. Renting units is not always as easy as most think.

Steve- How does a condo project that turns rental effect it Tax abatement standings. Do the developers still benefit or is it only for condos?

dco, when all your predictions do not happen, are you going to admit on this board how silly you are?

I think its about time somebody taught you something, dco. "Lose" is a verb. "Loss" is a noun. Ok. Get it? It's ridiculous that you are talking about a market in a country where you have such a poor grasp of the language, or economic dialect, that you don't know that lose is a verb and you continually use it as a noun. I can't believe no one has ever pointed that out to you before.

Please, there is no need for the grammar police.