What happened to the Wmb urm implosion?

that was Wmburg I meant to say....

Stock market crash 1987. RE bottom 1991 - 1992. 4 or 5 years?

jim, 30yrs says it very plainly of course, but there's almost surely to be a parallel here with that time period. It's normal to be frustrated in a slow-moving market (I know I was), so sometimes you need a little break from all this to just clear you head. I also think it's perfectly normal to get excited about price cuts and expect more, dramatic ones, even though they don't always happen. As for the Edge, I suspect they'll eventually drop their prices, but it's going to be a fairly long slog to get there. According to another poster on this board who seems pretty reliable (cfranch), there's no underlying mortgage on the property, so they won't have the same pressures to sell as quickly as others. That said, they can't sit there are pretend that it's a vastly superior product to Northside Piers (it may be better, but not overwhelmingly so) when they cut prices as well (though as you point out, tower 2 hasn't budged). Bottom line: if you're dead set on Williamsburg new construction, I don't think there's much downside in waiting it out a bit more, but I'd be out there looking just in case something great comes up.

"We are many months into the "crisis" that began in 08, and many had predicted on SE. in many threads that Wmburg prices would implode due to the general downturn in NYC, oversupply, overhype, L crowding, bursting of the Wmburg bubble, etc. YET...YET....The Edge (which I just saw and is very nice) hints at only say 10% or so discounts, NSPiers gave big reductions on some units but I am told not on building 2, 80 Met threads say discounts there are maybe 10%. If what so many predicted were coming true wouldn't we be seeing LOTS OF BIG 37% STYLE DISCOUNTS? What thoughts do you bulls and bears have?...what explains this. I'd like to buy at say The Edge but at a big discount, so I am perplexed and frustrated."

Jim, those types of discounts seem to get posted here pretty frequently. Do a little searching.

Or... did you read the NYMag article? It was a 10 page spread on all the building problems and the discounts specifically in Williamsburg.

"those types of discounts seem to get posted here pretty frequently"

Not really in the market we're talking about here, which I'll admit is a bit surprising. 1 NSP made several big cuts (one of which was 37% I believe), but these have yet to be replicated in other buildings (including 2 NSP), as far as I can tell. Every building will react differently, so this "crisis" won't materialize in the way some magazine articles imagine. 125 North 10th has made some notable cuts in their remaining units, and a host of other developments are quite open to negotiation, which includes not only lowered prices, but also sponsor's payment of closing fees, parking, outdoor space, and other notable benefits. There's more wiggle room to get creative without focusing solely on price - which is good or bad depending on your priorities obviously. I also think the strong rental market in the area and the success of a few well-priced buildings (72 Berry) have helped dissuade some cuts as well.

If we assume for a second that a) Manhattan is down say...[pick a number]___ %, b) that Wmburg is in worse shape than Manhattan because of inventory and burst hype [plenty of people on SE think that], c) and the big projects in Wmburg were priced at original list at peak prices they thought could be achieved, then it seems odd that Wmburg, even the splashy new places, is not down something more than the X percent Manhattan is down. The reeasons bjw2103 provide some explanation for this, I suppose. When you talk about non-price ways to discount, such as closing costs, well, that just means you're not talking very big discounts, in my view.

I don't know if I totally agree about that non-price concessions. A sponsor picking up closings costs can get close to 6%. This all depends on valuation of course, but combining a parking space, outdoor space and storage space could get you to 40k. So on a $1M place, adding those two together can get you close to 10%. I agree that 10% is significantly less than 20% off the purchase price, but combine the concessions with a 5% discount and you could have something meaningful.

Let's look at NSP2. They haven't really cut prices yet, but let's compare PSF prices with original NSP1 asks. NSP1 9G originally asked $1,160,990 / 1,244 sqft = 933 PSF. NSP2 10H is asking $902,990 / 1,234 ft = 731 PSF. 731/933 = .78. I just randomly picked a couple of units, so don't jump all over me that they are perfect comps. But the sense I got from quickly looking was that the original asks for NSP2 already factored in a drop off of peak asks. Also, I think the live free for a year thing they tried early amounted to a 7% discount or something like that. I don't think there were many takers.

125 N 10th had cuts around 15% bringing many of their asks into the mid 600s PSF. When I look, there doesn't seem to be too many listing that went into contract after the cuts. And this for one of the better buildings IMHO in Billyburg.

When I looked at 72 Berry, the one real recent success in terms of selling, their closing PSF ranged from the mid 500s to the mid 600s. Who knows if the buyers got any concessions like closing costs.

If sponsors want to wait out a recovery, that's their choice. But seeing as how you are starting to see places in Manhattan at similar PSFs (though not perfectly comparable to new construction in the Burg), I don't know how they are going to clear the market at these prices. But what do I know?

jim, it's a bit facile to look at Manhattan's overall decrease (which after all, is a much bigger and more varied area than just Williamsburg) and extrapolate. It's probably not that simple, even though the inventory sitch in Williamsburg is clearly a major issue. This doesn't mean that there won't be declines, just that the timing and responses will be different. I also agree with milkman - you're dismissing closing costs, etc. as relatively insignificant. That stuff adds up very quickly (as anyone who bought new construction at peak prices would probably tell you).

milkman, definitely agree. I don't see them clearing anytime soon at current prices, but some seem intent on waiting it out as long as possible. For some of us, it will be interesting to watch at least.

Jim, the Edge have already dropped their prices but I don't think enough. We visited them last week - nice development but still too expensive for the area. They were clear that they are willing to negotiate - so the listing price is not the final one. Also, they have only sold 20% of the units which is a clear indication that they are overpriced. I really think prices will fall further unless you start seeing some major hiring in the city and the banks start giving mortgages away like they did 2 years ago, both scenarios unlikely to happen.

When i peruse the listings for bldgs that seem to be in mid-cycle of closings like NV, 125 n10, nsp1, it seems the smaller apts are selling much better than the 2-3bdrms.

Thanks for comments. My view is that the developers of these big projects (apparently with cooperation from their financers) are basically managing the situation to make discounts that will entice enough buyers to keep some flow going, and hoping things stabilize or turn up. All I am saying is that so far this means Wmburg just isn't acting like the total basket case some said. For example, DRIGGS said:

driggs11211
about 8 months ago
ignore this person
report abuse Buying an apartment in Williamsburg right now is absolutely insane. Everyone except recent buyers and real estate brokers are sure that prices are going to crash hard.

Also, to be clear, I see that closing costs in absolute terms can be important, and that a price discount 10% or 15% is not trivial in absolute terms. However, for those who think (and tons of people on SE seem to think this way, or used to) that Manhattan real estate is a bubble bound to burst with an absurd illogical relationship betw cost of buying vs. renting, and for the many who have said that Wmburg would be even worse due to inventory, even a 20% discount is not enough to reflect their views.

BJW, ironically, I was trying not to be facile by using an undefined % for Manhattan, because one can
t generalize, but obviously Manhattan is a comparison point, and each can determine what part of that market is comparable to Wmburg.

jim, I hear you. Just given the situation, there's always going to be a bit of wishful thinking and exaggerated proclamations (ahem, the notion that 10,000 new condos were coming to the market in this area alone!). Just hang in there, tune out the crazies (on both sides of the spectrum of course) and keep plugging away - you'll find the right place at the right price.

just saw today that a poll from brooklynbabyhui, WB parents yahoo group, that over 60% of people with children in the area plan on staying for more than 15+ years and raising their children here. we're in that camp too. the baby boom that's happening combined with tons of new residents that are coming in and buying as singles or couples, will also end up with kids - And, that will increase the demand for bigger apts. many of the owners in my condo had been WB residents for years. for several, it was their second purchase in the hood. it's a wonderful area to be a parent. just a great community. my kid is having a terrific child hood - in a great pre-k (84), is in karate and swimming at the Y, ballet at sounddance on N.7th, and 2 classes at Ms. J's gymnastics. she has a zillion friends and you can check her out on Saturday at the famous WB children's halloween parade after the pumpkin party at the East River Park and face painting at SpaceCraft. (yes, she's busy, but has mad crazy energy, so she could probably do twice as much). AND, has a built in best friend - the little girl right upstairs.

oh yeah, last week, spent hours at PS132's annual halloween harvest festival.

Oh god. There's nothing worse than yuppie Williamsburg parents. Poor kids.

Gotta agree with avenueb on this one.

i too am looking in WB and also am a little perplexed. but keep in mind what 30 yrs said about 1987. the market didn't bottom out until 1992. we are only 6 months out from the crash.

also, edge and NSP2 aren't ready to start closing units. the real incentive to make deals will kick in as scheduled closings get closer.

i do like the area, but i can't convince myself to buy in the face of such asymmetrical risk. There is little chance of an sustainable price jumps, but there is a real chance of significant price drops.

in these uncertain times, i place a fairly high premium on having liquidity. so for me it definitely make sense to rent for a year or two and see if WB's inventory problem can sort itself out.

i am also concerned about nsp3 and edge phase 2. they should be coming online in 5-10 years. if history from 1987 repeats itself, we'll still be moving sideways on price. how is that market going to react to another 500 water front units coming on to the market? and there is no doubt the two towers are going to get built since they've already bought the land, and the internet tells me that construction costs won't be more than $300/sqft. and of course a lot of people within 5-10 years. i don't know if i want a potential resale to have to compete with those units.

wow that one post almost made me vomit. since when did williamsburg become park slope?

K Hov starts a fall sale on nov 7 which includes 77 Hudson. Toll wont be too far behind

Too bad it's not 77 Hudson in Tribeca........