downturn worse than people thought

The artice discusses the NY region and the only objective measure is the Case-Shiller report. The article states "Compared with most of the country, New York City property values have held up better. During the 12 months ending in November, prices in the metropolitan area fell 4.8 percent, according to Standard & Poor’s/Case-Shiller Home Price Indices. But that was not as bad as the 7.8 percent drop in the Washington area and far better than the declines of more than 12 percent in Miami, San Diego, Las Vegas, Phoenix and Tampa, Fla."

http://www.nytimes.com/2008/02/03/nyregion/03property.html?_r=1&oref=slogin

Let's try to be fair and balanced, Julia.

The article only intimates that an overall downturn could impact Manhattan. It is pure subjective and speculation. Maybe wishful thinking from aspiring homebuyers in the journalism community!

Or wishful thinking from homeowners wanting to sell at top price...anyway you look at it real estate in Manhattan is changing just how much downturn is the question.

This just gets absurd at some point. All this back and forth. The nation's economy has serious problems right now, we're in the beginning of a recession, and home prices will be affected. As bad as other areas? More? Less? Does it really matter? Values will/are slipping. In the long run, history shows the downturn will end and markets will recover. Is there anyone really suggesting nothing or very little will happen in NYC despite every economic indicator around the country blowing lately? Come on. It is a terrible time to speculate in real estate, but it isn't a stock--you live in it and must have a place to live. You don't need to have stocks. That's a difference. So if you need a home, buy a home. But of course it is going to lose value in the short term. I just can't believe this is treated like an open question.

While I basically agree with you KyleWest,I think what is really hotly debated on this board is just how much the manhattan market will decline. Lets face it, most of us are paying over a million for living space and some of us are paying a lot more than that. So, at minimum a 10% decrease in the market will bear a savings of $100,000 and you all can take the math forward from there. So, we are talking significant dollars due to the astronomical prices we pay in Manhattan.Even a modest decline of 5 or 6% represents a pretty decent hunk of change. So, yeah, it does matter.

Agreed, kylewest. A little while ago I posted about significant depreciation in many parts of Brooklyn and more marginal neighborhoods and properties in Manhattan (including blocks and properties in prime neighborhoods) and received a few dismissive replies. Why is it that the rapid appreciation of all these properties was seen as a sign of a booming market, but the depreciation of these same properties is not a sign of a slowdown? Of course it is. It starts at the edges and creeps in.

I posted this link before and no one responded. It's a recent Jonathan Miller chart showing the large disparity that has developed between the top 10% of the market and everything else. Essentially, unless you're holding or buying in the top 10% of the market, inflation-adjusted median prices were down in Q4 2007 compared to Q4 2006. In fact, EVERY quarter or 07 was down compared to the same quarter in 06. Some have speculated that The Plaza, 15 CPW and other super-luxury properties have been holding the numbers up, and this is the data that proves them correct.

http://curbed.com/archives/2008/01/24/three_cents_worth_luxury_market_disconnect.php

kylewest.....you can choose to rent instead of buy......

keeep wishing for a decrease. The only decrease you might find apts in crappy locations above 110 street. Crappy views, silly floor plans, and crummy buildings. Those are where you will find slight bargains.

spunky = wrong

I think spunky is correct, for now...

The crummy buildings and silly floorplans will definitely take a big hit... eventually the rest of the market will soften. 10 to 15 % over the next 2 to 3 years before a slow climb back.. For those who can afford to ride it out it won't be a big deal. For those who are over-leveraged there could be some difficult times, especially if they lose their jobs.

"In fact, EVERY quarter or 07 was down compared to the same quarter in 06"

spunky is correct. tenenmental, you are talking macro levels here. Try and find a quality apartment at any price point in Tribeca, UWS, Gramercy, West Village, Soho, or GV, etc right now for less than what was paid in 07 or 06. You can't. So continue to post all those great articles containing all that great data and I will continue to ignore them.

mazdamp = pissed off renter who can't find an apt at a lower price than it was in 2007

Spunky is never correct. I think he's a cheerleading broker who just comes in here to try and pump up prices.

In terms of investment, the "crappy" areas above 110th st are very dolid, in my experience. I've always invested downtown but as prices shot up I found one building and a few co-ops with more relaxed rental rules uptown. They've appreciated nicely. Not shot up the 10-20% but all cash flowed from day one and now the price per/sq. ft. has increased at what I think is a healthy, sustainable. This is not a statement about the area nor am I saying the area will "gentrify"...that is another endless debate. More making a statement about investment. I do not think the area above 110th st. should be written off as the area that will be demolished in a downturn.

Spunky...you might be correct. please let everyone know what you are basing it on.

I think the bottom line is that for the foreseeable future real estate is a lousy investment if you are expecting the appreciable returns of the last 10 years. However if you want a place to live and you have a 5 to 10 year sell horizon you should be okay.

Again, why is it that when the "marginal" properties and neighborhoods see appreciation the bulls call it a sign of how hot the market is, but when they start to depreciate, they're dismissed?

JuiceMan, that chart is specific to Manhattan, so while it does include Harlem and above, it is not covering the outer boroughs or NY Metro area. It shows that in 2003-2006 there were year-over-year median price increases for properties below the top 10% of the market, and decreases for those same properties in 07. Somehow Jonathan Miller was fine when his company was appraising properties through the roof, now his findings are suspect?

As for "a quality apartment at any price point in Tribeca, UWS, Gramercy, West Village, Soho, or GV, etc right now for less than what was paid in 07 or 06," how many thousands upon thousands of units in prime Manhattan neighborhoods are prewar walkups? It certainly doesn’t mean they’re unlivable crap. Remember, my point wasn't about the top of the market. As for units selling cheaper this year than last, I can think of one off the top of my head in the "red hot" East Village. 544 E. 11th St. 4A sold at $599 asking last year. 3A is on the market, 1 floor lower, same exact floorplan. Should cost more being that it's a lower floor walkup, but asking is the same, and I'd be surprised if it doesn't go for below. And the finishes in 4A were lousy, no chance they were a positive issue in pricing. I’d give ‘em a lowball if they were dog friendly. I follow the East Village very closely, and can tell you from 1st hand experience and conversations w/ (considerably less confident) seller’s brokers, there is WAY more room to negotiate this year than last.

As for the West Village, those poor souls on Christopher Street are pricing in appreciation like it’s 2005 and sit there month after month, chopping away…

I’m not arguing that there’s (currently) a decline at the very top of the market, just that there’s softening and room for negotiation in much of the rest of it.