Buy now or be priced out(especially Brooklyn)

The FACTS are: Sales are up. PRICES ARE DOWN
READ THE REPORT YOUR SELF

http://streeteasy.com/nyc/market/reports

http://www.nytimes.com/2011/10/04/nyregion/rise-in-sales-helps-manhattan-housing-market-recover.html?ref=realestate

FACT: it all depends on what you read.

Whatever happened to the Brooklyn Heights and DUMBO broker who was anti-Williamsburg?

>>FACT: it all depends on what you read.

Not true- look at the details in the data. not what people say

had 3 offers turned down a month and a half ago in bklyn. all came back last week accepting.... prices are up????? don't know about that. now that they all accepted, time for me to sit and see if i can offer them less.

I'm going to the Brooklyn Bridge and jumping....

You can all be right: these reports are based on sales closed between July and September, meaning they reflect deals made between April and July. It is not news that the late Spring/early Summer season was very strong in volume, with somes prices up (in hot Manhattan and Brooklyn neighborhoods) and some prices down (overall manhattan condos, middle-class neighborhoods) for the same period. Even the REBNY mouthpiece says prices are stable overall, which means there was no way to massage the facts into even a nominal increase.
It's also possible, and indeed likely, that volume, inventory and prices are coming down a bit, reflecting seasonality and market uncertainty. We won't have the data on that until February 2012, so there's plenty of time to argue about anecdotes.

Recent trends don't bode well - inventory up (though not quite up to pre-summer levels yet) and pending sales down. I know these are Manhattan charts, but I'm sure they correlate quite closely with Brooklyn.

ab_11218, do you think prices are coming down? If so, why are you buying?

http://urbandigs.com/chart.php?t=Market+Trends&s1=Active
http://urbandigs.com/chart.php?t=Market+Trends&s1=Pending+Sales

Buying or not buying? I think it also depends on what you think is in the economic cards? A.Crash and burn in the near term or B.Continued deterioration in price until the macro forces re-balance.

What do you think happens over the next 8-10 years? In my opinion if you don't plan to own for that period, it may make sense to rent. So if you purchase your dream home now at say $800-1100 dollars a square foot in a prime Manhattan location, do you "bears" think you'll be screwed 8-10 years out? So far January-March 2009 is the NYC bottom.

Keith Burkhardt
The Burkhardt Group

bjw, i'm looking of great deals to buy or good rental. have not seen any good rental prospects, so started looking at buying. my biggest problem is that i have a 6 X 10 block radius around my kids' school and after school. that's a very small area to find what you want, and my wife wants a lot for cheap ;).

do you "bears" think you'll be screwed 8-10 years out?

I don't know. If you Stocks..say the SnP in Jan of 2001'-- after(a year) the bubble of 2000' would you have thought "you'll be screwed 8-10 years out?"

SnP Jan 1, 2001' = ~1325

SnP today == 1212- (after a ~5% rally the last week). Thats about 8-9% lower...

ab, which part of Brooklyn, if you don't mind my asking?

"I don't know. If you Stocks..say the SnP in Jan of 2001'-- after(a year) the bubble of 2000' would you have thought "you'll be screwed 8-10 years out?""

Of course not. I think you'd find it's a bit unusual for someone to have put a huge chunk of change in the market at a specific point in time 10 years ago and then left in untouched to date. I also happen to think lower priced stocks are a good thing. It's an opportunity to buy back in at a discount.

So don't buy stocks or real estate (;

Does the stock market and Manhattan real estate correlate that similarly? I think your comparison would be more relevant if we were talking about a purchase in 2008, not almost 2012. The s&p did not drip out it's losses, it came relatively hard and fast, a few years of extreme price destruction in stocks killed 10 years of return.

From peak to trough we can certainly see some rather steep price destruction in NYC property. I just looked at a sale that took place on the UWS for $2.6M in 2007, now it's on the market for $1.8M something.

>>I think you'd find it's a bit unusual for someone to have put a huge chunk of change in the market at a specific point in time 10 years ago and then left in untouched to date

To my point: Isn't that what you are doing with RE. but it is more illiquid and you can't buy it back or $$ cost average in? and we are coming out of a bubble..

>>>s&p did not drip out it's losses, it came relatively hard and fast,
Really?
SnP
3/2000- ~1527
8/02 ~812
9/07 ~1563
3/09 ~700
today ~2112

that took 10years --

And since RE is a lot more illiquid it will just be a grind lower and could be down 10% in 10years.
The Headlines are telling you that WS is over as we have known it in the last 10years(WS sees no Exit From the financial decline) and it was their incomes and bonuses as well as the ease of financing that has propelled RE higher in Manhattan. ANd that is just not there anymore. so I would not be surprized if RE was 10% lowere in 10years.. You have to factor that in in your decision to buy..

That's not a prolonged drip, it's what Ron Paul likes to refer to as the "business cycle".

"To my point: Isn't that what you are doing with RE. but it is more illiquid and you can't buy it back or $$ cost average in? and we are coming out of a bubble.."

Totally agree there. I don't view my home as an investment, but if you're investing in RE, the illiquidity factor puts a lot more emphasis on timing.

Keith-

Bubbles take longer to deflate. As Ron Paul would say. the Fed causes one bubble after another--
Thats exactly what happened-- low rates and easy financing also caused financial stocks to propel higher after the tech bubble - 8/02'- 9/07'. Finacials represented 20% of the Snp during that time financial stocks exploded during that period.. if CFC (Countrywide) was $11/sh in 02' it was $45/sh in 07'. Morgan Stanely $26/sh in 02' -- $75/sh in 07'..

That is no business cycle, that is a Fed induced bubble. That is his arguement. take away the Fed and let the normal business cycle tak over.. we would not have these booms and busts without the FED.
We are coming out of a RE bubble. It will take time to deflate

This is turning into a different kind of thread Brooks2. I agree with what your saying, because it's true, but I guess you could argue that the FED ain't going away anytime soon.

I think we could really imagine a lot of scenarios both good and bad over the next 10 years. I am always surprised by the nature of markets, I wish they behaved with a definite regularity, then I would be rich!! But NO one every gets it right for a large % of the time (or even a little), so many careers built on one great call. If I could make 5-8% a year with any certainty I would be thrilled.

But buying a house where you will live, love and create a life is much different than your portfolio, emotionally and financially. I am not saying "Buy now or be priced out forever!" I just don't think it's such a bad time to buy a home. That said, many people would be better off renting and actually prefer it.

I just think people have to factor in that RE may not be higher in 10 years just because someone says that. IT could be lower, it could be higher. If you plan on being in your home for 10years you may want to buy now for some stability. But on average people move every 7 yrs.. Things may not pay off..

I am just trying to add Reality to these SE theads.

Call it the BS checker

thanks brooks. we were lost before you showed up

Forgive me, but a lot of Brokers do seem lost.

The truth is.
The bears here don't have money to buy.

The bears that do, already bought in the past 2 years.

Everyone that bought in Williamsburg and LIC the past 2 years are up from where they purchased.

This is all very interesting and I am sure there were a few very lucky or very well informed people who snapped up an apartment in that 3 month window in 2009. However, I'm going to guess that 99% of the population simply wants an affordable place to live and, at some point, must just take the gamble. Either buy the apartment or sign the lease--I never understand the constant back and forth about timing the market.

9/2010 i pulled the trigger. in the money baby!! hahahah

"Everyone that bought in Williamsburg and LIC the past 2 years are up from where they purchased."

Nominally maybe. Net of transaction costs, highly unlikely. I should know. I'm one of em!

>>But buying a house where you will live, love and create a life is much different than your portfolio, emotionally and financially. I am not saying "Buy now or be priced out forever!" I just don't think it's such a bad time to buy a home. That said, many people would be better off renting and actually prefer it.<<

Well said, Keith.