Is living in NY going to get worse?

> dco, you missed the point. kgg is pointing out how expensive it is to maintain a nice big home in
> the suburbs, which is why more people are staying in or moving to the cities.

Thing is, the nice big homes in the suburbs are already 15-20% cheaper, and getting even cheaper.
And so are the small homes and condos in the suburbs.
And its getting worse and worse.
So, all these towns on commuter lines are only going to get cheaper and cheaper.
And food is less expensive out there.
So, as long as you don't buy too big, the equation toward the suburbs is actually getting stronger...

Not to mention, Miami down almost 30%. Vegas down 30%. Last time I checked, those are cities, too.

"Thing is, the nice big homes in the suburbs are already 15-20% cheaper.."

Nice statement. Totally untrue. But nice. I know because I have one of those big nice homes in the suburbs which I bought recently and the prices in my area (a nice but not extravagant suburb) have in no way dropped 15-20%. Again you guys pull these numbers out of your collective asses and trot them out as gospel. House values have fallen, true, but depends on the house, the neighborhood, the suburb. General statements concerning real estate are generally overstatements.

"So, all these towns on commuter lines are only going to get cheaper and cheaper."

You really do have no idea what you're talking about. I mean that.

LICC -- the lax standards for lending without the lender being responsible, you mean the parceling off of CDOs (including credit card receivables) and then packaging the small parts into other pools of other types of paper bought up by funds? Yes, I have always suspected this may be the next big crisis, since I was working at a law firm (as staff) that was very busy in late '80s and early '90s doing what they called "collateralization." I do remember playing dumb and smiling and asking a young associate "Gee, sir, how can you make an unsecured credit card debt an ASSET?"

Friends of mine and I "got it" from the beginning and clucked and wrung our hands about what we called the beginnings of a whole new type of funny-money or junk-bond, just as Michael Milken was in the news and Drexel was liquidating and "junk bond" became a dirty word.

So I'm wondering, is it the reselling of debt that's partly to blame, the way it's treated as an insurance risk being sold to reinsurers in syndicates that presumably can absorb any losses because of diversification?

If so, I think it's going to be hard to pin any blame on culprits and lax standards. So the attempts to cure this mess will focus on how mortgages are issued up front, not on how they are resold?

To me this all looks like just another bust in a long history of busts. I would like to avoid the nasty personal attacks being engaged in, but ....... my parents lived through the Great Depression. They don't remember anything about prices of assets declining by any amounts. What they remember is going without shoes and being very hungry. As I recall my father describing it, it was, yes, quite similar to what we are calling "the credit crisis." There was no cash. Banks could not lend because they didn't have it and they could not borrow it.

The changes in banking, financing, how daily business is conducted, has changed so much since then that what we call a liquidity crisis is nothing compared to the '30s.

The question is how long this will continue and what will be next. When all anyone talks about is bad stuff, chances are we're all at least halfway there. As for Manhattan real estate, who the @#$* knows?

lowery- "As for Manhattan real estate, who the @#$* knows"

I do and I have been saying it for months. Major price reductions of at least 30%. More in the "it" areas of Brooklyn and Queens. Reason is those who can afford at the bottom will buy in Manhattan before buying in LIC, Williamsgurg, DT Brooklyn, Cobble Hill............... Sorry if that sounds arrogant, however there are people who have been saying things didn't add up for a long time. Now people want to mock those who have been right from the beginning.

Some people can just keep on talking out of their A$%, its not going to make your condo increase in value. The real people I feel for are the ones awaiting closings on new developments. It's got to make you sick to know the day you sign you might be upside down on the mortgage from the start. Imagine the conversation with your neighbor when he tells you, he paid $200,000 less just 6 months after you closed. Good thing you got that 2 year head start. Well look on the bright side, you got the first unit that was for sale 2 years ago.

> > "Thing is, the nice big homes in the suburbs are already 15-20% cheaper.."

> Nice statement. Totally untrue. But nice. I know because I have one of those big nice homes
> in the suburbs which I bought recently and the prices in my area (a nice but not extravagant suburb)
> have in no way dropped 15-20%.

Yes, I get it. The one guy with an anecdote about his house is all the evidence any rationalizer needs.

But the facts say completely otherwise. Nationwide, Case Schiller is down 20%. NY Metro is down 10%, and that includes a lot of areas in Brooklyn/Manhattan which haven't gone down 5% yet, meaning there are a bunch of 15% and 20% declines coming from outside the city. Guess where that is... the suburbs.

So, I'm sure your front lawn has all the data you need, but for the folks actually working off facts, the suburbs are *much* cheaper.

And, anecdotally, EVERY single neighborhood the NY RE section covered in the past year that wasn't in prime NYC has noted a 10-15% or more decline.

Again you guys pull these numbers out of your collective asses and trot them out as gospel. House values have fallen, true, but depends on the house, the neighborhood, the suburb. General statements concerning real estate are generally overstatements.

"So, all these towns on commuter lines are only going to get cheaper and cheaper."

You really do have no idea what you're talking about. I mean that.

dco, you have no clue what is happening. You say you have been right all along, but Manhattan prices haven't crashed in the least. Neither have prices in LIC. You seem like a nice guy so I hope you stop making these foolish statements again and again.

LICComment- You are absolutely 100% correct. Prices have not crashed, however they have be reduced ALL over NYC. LICC it's the increasing inventory that is showing the greatest concern. We are at a 1 year supply. This is not even counting the thousands new units not yet released. I'm sorry but 30% is my low estimate. It's the job market that will cause these decreases to meet my anticipated reductions. There is nothing anyone can do about it. Not even the gov't and all their tricks can reverse this mess.

"Manhattan prices haven't crashed in the least." It strikes me as an odd statement. As the sun disappears behind gathering dark clouds and the wind kicks up like mad, it's kind of nuts to tell people running for cover that they are silly since not a single rain drop has yet fallen. If you were to start shouting that, you may continue to do so quite accurately until you are suddenly struck dead by lightening as the skies let forth a deluge of water.

well said, bri.