NEW YORK REAL ESTATE CRASH!!!! AAAAAAAHHHHHH!!!!!

(though I believe this is mainly due to the pound weakening rather than vice versa - in any case as a UKer it's a concern)

http://www.villagevoice.com/news/0520,moses,64034,5.html

http://www.villagevoice.com/news/0520,demause,64033,5.html

not sure i agree with all the conclusions, but there it is.

1. Prices stoked by widespread amateur speculation
2. Heavily-leveraged new buyers entering the marketplace
3. Consumer spending supported by loans against expected future investment gains
4. Rhetoric from analysts and the press about how the fundamentals have all really for sure changed this time and the old economic rules no longer apply.

Where have we seen this movie before?

"Value" is a hard thing to pin down, even for an apparently simple physical asset like a house, and that's especially true in a market that has been churned up by speculation. There are a few government stats out there that make a stab at putting economic value on housing, like the owner-equivalent rent stat in the consumer price index, but they are all pretty imperfect (OER, for instance, tabulates house values on a "service" basis, that is, how much rent could the owner extract from a property; because the barriers to home ownership have been lowered by rock-bottom mortgage rates, rents have been depressed).

I think that NYC could be one of those markets where there would be a short-term "crash." To me the big X-factor is what happens with China; if they float the yuan and stop buying as much Treasury debt to maintain their currency peg, mortgage rates, which are tied to long-term Treasury yields, could get ugly in a hurry. All those folks with adjustable mortgages would get hammered, and people who bought with low down payments would find themselves underwater in the near horizon, because if they tried to sell they likely couldn't fetch enough to pay off their notes. This happened in Massachusetts in the late 1980s, and lots of people ended up just walking away from their properties.

http://calculatedrisk.blogspot.com/

Right with ya there. (Though I too am not Buffett.)

besides the fact that i don't have the $$ to put a down payment on an apartment anywhere near where i work, i wouldn't buy now anyway even if i could do it the RIGHT way (as in, putting 10-20% down, making sure revolving credit is paid down as much as possible, having savings sufficient to cover home expenses, etc.). because even if you do it old, conservative (and smart) way, you'll still get screwed if/when the bubble bursts b/c values here are so inflated.

Although ANYTHING could happen between now and a decade or so. So, this is just my thought at the moment. I'm very much in a "see what happens" mode, as opposed to a "i'm starting my semi-decade plans NOW" mode.

Mind you, I've been renting all my life. I've only started thinking about buying property the last year or so, and I don't plan to do so until 2006 at the very earliest.

I don't see why the lining is silver there, other than seeing less action rock bedhead types getting laid on a Friday night (sorry, couldn't resist.) There are a lot of benefits to living in a hipster town, as much as most of us want to make fun of them.

But if you're not certain you want to stick around for more than a few years, buying at the peak of the market makes no sense.

Rasheed OTFM.

word.

i've been considering on-and-off over the past 2 years whether to move back to south jersey or to philadelphia. the prices there are nowhere near as extreme and out-of-control as NYC, boston, or D.C. -- but even there, there's been a bit of speculation, prices have gone up (e.g., the nice parts of philly are still a bargain compared to the comparable parts of NYC, but are STILL overpriced [though not as ridiculously so]), and a lot of the growth/speculation has been in "not established" areas (e.g., parts of s. jersey that even 5 years ago had been farms). so there's really nowhere to run to or to hide on the NE coast.

I wonder if the peak oil/long emergency thing would only stimulate demand in cities, as it becomes wiser to live near where you work, in denser settings that are more energy-efficient. The exurbs with their mini-mansions at the end of mile-long driveways would be hit worst, I think.

I do still think NYC real estate is completely overvalued--foreign investment, tax breaks for rich americans, maybe even the rise of the hedge funder make it more pronounced than anywhere else--but I don't know if a bubble bursting will make NYC an undesirable place to live as it was for many in the late 70s/early 80s.

The worst part about any bubble bursting is that transitional period where just after the shit has hit the fan, but employers still act like everything is hunky dory i.e. high rental prices / no jobs. It wasn't until late 2002 until rental prices dropped to nearly half in Seattle. After that, things were great!

So, if this were to happen in NYC, there might be that weird transitional period, but it won't be nearly as bad as the dot com bubble bursting, because there isn't an accompanying economy going to shit with the burst (relatively speaking.. people have adapted to a deflated economy by then.)

Rasheed should probably shoot holes in my argument all over, deservedly. :)

Sorry that should have landlords, not employers.

Actually though, this article suggest that he MIGHT be reformed -- he learned from the internet bubble (and got in trouble with the law) and is now trying to make sure he doesn't get caught on the wrong side of another one.

Real estate is certainly a liablilty in my eyes unless I really desire LIVING in the location of said property.

Mortagage debts = Super high. Consumer-spending = down.

I welcome any "adjustment."

I'll tell you who makes out: in Jersey City there's a company called Del Forno whose signs you see everywhere. Several years ago they bought up lots of brownstones. They "renovated" them, which basically just meant fixing them up a little and putting in fancy-looking kitchen cabinetry and stainless steel fridges. Now they've been selling them off. They're probably making a killing. A friend of mine bought one off them a little over a year ago, and if he sells soon, even he might do quite well. But if he doesn't, he could be really screwed, because I don't think his earnings are likely to go up that much in the next couple of years.

*their*

it just depends on your definition of 'work'

Is ridgewood really that close to being majority yuppie already? It seemed like it was just starting down that road only maybe two years ago.

no

transportation-wise it really sucks to be in some of those places though

― chinavision!, Thursday, November 21, 2013 10:13 AM (4 minutes ago) Bookmark

Yeah I don't think it was a coincidence that Wburg is like 1 stop away from the EV on the L

ie they have completely different tenancy systems and greater govt control over housing supply and less govt acquiesence re housing speculation

nb the last thing i would prescribe is rent controls

Part of this is I think there's always a media frenzy in NYC to call "next" and "over" neighborhoods as fast as possible. Cf the exaggerated NYTimes hype about Jackson Heights.

oh huh I take it back about ridgewood. I just saw lots of affordable stuff on craigslist. thought it was further gone already! I like ridgewood!

cf me, I guess

ridgewood is safe because it's in queens, who would move to queens

I think there are little strips of it on the border of bushwick that are more yuppified. I saw organic groceries there and whatnot. The parts around middle village/fresh pond just look pretty ordinary middle and working class to me.

yeah there is like one street, I'm not actually sure if it's in bushwick or ridgewood

I forget which avenue it is, I think it's around where Northeast Kingdom is, and one side is ridgewood and the other is bushwick

ridgewood has this: http://gottscheerhall.com/
next time ILX people meet up it should be here. will suck equally for everyone to get to.

the q39 goes there it's very easy for me

http://gottscheerhall.com/sites/g/files/g520096/f/styles/large/public/halldancefloor.jpg?itok=trEkaENv
banquet hall fap!

I thought NE Kingdom was in Bushwick but I don't really know the boundary lines (who does, right?)

good restaurant btw although way pricey for the neighborhood

no it is, but the line is around there

says google: ridgewood is north of cypress ave and east of flushing ave. Northeast Kingdom is like two blocks south of ridgewood.

currently i am looking for an entry level job in publishing, and hope to do that and maybe move to new york, but it's been tough.

― Treeship

Buzza could you tell us more about your time in Manhattan Valley

Where did you go to eat, where did you shop, what did you do in the evenings for pleasure

How big was your dresser, where did you keep your socks

http://gothamist.com/2013/11/20/ridgewood_food_drink_tour.php#photo-5

^that makes ridgewood seem really cool. there doesn't seem to be very much available housing for sale, especially compared with sunset park

this seems to be a bit of a trend in brooklyn: churches selling their property, developer demolishing the church and building condos, sometimes with space set aside for the church. http://www.brownstoner.com/blog/2013/11/sale-and-demolition-planned-for-4th-avenues-church-of-the-redeemer/?ic_source=ic-featured-frontpage-top

we thought about moving there a couple years ago. it would have taken me way too long to get to work though.

http://www.nytimes.com/2014/02/16/realestate/manhattan-rents-down-incentives-are-up.html?_r=0

This makes me wonder if we've reached the limit of the entire city getting more expensive at once, and now we're just seeing the center of gravity shifting.

I have no idea what to "root for" in this scenario, but it seems we are at a crossroads.

On June 15, New York’s rent regulation laws and other key real estate measures are due to sunset. The revised laws that emerge will shape the market in which de Blasio’s housing initiatives play out and determine whether the city’s new housing truly adds to the stock of affordable apartments or merely replaces rent-stabilized units leaving the system.
During the run-up to Election Day, tenant groups responded to that looming deadline by sending volunteers to upstate Senate races, while lobbyists representing landlords cut massive campaign checks to party accounts. Now the fight moves to Albany, where Republican control of the Senate changes the drama, but doesn’t end it. The issue of who won control of the upper house on Nov. 4 does not alter the essential questions facing tenant advocates: Can the Assembly be counted on to push hard for stronger regulations? What role, if any, will Gov. Andrew Cuomo play? And does de Blasio have any leverage left for this all-important lift in the State Capitol?...

Shoring up the rent laws is “absolutely essential to the future of affordable housing in New York City,” said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development. “The mayor is not going to achieve his goal of a more affordable city unless he is effective at strengthening rent regulations. It’s the thing that matters most.”

http://www.cityandstateny.com/2/83/infrastructure/high-stakes.html#.VN4mAvnF9yw

http://www.nakedcapitalism.com/2015/08/foreign-smart-money-frets-about-turmoil-at-home-flees-plows-into-us-housing-bubble-2-thinks-its-a-safe-haven.html

Among California cities that are hot with Chinese investors: Alhambra, Arcadia, Irvine, Monterey Park, San Francisco, San Marino, and in recent years Orange County, “a once heavily white middle-class suburb that is now 40% Asian and becoming increasingly expensive,” according to RealtyTrac:

Buyers from China, including investors from Hong Kong and Taiwan, are driving up prices and fueling new construction in Southern California areas such as Arcadia, a city of 57,000 people with top-notch schools, a large Chinese immigrant community, and a constellation of Chinese businesses.

For example, at a new Irvine, California development Stonegate, where homes are priced at over $1 million, upwards of 80% of the buyers in the new Arcadia development are overseas Chinese, according to Bloomberg….

Similar dynamics are playing out in New York.

“In Manhattan, we estimate that 15% of all transactions are to foreign buyers,” Jonathan Miller, president of New York real estate appraisal firm Miller Samuel Inc., told RealtyTrac. “Luxury real estate is the new global currency,” he said. “Foreigners are putting their cash into a hard asset.” And they see US real estate as “global safe haven.”

Will be interesting to see how/if the Chinese stock market plunge dampens that. No more easy money from liquidating stocks for the cash to buy an apartment with no mortgage, perhaps even some fire sales of luxury condos to meet other obligations.

http://mobile.nytimes.com/2016/04/24/realestate/katzs-delicatessen-sells-land-and-air-rights-new-condo-will-rise.html

Did the market crash before, or just self-correct? Are we on top of another bubble? Asking with particular reference to Western Queens (esp Sunnyside) real estate (which still seems "reasonable" if only in compaison with Brooklyn and Manhattan (and Astoria and condofied LIC).

google to buy chelsea market for $2 billion

I went in there for the first time just before Christmas. Will they make the lines shorter?

not unless they blow up the high line

that seems odd, like is there office space above it that they want? It's a hellhole.

yeah there are seven floors of offices above (and they already fill half of those and own the building across the street)

I always feel like I want to go to the Chelsea Market, then when I am there I can't wait to leave. The DEA office is right next to this.

Yeah it makes sense as much as spending two billion dollars makes sense in any universe

I always think it's the kind of thing that would be alright if it was somewhere that was otherwise boring, but I don't get why anyone wants to spend their time in an overcrowded mall/food court with no seating when they're in one of the nicer parts of manhattan

there are presumably infrastructure advantages to the location, which is why they bought the carrier hotel across the street already

https://www.wired.com/2010/12/google-nyc

OTM xpost. It's the most awkward place to try to hang out. I've been in there before when it's been almost empty and it still sucks. They should just make the market it into a video game arcade for the googlers to continue to do more awkward standing around.

google should just own up and buy a skyscraper if they want the office space instead of trying to pretend they're not a big corp by buying this trash

I like Chelsea Market!

I mean, I don't, like, $2 billion like it, but I like it.

xp I think it's partly just something about the physical space, terrible flow, just this long dark tunnel of food and crafts

google should just own up and buy a skyscraper if they want the office space instead of trying to pretend they're not a big corp by buying this trash

― 龜, Tuesday, February 6, 2018 2:50 PM (six minutes ago) Bookmark Flag Post Permalink

It's worth noting that the Empire State Building has just over 2 million square feet of office space – about 1 million less than 111 Eighth Avenue.

that's kind of frightening tbh. so much of it must be windowless dank interior

Full of unicycles if the google Sydney office is anything to go by.

it is, but it has brick walls/ceilings/etc. -- it's nice. i hate the sun tho

xp

So where does this go? I assume city real estate is pretty fucked. Do the suburbs see a boon as a generation collectively realizes maybe walkable neighborhoods aren't all they're cracked up to be, or is the economy going to be so bad that no one can buy anything? Will mortgage lending freeze up again?