patrick.net

This isn't TX! I lived there for 10 yrs and it's a DUMP!

In TX! NOT! I have been extremely anti-housing for years, but am sick of renting... I don't think prices will go down much more than 10 - 20% over the next few years. I don't want to wait another 10 years to buy when all the boomers start to sell. My husband and I are in our 40's and think it's a decent buy right now.

Realtors Are Corrupt says

mdovell says

"The median asking price for homes in San Francisco peaked in May 2006 at $668,570 and is now $277,920 (41.6%) lower."

lmao.... there isn't a house on the planet worth $688k. Not now, not ever.

Living in the empty skulls of realtors. Rent-Free.

Um...there's plenty of homes I've seen that are more than that. maybe they might not be "worth" it but they still sell for it. If people have more money and want to pay it then that's what will be paid.

1sfrenter says

Putting condos and SFH together is not helpful. Median price for SFH is not anywhere near 277K, not even in the most dangerous neighborhoods

Well condos are still livable space. Yes of course there are fees but it is still a unit that is bought and sold. To argue that housing should factor out housing would also be misleading. I think there was a slight typo. If you read it again and look at the data the 277 was looking at the 25th percentile. The median price is about 400k

DC has risen more and corrected less than just about any other market. It is still 90% above 2000 prices, far more than NY and SF and any other city.

Why? One word: government. Government spending in the area increased far faster than the economy in good times. In bad times? Even faster! Government is trying to compensate from the collapse of the economy in other areas.

It has flooded the area in cash and made DC the richest metropolitan area. Also, 9 of the top wealthiest 13 counties in the country are in the DC area.

But it will have an ugly end when either the public or bond market no longer allows the USG to run trillion dollar deficits. In the next 3-5 years, budget cuts and higher interest rates will hit the DC market HARD.

I can't say for DC proper (or VA), but in Baltimore City and some places in suburban DC in Maryland prices are way down from their peak (I have noticed Laurel, MD pricing close to 2003 levels). I think that same thing has happened in VA, especially in places farther from DC, but I'm sure that there are other people here and other places on the internet that know better.

Great comments here. Thanks everyone.

I also believe that prices should and will come down in these fortress cities, but the issue of needing a place to live is very real.

Our $2700 month SFH rental is becoming untenable (for a variety of reasons which I won't go into but crazy landlady being at the top of the list) and renting another SFH with 2 kids and pets looks like either a LONG commute (and switching the kid's schools) for all of us or renting in a sketchy neighborhood.

With rents and owning being fairly even, interest rates being low, looming inflation, and planning to stay in whatever we buy for 10-15 years, and the low vacancy rate for rentals, waiting for this bubble to burst is exhausting us.

We are looking at rentals and open homes simultaneously, and both are overpriced.

Quit both our jobs, get an RV, and home school the kids on the road???

1sfrenter says

Median price for SFH is not anywhere near 277K

That's not what s/he said. Read it again: "...median asking price for homes in San Francisco ... is now $277,920 lower."

We are in the same boat as you 1stfrenter! We pay $3000/mo. in rent and can buy this house in Danville for about the same. Why should I rent? With all the coming foreclosures, etc. rents will only trend higher not lower.... We like Danville and do not want to have a horrible commute from Brentwood or any of those other "cheaper" areas!

Too many new homes in Danville and San Ramon, too much downward price pressure, too many underwater homeloaners. If you like the house and your commute is okay, fine, but don't expect anything in that region to hold its value.

Interesting nobody mentioned Silicon Valley pricing. San Jose is not an SF suburb, it's considered its own metro region. That means Santa Clara County isn't included in the SF Case-Shiller index. Too bad, it would push it up somewhat. Alameda and Contra Costa County are full of fail.

The Facebook IPO will have some high-end home sales when the lockup ends. Look for Palo Alto to get even More Special!

GameOver says

if Wall St takes a hit the ENTIRE COUNTRY will go down along with it,

PTB will not let Wall St take a hit. Privatize the profits, socialize the losses is the new normal

http://youtu.be/9QQ0hH4MYsk (:

Too many new houses in Danville? Do you know the area? This is not Tracy or Mountain House. They are building a total of 22 new houses this year in Danville... Hardly too many!

sheltielover1 says

Too many new houses in Danville? Do you know the area? This is not Tracy or Mountain House. They are building a total of 22 new houses this year in Danville... Hardly too many!

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

i'm a second generation real estate investor/broker. people always seem to buy into reason why prices will not go down/up in certain areas. it's bullshit. i used to live on the westside years ago when everyone was moving to the burbs. now, they want to live in the metro. there will always a plausible reason to believe prices will be sustained. but, guess what? that's right...it's bullshit.

The prices in NYC have come down a bit, but won't crash. You can't judge by some 88 million dollar place that sold - that's the extreme high end, and that stuff won't change. The price range is like a separate economy/market in and of itself.

Rents have fallen (and most people in Manhattan rent), and commercial real estate prices have dropped over the past 5 years. Like I said though...it won't crash. It's boom wasn't as drastic on the way up, so it won't be as drastic on the way down. It's price run up wasn't related to an massive influx of people, followed by a massive outflux of people a few years later (I'm looking at you, Vegas, AZ, and FL). People will always want to live in Manhattan, and there will always be good jobs there. That said - don't overestimate the overall wealth of the city. Yes, it's home to a large amount of extremely wealthy people, but the majority are people in their 20's and 30's who barely scrape by, just because they want to live in the most exciting city in the world. Only the super-wealthy own property in NYC...everyone else rents or moves to the burbs and commutes in.

Hi,

Someone here should be able to help me out...but it doesn't seem the median housing prices that get reported are ever controlled for differences inventory type. Something that is controlled for inventory type/by geography would be much more useful to get an accurate measure of the actual decline right?

Thanks.

Don’t forget us here in Boston!
The ‘Hub of the Universe’ is really just a big town, with many mini-towns within – and all have a potent mix of special interests to keep our housing insanely inflated (or – realtor speak – find our new normal!)
Our mix:
+ Universities/Colleges with the tenured Profs. - making 6+ figures - having bought in the ‘pioneer areas’ for next to nothing in the 70’s/80’s (they don’t sell – they buy ‘summer retreats’ and price up Cape Cod!) Students and T.A.’s flooding our rental market.
+ Fin. Services/V.C., BioTech and Legal - all which still has tons of money flooding through! So much for the Financial Crisis - “Lay off the back office and lower tier!”
+ Medical –see both above!
+ And as Mr. Jones mentioned in NY for Public Service Unions – we have that in spades in Boston! (I grew up in one of the worst neighborhoods in the 70’s. Of the hundred guys on my corner, I was one of four who thought of college. Five went and I’m the only one still here. Of the others not dead or in jail – cops, firemen, phone, electric and transit … and all doing quite well! I can’t tell you how many I bump into; “Ya, I live in (thirty miles outside of Boston), I got a beach house and I rent my Mom’s old Triple-Decker to a bunch of yuppies/students for $___! I’m getting-out next year – getting my retirement based on salary and overtime – I deserve it, fucking right!” This guy can’t read! And I paid off my student loans!!
+ Did I mention students! So Greg and Ashley (Xavier and Lola; Quin and Chan) – whose parents paid their tuition - landed a job, so of course their parents help them ‘get settled’ by underwriting their first condo. Of course, they deserve it!
+ We have land banks and nature trusts to ‘conserve’ that old swampy lot for viewing purposes, and realtors that eat glass for breakfast!!

Before anyone calls me an underground Realtor – no go! I waited patiently (lurked!) in the last downturn and finally got my place on an RTC auction in ‘93. Can now sell with almost a zero on the end! And, I have not bought into the ‘buy-up’ bull pressed by my Realtor ‘friends’. However, I believe the ‘Fortress-World Cities’ may no longer adhere to market fundamentals?!

Is it more reasonable to recognize this - swallow the fact that I don’t make 7 figures and those who do don’t care about these ‘market conditions’ ‘cause they got the $ to spare - and make the decision to move along to a more reasonable location – since there doesn’t appear to be an honest way to wait out – if possible - this market?!

gardener1 says

Both NYC and San Francisco, or perhaps only New York and San Francisco, are America's two truly world class cities.

NYC is a world class city, but San Francisco is not. Most people outside of the US, have never even heard of San Francisco.

dunnross says

NYC is a world class city, but San Francisco is not. Most people outside of the US, have never even heard of San Francisco.

Gotta defend my city by the Bay:

"Today, San Francisco is one of the top tourist destinations in the world, ranking 33rd out of the 100 most visited cities worldwide" (from Wikipedia)

"The most popular U.S. destinations for foreign visitors included New York, Orlando, Las Vegas, San Francisco, Los Angeles and Chicago"

from http://www.dailyfinance.com/2011/01/16/us-cities-attract-more-global-tourists/

1sfrenter says

ranking 33rd out of the 100 most visited cities worldwide

Does that include all the homeless people who visit SF every winter to escape from the cold temperatures in other cities?

1sfrenter says

Gotta defend my city by the Bay:

There is a fine line between defending and hyping. Frankly we did very well for decades without the hype.

If you decide to hype, expect higher prices which kills off the economy. We already lost too many jobs due to higher costs.

Is that what you want..

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

Windemere is a Chinese ghetto! You couldn't pay me enough to live there! We are moving within walking distance of downtown Danville which is quite different than Chan-Ramon! Danville is NOT San Ramon!

Justthefactsplease says

Hi,

Someone here should be able to help me out...but it doesn't seem the median housing prices that get reported are ever controlled for differences inventory type. Something that is controlled for inventory type/by geography would be much more useful to get an accurate measure of the actual decline right?

Thanks.

The Case-Shiller Inex is very accurate partly because it is perfectly controlled for inventory type, since it tracks re-sales of the same house over time.

Also, it's not controlled by realtors!

sheltielover1 says

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

Windemere is a Chinese ghetto! You couldn't pay me enough to live there! We are moving within walking distance of downtown Danville which is quite different than Chan-Ramon! Danville is NOT San Ramon!

Knowing Danville very well, by the sounds of your posts you fit in very well there. Which is why you couldn't pay me to live there.

dunnross says

Does that include all the homeless people who visit SF every winter to escape from the cold temperatures in other cities?

Yes, but don't worry. Most other cities sweep the reflections of our choices under the rug.

New York is indeed the Capital of the World (but please have lower prices when I move there in 5-10 years), and America's best world class city, but San Francisco is pretty well-known to just about every educated person in every country. If you've heard of NY, Chicago, Boston, Philadelphia, and Los Angeles, then you've heard of San Francisco.

The Case-Shiller Inex is very accurate

Not really. The problem with Case Shiller is that it includes a very borad area. For instance, the NYC Case Shiller index includes not just NYC, but also Long Island, NJ, Connecticut, upstate, and even one county in Pennsylvania. It's absurd and you cannot possibly take it seriously when it includes such a huge area.

Michinaga says

New York is indeed the Capital of the World (but please have lower prices when I move there in 5-10 years), and America's best world class city,

It may be indeed the Capital of the World and world class city with all the benefits it earns.. I bow to that.. but not even that can justify double digit price inflation for a prolonged period of time.. something eventually has to give.

Prices in NYC are able to rise significantly because of all the foreign buyers. Plus you have Wall St. people with an endless supply of money who only pay 15% in federal income taxes.

I've been watching (and waiting) to buy in Manhattan since 2006, staying on top of this site and others. Some points here.

1) Manhattan RE has always been *expensive*. Even during the crashes when the city was a real dump, housing was much more money, smaller, and dirtier than elsewhere in the USA. This has nothing to do with the bubble; Manhattan is a small island.

2) While RE has always been expensive, it has historically made sense to buy versus rent. When you buy, you're putting down a huge down payment and tying yourself to that property for 30 years. If the numbers don't work out after 5 years, why would you do it?

3) I currently rent a small 1BR in Gramercy for $3000/month. At the height of the bubble, that apartment would sell for $650k, and now would probably sell for $600k.

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

Lets fill out the famous NYT rent vs. buy calculator with a 30% downpayment (required for coops in NYC), 4% mortgage, and a 6% property tax rate (assessment level 45%, property tax level 2 is 13.433%, at 600k means $36k in property taxes per year). Set annual rent increase to 6% and leave appreciation at 2%, which is bogus, prices are slowly dropping, but bear with me. So I fill out that calculator and... it says buying is better than renting after 18 years. That's a non-starter.

Hmm.

What if my apartment rented for $4.5k/month, 50% higher than what I'm actually paying? Plug that in, and.... it's worth buying after 6 years. So that's a marginal "OK". Now that's a bit simplistic, it doesn't take mortgage tax deductions into account. But then it also assumes a 2% appreciation, and we know that ain't happening.

So, Manhattan has always been expensive, yes. But buying has historically made sense versus renting. Right now, it doesn't.

4) Why is Manhattan different? Is it all those fancy finance types? Is it that NYC is a "world city"? Well, somewhat, but all that does is sustain the really expensive apartments, the 3 bedrooms selling for $2m+. Nothing to do with a mere mortal like me.

My feeling is Manhattan is different due to co-ops. Co-ops are notoriously picky about their residents. They go through your tax filings for the past 5-7 years, they question you extensively about your ability to pay, etc. If there's any doubt at all, if you seem the slightest bit sketchy, they don't allow you to buy the apartment. Oh, and they ALL require at least 30% down-- 40% is not uncommon. Who's going to walk away from a 40% downpayment?

This is why Manhattan hasn't been noticeably impacted by the housing downturn. My honest feeling is that prices will never really drop here; instead they'll remain steady until inflation catches up. And I'll continue to rent.

I've had a 40% downpayment saved for a nice 1BR since 2006, and if I had purchased an apartment back then rather than investing the money, I'd be in a significantly different and worse position right now.

I'd love some responses by others who've been watching Manhattan closely.

@Realtors:
Pretty sure you didn't read my post. Or maybe you're responding to someone else, and quoted me by accident.

@Gameover:
Finance has certainly driven prices up, but I'm not directly competing with those guys. The big shots have no interest in 600k 1BR apartments. At the mere mortal level (ie, mine), my feeling is prices are sustained artificially high due to co-op diligence.

Tons of people at my level are locked into overpriced apartments because they put down 40%, aren't underwater due to that, can afford to continue paying their mortgages, and can't sell for anything like what they paid.

Rod, Is the property tax rate in Manhattan really 6%? Wow. Is it reassessed every year, so that if the valuation goes up 10%, the tax also goes up 10%?

California properties are expensive, but at least the tax rate is only 1 to 1.25%, and once you have bought the place it can go up a max of 2% per year. And if valuations drop then so does the tax.

6%, that's amazing. A 600k apartment then is 36k yr or $3000/mo. That's rent!

The property tax rate in NYC is not 6%. Where are you getting these crazy numbers from? Most people in Manhattan don't actually pay property taxes directly since co-ops are assessed as one property as opposed to each apartment being assessed individually. So instead of each apartment paying $4,000 a year in taxes, for instance, the entire building will pay $2 or $3 million a year in taxes.

GameOver says

To TRULY enjoy NYC the way it was meant to be enjoyed, nowadays you need to be a MILLIONAIRE. Better yet, make that a MULTI-millionaire. Plain & simple. Otherwise you'll just be watching life go by while OTHERS enjoy it.

Is that also true for people who are long time tenants of rent controlled apartments?

Not sure where the 6% is coming from either. I live in NYC (5+ years now) and the actual property taxes here on my city appraised at $700K attached single family townhouse in Williamsburg Brooklyn are actually cheaper than my former $300K house was in Arkansas 5 years ago (they were $2500). This past year my taxes were around $1800 and I own my 20' x 50' 3 story house, on a 20' x 100' lot. We do pay a 6% income tax here though, but that largely gets offset and refunded since it counts as a deduction against federal and state taxes. When you factor in the homestead equivalent (STAR) property tax relief, my taxes are cheap compared to other places nearby. Friends who own apartments in Manhattan also pay these lower taxes on non-tax abated apartments. Yes the prices of the properties are crazy high here, but not the taxes.

GameOver says

NYC is a world class city, but San Francisco is not. Most people outside of the US, have never even heard of San Francisco.

According to Penn, San Francisco and New York people are the most annoying people in the world, in the way they both brag about how their cities are the "Greatest Cities in the World". There is a big difference, though. New York people happen to be right.

http://www.youtube.com/embed/NdTHlaTa4-4

GameOver says

WTF are you doing with the cut & paste?

Yes, sorry. I guess I wanted to cut and paste my own quote, but included your name there.

I'm also not some freako liberal who thinks the government should wipe my rear end! So I guess I do fit in Danville. I'm not some politically correct POS. I call a spade a spade! You can't convince me 2 + 2 = 5 although the current administration would like you to believe it. The U.S. deficit is the highest since Truman thanks to the idiots in the WH. Can't wait till November so we can get back to normal!! POTUS is a huge Wall Street benefactor and is selling out the lower and middle classes all for his rich liberal friends and donors. Enough said!

Tude says

sheltielover1 says

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

grywlfbg says

There's that abomination that is Windemere. They're still adding houses to that monstrosity.

Windemere is a Chinese ghetto! You couldn't pay me enough to live there! We are moving within walking distance of downtown Danville which is quite different than Chan-Ramon! Danville is NOT San Ramon!

Knowing Danville very well, by the sounds of your posts you fit in very well there. Which is why you couldn't pay me to live there.

sheltielover1 says

I'm also not some freako liberal who thinks the government should wipe my rear end! So I guess I do fit in Danville. I'm not some politically correct POS. I call a spade a spade! You can't convince me 2 + 2 = 5 although the current administration would like you to believe it. The U.S. deficit is the highest since Truman thanks to the idiots in the WH. Can't wait till November so we can get back to normal!! POTUS is a huge Wall Street benefactor and is selling out the lower and middle classes all for his rich liberal friends and donors. Enough said!

Wow--FOX news propaganda wins over reality yet again.

@Housingwatcher: You're right of course, but the NYT calculator has no box to input co-op/condo maintenance fees. They run around $800 to $1400/month on a 1BR, depending on the building. Which is obviously less than 6%, I messed up on the math.

So does anyone have anything insightful to say about housing in NYC, or is this thread going to turn into a political flamewar?