patrick.net

I don't know about NYC (I lived there many years). The inventory is just very limited but I think there is a bubble by price to income.

SwamiAlex says

You can't fight the fed.

Hey, I don't think there's anything more fundamental about the United States constitution than fighting the fed. Buck up, my fellow American, you can do it too.

Bob Jones says

2. Public Employees - This is not a Democrat or Republican rant. At least on Long Island (included in NYC housing stats), a cop starting salary is $105k / yr. Teachers earn $80-$90k. Median HOUSEHOLD income on long island is $78k for two income earners. I feel for teachers and cops in places like Wisconsin and FL where they don't make much, but here they earn much more than private sector workers. Declines in property taxes have caused mass layoffs in this area which are finally impacting the local economy.

Not to nitpick, but I am an NYC firefighter. Cops don't make 105k starting here. Suffolk county which you cite, does not make 105k starting salary. They make 45k. They reach 105k after I believe 5 years. The FDNY and NYPD do not reach anywhere near that in base salary, Suffolk is an anomaly. It is also a relatively small police force of about 2500. The NYPD is around 33 thousand I believe, and the FDNY is about 11 thousand, to give you some comparisons. So I would have to guess that they do not make that much of an impact on the economy as you say they do. For me to make over 100 grand in base pay, I would have to be promoted twice, and once again, the pay goes up in small steps after promotion. It takes years to get there, civil service isn't all it is cracked up to be. (It only has been cracked up to be anything since the financial industry took a dump, before that we were a laughing stock who routinely got 0% contracts while investment bankers made millions in bonuses). I am trying to keep this out of the political realm so I digress. We do it because we love the job. Period. NYC teachers make 85 grand after like 15 years of continuously being employed, and they are all MISERABLE. I find it laughable comparing us to private sector employees. I have a friend who I went to school with, who is working for Morgan Stanley pulling in more in salary and bonuses than I will ever make. He isn't anything special, just an analyst that graduated from Fordham. And he doesn't have to work in the elements daily, work nights, holidays, weekends, or put his life on the line behind his desk. But he doesn't have the best job in the world either.

Anyway, I would be interested in any insight you can offer into the outer boroughs on where real estate prices are headed over the next 5 years. I am starting to save up a substantial downpayment for a rental property here in the Bronx. NYC is very different than any other city in that it is one city comprised of 5 boroughs. When people talk about NYC they think Manhattan, but that's only one borough. Everyone knows prices aren't budging there. I would like to know if the 4 other boroughs are going to experience severe price decreases, I doubt it but I think they might fall very little over the next 4-5 years, and then maybe a little more when interest rates go up (if they go up).

I agree with Outsider about the income vs price here. It is damn near impossible to afford a house here and put down 20% with the income I make as a lowly firefighter. And now even that the financial sector is shaken, you need an MBA just to find an entry level job. Honestly, 500 grand doesn't get you much here, and how many people have 100k liquid in their early 20s? To own here it seems you have to put family, marriage, everything on hold, just to get a savings built up to by a home, which is ridiculous. I personally did not want to be changing diapers in my 40s, so I bought a 2/1 800 sf coop in the Bronx (detached home on a 20X40 lot.) It cost me 97 grand after negotiating and I think I got it at a steal. I could have probably got a 1600 sq ft house in Ohio for the same price, and it wouldn't have required the renovation that mine did though.

TechGromit says

Oil Can says

It's starting to happen in LA, we just need 6% mortgage rates and it's all over.

Don't look for 6% interest rates anytime soon. The only reason the fed raises interest rates is to try to slow down an over heated economy, and the economy is pretty dead right now. I don't foresee-higher interest rates for at least 5 more years and more like 10 years before rates hit 6% again.

Fed does not control mortgage rates!

I forgot to mention the almost inevitable occurrence of another terrorist attack in NYC, which seriously shook the financial sector for a while 10 years ago. If that were to happen again, I think it could cause some problems for us economically.