Joseph DeVito, Real Estate Pro in Brooklyn, NY

The estate of Real Estate in Brooklyn, New York . What does the trulia family in New York think ?

Asked by Joseph DeVito, Brooklyn, NY Tue Apr 1, 2008

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I am not worried about interest rates going up. The days of easy access to money that fueled the housing bubble are long gone. Average Joe has only X dollars to pay for a house. If interest rates go up, housing prices must come down or Average Joe will not buy.
I'd rather have higher interest rates paying for a lower priced house. When interest rates come back down, I can refi. But when I overpay for a house, thats pretty much permenant.
Many of the more desirable areas of Brooklyn are still bubbly. But prices are coming down. I am patiently waiting.
1 vote Thank Flag Link Sat Apr 26, 2008
The entire world's financial community believes the NY metro real estate will decline significantly. The lastest numbers in the Case-Schiller report have the NY metro area at 200.49 in January 2008. The futures are currently trading at:

May-08 198.6
August-08 192.8
November-08 189.8
February-09 182.6
May-09 180.8
August-09 185.4
November-09 182
May-10 177.4
November-10 177
November-11 173.8
November-12 162.4

So basically, the world is betting on a 20% decline in NY area housing in the next 5 years.
1 vote Thank Flag Link Wed Apr 2, 2008
In response to the 2 previous posts...
1. It's Already Begun....Write Back To Me In 8 Months

Mortgage Rate Watch
Region: US Show Rates

This Week Last Week Last Month
30 Year Fixed
6.03% 5.88% 5.85%
15 Year Fixed
5.62% 5.40% 5.34%
5/1 ARM
5.68% 5.48% 5.67%
1 Year ARM
5.29% 5.10% 5.24%

2. I got the sarcasm, but I didn't think it was funny. It is actually a great time to buy for 3 reasons.
1 - Prices have come down over 8% on average in the past year and a half.
2 - Mortgage rates are still historically low, but won't stay that way much longer
3 - Home values will eventually get back to what they were 2 years ago and exceed that value.

So yes, it is "great, great, buy, buy, buy"......today you can buy a home for less than it was 2 years ago, still get the same mortgage rate from 2 years ago and wait 2 more years to see the value start to go back up.
We May Be In The Worst Housing Market In US History, But It Will Not Last Forever.
0 votes Thank Flag Link Sat Apr 26, 2008
Mike I think you may have misunderstood the tongue-in-cheek sarcasm of that post.

Brooklyn and to a lesser extent Manhattan real estate is significantly overvalued. I cannot imagine any long-term demographic reasons for the near doubling of real estate prices in the span of 2-3 years (2003-2005). In my own experience there has been an undeniable rise in demand in that time mostly due to cheap loans, loose lending practices and constant real estate agent cheerleading. I believe we are now returning to stricter lending practices which will greatly lower the pool of available buyers.

I understand that it is in every agent's interests to promote and even create demand through psychological means including advertisements, and posts on this website. I have yet to see a single real estate agent to ever admit that there are good and bad times to buy property. For some reason no matter what's happening it's always great, great, buy, buy, buy.
0 votes Thank Flag Link Fri Apr 25, 2008
yes, but hte spread between the 10 year treasury yield and mortgage rates is as high as its ever been. This is very unlikely to continue, so any raises to the fed funds rate will likely be mitigated by this spread closing. The weblink below has a graph for 5 years of NY rates vs the 10 yr treasury yield. The spread is currently 100 bps higher than its averaged over the past 5 years. That would take huge yield increases if the spread decreases.
0 votes Thank Flag Link Fri Apr 25, 2008
If the Fed is taking steps to address economic weakness by lowering rates, that likely means that a return to faster growth, and possible higher inflation as well, is coming sooner rather than later. Supply, demand, competition for money, inflation, the economy and expectations, but it's mainly the 10-year Treasury bond (yield) that has the direct effect mortgage rates increasing or decreasing. Too much supply, not enough demand; prices had to go down and yield had to go up to attract investors.
0 votes Thank Flag Link Fri Apr 25, 2008
Mike, why would rates go up in the next 8 months?
0 votes Thank Flag Link Fri Apr 25, 2008
If you asked the "Real Estate Pros" just two years ago if the market would decline in the next 5 years, they would tell you that you are nuts! They would say that the NY market will always be up-up-up! They were wrong then, they are wrong now.

Why trust their judgment now? Even if they are sincere, they are invested in maintaining a delusional optimism. Today's real-estate numbers show continued buildup of homes for sale. NY is not immune to this national trend.

I am in the market as a first-home buyer. My current strategy: build credit, build savings, and WAIT. I am not catching a falling knife on my first home purchase.
0 votes Thank Flag Link Thu Apr 24, 2008
As a qualified Real Estate professional I have to make sure that only positive comments are accepted to this question. Otherwise, some impressionable buyers might think that paying half a million for a condo in an area with a 35K median salary may be just a tad too much. We wouldn't want crazy ideas like that floating around. Who knows they might check the historical prices and see that a condo which cost 350K in 2003 for some magical reason is now selling for $600K. We'll have to attribute it to all those foreign buyers pouring money into the deep corners of Brooklyn.

So basically any time is the best time to buy and/or sell, so long as I get the comission. If you see something you like you should definitely borrow more then you can afford and pay more then it's worth. After all, the higher the price, the higher the commision ! So raise the roof with the prices. Buy, buy buy!

You're putting my kids through college :)
0 votes Thank Flag Link Thu Apr 24, 2008
It looks like the worst is behind us. Prices have declined in most areas of Brooklyn an average of 8.2% over the past 18 months. We can expect to see a slight continued decline for the majority of 2008, but prices will level off towards the end of the year. For 2009 & 2010 expect to see prices remain flat for most neighborhoods, which is better for home owners. When it comes to buyers, we should see mortgage rates increase over the next 12 months so the cycle will turn as we get into next year.
0 votes Thank Flag Link Thu Apr 24, 2008
That's a great question Joe!
The real estate market in Brooklyn is doing just fine. There has been some adjustments that have happened in many of our neighborhoods over the past few months due to the sub prime collapse and other economic market conditions. Rest assured, I see that some areas are maintaining their own. Since prices have adjusted and interest rates and programs are now more favorable we anticipate the pent up demand to cause the market to bloom, just in time as the flowers bloom.
Have a great Spring...I know you're the tops in Bensonhurst and Bay Ridge. Enjoy!!
0 votes Thank Flag Link Wed Apr 2, 2008
Joe, Brooklyn has a great history--and a terrific future! Its location, housing stock, professional sports, parks, world-class cultural institutions, waterfront, colleges, charter schools, and vibrant commercial strips, Brooklyn has all of the elements for a smart long-term play. GerryV (vazquezgerry@yahoo.com)
0 votes Thank Flag Link Wed Apr 2, 2008
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