Even though the new Case-Shiller Index shows that housing prices in the New York region have fallen by 9.2 percent this past year, a Manhattan apartment – and for that matter a Brooklyn apartment – still seems to be a pretty expensive proposition. This is what happened when a young couple paying $3,300 a month for rent in Manhattan went out to look for a new apartment according to the NY Times:
A two-bedroom reconfigured into a three-bedroom was available at Chadwin House, circa 1962, on Seventh Avenue near 18th Street. The 1,100-square-foot apartment was originally listed for $1.949 million, but the price dropped to $1.25 million by last spring when the Thomases saw it. Everything about the interior felt dated; they had no interest in doing renovations … An agent said there were great values on the Upper East Side. But there was only one subway line there. “Being mobile is important to us,” Mrs. Thomas said …
Instead, they decided to hunt in Brooklyn, where so many subways converge. “It was hard to turn back once we saw what square footage we were getting for the same price,” she said. A two-bedroom on Amity Street in Cobble Hill, for just under $1 million, took up the top floor of a four-unit brownstone … They were captivated by One Brooklyn Bridge Park, a former Jehovah’s Witnesses printing plant by the waterfront …“Thankfully, it was $1.7 million,” he said. “It was so out of our price range. You lament the fact you are not rich and cannot buy it. If it were $1.3 million, we would have been trying to scrape up pennies to see if there was any possible way.” …
They gave Chelsea another try, visiting a two-bedroom on a low floor in the Milan Condo on busy West 23rd Street, on offer for around $1.2 million.
An ad for the 27-story BellTel lofts, the 1930 Art Deco building once housing the New York Telephone Company, seemed “like just another listing” amid the condominiums in downtown Brooklyn … So the agent showed them to a unit on the second floor … Once inside, they were awestruck. It was by far the biggest place they had seen — more than 1,700 square feet. The price, they were told, had just dropped to $799,000 from $899,000. Monthly common charges were in the mid-$400s. They overlook a row of closed storefronts …“You set a budget and everyone shows you stuff at the top of your range,” Mrs. Thomas said. “I am less stressed than I would be if we bought a $1.2 million apartment.”
For the statistically minded, the Case-Shiller Index value for NY is 183, or 83 percent appreciation, over 2000 values, by far the highest of any region tracked by their index. Washington, D.C. is second, followed by L.A., and, surprisingly, Miami. Phoenix is 123, Dallas 115, Alanta 113, Cleveland 105, and Detroit 80 (meaning its current values are roughly 20 percent less than 2000).
March 8th, 2009 at 5:10 am
83% growth in real estate prices in 8 years? Sounds like an asset bubble. There’s no reason for the NYC real estate bubble to hold up much longer, especially with soaring unemployment, devastated investment portfolios, business bankruptcies, commercial real estate defaults, and other terrible omens. NYC real estate is standing at a precipice.