New York-area home prices still to plunge?
December 11, 2009 02:00PM
Mark Zandi, Moody's chief economist
While the rest of the country looks forward to a bit of a respite in the hard, grinding slide of property prices, New Yorkers will enjoy less relief in 2010. Mark Zandi, chief economist of Moody's Economy.com, said prices are still inflated compared to rents, eroding the possibility of price improvements in the near future. The New York City metro area ranked 84th-worst out of the 100 markets in his forecast, with the 2009 median home price of $416,730 expected to fall another 15.63 percent, ahead of his national forecast range of 5 percent to 10 percent. Rounding out the regional duds, Nassau County in Long Island ranked 76th, with the $368,260 expected to drop 13.14 percent and Newark, N.J. was No. 71, with the $367,380 median slated to drop 11.29 percent. [Fortune via CNN Money]
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Comments
Anonymous
God Zandi is a miserable little creep! This little police state apologist who worked for McCain--when is this tiny monkey going to kill himsef?
Comment #1 Posted By: Anonymous 12/11/09
Anonymous
Zandi may be right. NY to fall another 10% and stay there for 3 yrs. Rent vs buy now severely favors renting. In some coops maintenence is about 70-80% of what rents are. Factor in mortgage (despite deductions), legal fees, obscene 6% commissions and loss opportunistic income from laying out a downpayment of 20-25% renting looks real good. Doesnt make sense to buy when renting makes more business sense.
Comment #2 Posted By: Anonymous 12/11/09
Anonymous
He's referring to the NYC metro area: a pretty large number of properties and different sub-markets. I would not take that % as particulary accurate, yet the trend is negative and there is no reason to think that the market is going to improve next year.
Comment #3 Posted By: Anonymous 12/11/09
Anonymous
obscene 6% commissions? You must work on Wall Street.
Comment #4 Posted By: Anonymous 12/11/09
Anonymous
6% is obscene. Imagine paying for a stock a 6% charge! The business of real estate brokers should not even exist as a profession. Brokers at best should receive 2-3% commissions. Most brokers rely on deception and perception. There is no such thing as a buyers broker...in this scenario its 3 against 1...seller, seller broker and buyers broker all against the buyer. I sold my house without a broker in 3 weeks ...saved about 40K for about 10 hrs of work...I prefer not to use brokers in any transactions
Comment #5 Posted By: Anonymous 12/11/09
Anonymous
I agree w #5. Internet makes brokers obsolete...now tell that to lawmakers who get paid by RE lobby.
Comment #6 Posted By: Anonymous 12/11/09
Malcolm Carter
#3 is right and #5 has it all wrong. Seldom does the brokerage (not individual broker) collect 6 percent; individuals normally get a fraction of 2.5-3 percent. And of course buyer broker must, by law, represent the best interests of the buyer. As for #3, the metro area encompasses a huge area--all the boroughs and their distressed areas (e.g. Jamaica, Queens), plus farflung suburbs in Westchester County and in New Jersey. In Manhattan, foreclosures are practically nonexistent, and everything I'm seeing and reading suggests that Zandi's generalization is way off for that borough. I've posted my views in greater detail about both issues recently at ServiceYouCanTrustBlog.com.
Comment #7 Posted By: Malcolm Carter 12/11/09
Anonymous
Mark Zandi is a brilliant economist. I think 15% is being kind. More like another drop of 25-40 percent.
Comment #8 Posted By: Anonymous 12/11/09
Anonymous
Multimilliondollar salaries to ball chasing athelets. Multimillion dollar bonuses to Wallstreet which got us in trouble to begin with. Multizillion dollar corps that rule this world and rob people of their money, health and wellbeing by selling poisoned food and then passing the buck to the big pharma is what is obscene. Not a 10K or 20K fee to a broker for work , time and energy that translates to a measly compensation for months of work at times. Sell your house in the burbs on your own. In Manhattan just to do the board package is well worth hiring a broker. I really wonder why, if brokers are so obsolete, everybody hires us in the end. Why dont they just post an ad on Craigslist ?
Comment #9 Posted By: Anonymous 12/11/09
Anonymous
40% more on the downside....here it comes...
Comment #10 Posted By: Anonymous 12/11/09
Anonymous
Thank you Mr. Zandhi, for telling it like it is. You may being way too lenient.
Comment #11 Posted By: Anonymous 12/12/09
Anonymous
Brokers should be obsolete. id rather hire a lawyer for a fee of about 6 hrs of his time to do "board package". Brokers make me laugh so hard at their whining. My lawyer did the work for about$2200 which included the closing. Much much less than 40K!! Brokers have powerful lobbyists in DC favoring them. Internet sites are being pressured and blackballed by the bigs and will not be given any MLS to even playing field. In a perfect world a seller should simply have property appraised, list it on a legit site and sell property without meddling brokers to inflate the price and create barriers to the sale. Also by law buyer's brokers are SUPPOSED to work for the buyer...NO SUCH THING..they work for themselves to maximize commission...no more no less.
Comment #12 Posted By: Anonymous 12/12/09
Anonymous
Zandi prediction of 15% is right but more importantly what gonna happen in the next 5-6 years???...I d say no price appreciation for a long long time!! RE sucks as an investment now...Id rather put my money in an index fund in stock ...but do it after the crash which is due to come soon. NY stagnant for about 5 to 10 yrs.
Comment #13 Posted By: Anonymous 12/12/09
Anonymous
"Buyers brokers by law must work n the best interest of the client"...yeah right!! Try working in the best interest for their wallets. What a joke! Buyers always gets the shaft!
Comment #14 Posted By: Anonymous 12/12/09
Anonymous
NYC to drop another 10-30%...buy in about 12-18 months...this recovery is not sustainable.
Comment #15 Posted By: Anonymous 12/12/09
Anonymous
#12: NY is not the only place on Earth where people hire real estate brokers, just stop complaining and simply do not hire a broker, sell by yourself buy fsbo and good luck
Comment #16 Posted By: Anonymous 12/12/09
Anonymous
Only in here do brokers get 6% other places much less
Comment #17 Posted By: Anonymous 12/12/09
Anonymous
#18, you have no clue, this is a free market. what is your job, let's see if your industry charges too much and if your salary is fair, ok?
Comment #18 Posted By: Anonymous 12/12/09
Anonymous
Whole point is that it is not free market. If real MLS existed and it doesnt because of collusion and if the free market was allowed to operate then websites can sell properties without interference from large firms. What is needed ebay for real estate; there is no need for brokers at all. Brokers and large firms would be quaking in their boots should this ever come to fruition.
Comment #19 Posted By: Anonymous 12/12/09
Anonymous
Mark Zandi is being too kind here. 15% seems too little. But as long as he is not being paid to make these negative forecasts I will continue to believe him. Unfortunately I cannot say the same about these high profile shills that work for them super firms that are always pollyanna.
Comment #20 Posted By: Anonymous 12/12/09
Anonymous
Yeah right to brokers obsolete. ha ha ha . To all the FSBO s out there good luck just put an ad online you will sell . Call me just in case you dont. Wonder why we still exist ???? Why do all the moron sellers ( 99% of all sales) list with us. We doint need doctors either I can diagnose myself ( online ) and then buy drugs ( online ) instead fro the mafia pharma.
Comment #21 Posted By: Anonymous 12/12/09
Anonymous
#20, Ebay does allow to sell real estate too and there are so many good websites that allow to advertise your property. The point is that real estate in not comparable to standardized products or financial products. NY does not have a MLS but something extremely similar, come on you are not informed and you are lowering the level of this discussion.
Comment #22 Posted By: Anonymous 12/12/09
Anonymous
it is true we brokers area slime why deny it, it is an easy profession, anyone can get into it and make money, and yes I will continue to take advantage of anyone that lets me, I will sell, rent or whatever I have to do to put food on my table and I dont care what anyone says, i will not apologize for making a living and I am no different from all those rats on wall street, so make you guys make peace with the fact that me and another thousand are here to stay and continue to pick your pocket for 6% and that is a fact.
Comment #23 Posted By: Anonymous 12/13/09
Anonymous
hey you paid 6% ? well thats life baby I wont apologize for being better at my job of getting 6% out of you than you are at not paying it to me. I just happen to be a better salesman than you are a smart buyer/seller Yahooooooooooooooo
Comment #24 Posted By: Anonymous 12/13/09
Anonymous
yeah baby we are here to stay hide your wallet I am coming to your open house and I will get you to sign an exclusive on the spot because youre a moron
Comment #25 Posted By: Anonymous 12/13/09
Anonymous
Capitalism at its best or shall say at its worst. Wall ST, Big Pharma, NAR it s all the same
Comment #26 Posted By: Anonymous 12/13/09
Anonymous
I agree with #8. Home prices are going to fall a lot more than 15% as zandi says. The gov't doing everything they can to prevent the real landslide from happening, but it will happen soon anyway. Suckering first time buyers in with an 8000 credit and low rates- they will only lose their entire downpayment in 2 years or be severly upside down like everyone else when prices continue to plumet in NY after all the subprime AND prime foreclosures hit the market. I wouldnt buy now rather invest money and rent until the smoke clears in a year or two. Brokers are crooks and i dont need to give them a cent of my hard earned money.
Comment #27 Posted By: Anonymous 12/13/09
Anonymous
I would not use a broker in any transaction whether it be buying a house, buying insurance, buying stocks, etc. Why? Bottom line is the broker is going to tell you they did the work of getting you the best deal possible. How do you know? You don't !! Do the work yourself- comparative shop, research and everything else (that the brokers claim to do)- and then YOU will get YOU the best deal possible and save money. The brokers best interest is THEM and their commission not YOU. You're just another sucker to them.
Comment #28 Posted By: Anonymous 12/13/09
Anonymous
ditto #29
Comment #29 Posted By: Anonymous 12/13/09
Anonymous
Comment #24 Spoken like a tru broker. At least he is honest. Buyers are overpaying suckers!
Comment #30 Posted By: Anonymous 12/13/09
Anonymous
This blog/comment section has really hit a nerve!
Comment #31 Posted By: Anonymous 12/13/09
Anonymous
Brokers are like 8 track tapes and cassettes. No use for em. At least tape and cassette doesnt pick my pocket. Hold on tight wait for another drop in NY. Zandi not popular with brokers right now cos he's costing them money with his opinion which I think is going to be accurate.
Comment #32 Posted By: Anonymous 12/13/09
Anonymous
Insiders say another mild drop in 2010. Wait to buy in 2 yrs. Brokers tell u all kinds of BS. Just the nature of commission based business. Dont take your brokers too seriously as they depend on sales to bring food to the table.
Comment #33 Posted By: Anonymous 12/13/09
Anonymous
Math on renting 2 BR for $3000 vs buying for $1.25 M favors renting now. assuming maintenence is $1900 .Imagine when interest rates go up to 6.5% and govt incentives expire. Only way but down. Anyway you cut it cant see any type of real recovery.
Comment #34 Posted By: Anonymous 12/13/09