6 ms·

NYC housing prices in near 'free fall,' conditions mirror recession era

27 points by mudil 7y ago

KingMachiavelli 7y ago
> In July, New York City increased its mansion tax – a progressive tax that applies to home sales of more than $1 million – to a maximum of 3.9 percent, up from a flat-rate of 1 percent. A bunch of other tax changes and reduced deductions have occured recently that make buying/owning expensive units more expensive - especially for frequent buyers/sellers. So I'd be inclined to think the trend is evidence of less short-term speculation rather than a 'true' downturn in NYC real estate.
astrea 7y ago
I don't think all these "recession signs" articles serve any productive purpose. That aside, the article itself mentions this situation is due to the hiked taxes. Anecdotally, I don't see many people in my age cohort looking to buy property anyway, let alone a million dollar condo in NYC. Changing perspectives?
- gamblor956 7y ago
  It's Fox News. They probably received a mandate from Murdoch to cast it as a recession-warning to match what Trump has been saying. (Murdoch kept the Fox TV stations and Fox News when he sold Fox to Disney.)
gamblor956 7y ago
Importantly, the housing prices that are falling are those for units at the top end of the market, i.e., above $3 million in price. A lot of those expensive condos (25% per the article) remain unsold because they're expensive, the foreign buyers who used to buy most of them can't get their money out of their home countries, and now buyers need to pay an additional tax on top of their condo purchase. Three's still a lot of demand at the bottom end--if you can find any units in that range for sale.
- dev_dull 7y ago
  There's tons of demand in a lot of hot areas (such as bay area and NY) in the "low end" range of $1m (I know right). Just look at redfin in these areas. Anything reasonably nice under $1m is a hot home. There's too many things working against the high end: higher property taxes, lower tax incentives (SALT reduction), and higher interest rates.
  - user5994461 7y ago
    What do you get for $1M in NYC? 1 bedroom, 2 bedroom? With a commute how long to Manhattan?
    - citiguy 7y ago
      I think you can get a 1 Bedroom in Manhattan for less than a million - maybe $800k or so. But it will be further away from the subway. So in a neighborhood like Yorkville. As always, it's all location, location, location, so it depends.
- tachyonbeam 7y ago
  AFAIK, that's how it starts. Top end unit sales fall, top end unit prices fall, and this starts a domino effect. That 3 million dollar condo now sells for 2.5M. The condo that previously sold for 2.5 now looks overpriced, it falls to 2M. The condo that was previously 2M now has to sell for 1.5M, and so on. Eventually, your 1 million dollar condo can't sell for a million anymore, because you can buy something nicer for one million.
  - mywittyname 7y ago
    The pool of potential buyers increases as you move down market. So prices may fall 25% for the absolute top of the market without affecting the median price at all.
t34543 7y ago
I used to live in NYC, and so much money went to both taxes and housing. I do hope living costs come down considerably, a lot of people can’t afford to save while living there.
rasz 7y ago
Meanwhile retail rent is all time high with some storefronts going^^^^being listed but never rented for over $200/ft.

27 points by mudil 7y ago

> In July, New York City increased its mansion tax – a progressive tax that applies to home sales of more than $1 million – to a maximum of 3.9 percent, up from a flat-rate of 1 percent. A bunch of other tax changes and reduced deductions have occured recently that make buying/owning expensive units more expensive - especially for frequent buyers/sellers. So I'd be inclined to think the trend is evidence of less short-term speculation rather than a 'true' downturn in NYC real estate.

astrea 7y ago

I don't think all these "recession signs" articles serve any productive purpose. That aside, the article itself mentions this situation is due to the hiked taxes. Anecdotally, I don't see many people in my age cohort looking to buy property anyway, let alone a million dollar condo in NYC. Changing perspectives?

gamblor956 7y ago
It's Fox News. They probably received a mandate from Murdoch to cast it as a recession-warning to match what Trump has been saying. (Murdoch kept the Fox TV stations and Fox News when he sold Fox to Disney.)

gamblor956 7y ago

Importantly, the housing prices that are falling are those for units at the top end of the market, i.e., above $3 million in price. A lot of those expensive condos (25% per the article) remain unsold because they're expensive, the foreign buyers who used to buy most of them can't get their money out of their home countries, and now buyers need to pay an additional tax on top of their condo purchase. Three's still a lot of demand at the bottom end--if you can find any units in that range for sale.

dev_dull 7y ago
There's tons of demand in a lot of hot areas (such as bay area and NY) in the "low end" range of $1m (I know right). Just look at redfin in these areas. Anything reasonably nice under $1m is a hot home. There's too many things working against the high end: higher property taxes, lower tax incentives (SALT reduction), and higher interest rates.
- user5994461 7y ago
  What do you get for $1M in NYC? 1 bedroom, 2 bedroom? With a commute how long to Manhattan?
  - citiguy 7y ago
    I think you can get a 1 Bedroom in Manhattan for less than a million - maybe $800k or so. But it will be further away from the subway. So in a neighborhood like Yorkville. As always, it's all location, location, location, so it depends.
tachyonbeam 7y ago
AFAIK, that's how it starts. Top end unit sales fall, top end unit prices fall, and this starts a domino effect. That 3 million dollar condo now sells for 2.5M. The condo that previously sold for 2.5 now looks overpriced, it falls to 2M. The condo that was previously 2M now has to sell for 1.5M, and so on. Eventually, your 1 million dollar condo can't sell for a million anymore, because you can buy something nicer for one million.
- mywittyname 7y ago
  The pool of potential buyers increases as you move down market. So prices may fall 25% for the absolute top of the market without affecting the median price at all.

t34543 7y ago

I used to live in NYC, and so much money went to both taxes and housing. I do hope living costs come down considerably, a lot of people can’t afford to save while living there.

rasz 7y ago

Meanwhile retail rent is all time high with some storefronts going^^^^being listed but never rented for over $200/ft.