Housing prices were up one percent last quarter in Cobble Hill, the only Brooklyn neighborhood to see an increase. Across Brooklyn, the average housing price fell 18 percent, according to data from HMS Associates, a Brooklyn-based real estate appraisal firm.

Somewhere in between the release of last week’s Manhattan market reports and the moment the first burger hit the grill on the Fourth of July, real estate appraisal firm HMS Associates snuck out a second-quarter recap of Brooklyn sales action. The numbers are similar to Manhattan’s, in that they are ruthless: double-digit price declines over last year (the Brooklyn average was $548,560), sales cut in half, etc. The Brooklyn Paper has a tidy summary of the report, pointing out that the biggest price declines came in the hybrid mega-hood of Dumbo, Boerum Hill and Downtown Brooklyn. Read the full article at Curbed .

New York - Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets.

The requests are coming in record numbers, from owners of $10 million estates and one-bedroom bungalows, from residents of the high-tax enclaves surrounding New York City, and from taxpayers in the Rust Belt and states like Arizona, Florida and California, where whole towns have been devastated by the housing bust. Click here to read the full article from the New York Times.

As reported yesterday the numbers are looking even worse then we could have expected.  Unless you’re a buyer who’se in good financial shape there are very few positives that are coming out of these recent news cycles. A drop of 13 percent in the average sale price for homes around the country is a deeply disturbing trend and we’re fairly convinced that the end of this misery is nowhere in site. We will report here our annual Brooklyn Market Report in mid January of the New year.

The commercial real estate market has become the latest industry to begin actively seeking out help from the federal government according to this report in the Washington Post.

I wanted to call your attention to a fascinating article from the New York Times that uses the case study of one particular building in midtown to demonstrate how the current crisis is affecting the local market.  It includes a nice graphic (if nice is the proper word to describe such a depressing topic) that illustrates what we’re dealing with. 

On the more optimistic front, an MSNBC report did describe New York as having the ability to remain strong overall,  and that falling rents could actually make the city a more livable place to live.  Of course this might benefit the overall living situation, but landlords are unlikely to be overly happy with this assessment.  Interestingly the piece pointed to Seattle as the leading city for real estate investment at the moment. 

As a locale that has an international feel and the presence of some major corporations like Boeing and Microsoft, it does have a lot to offer.  New York made it into the top five and in terms of the bigger picture of what a city can offer, beyond just bottom line considerations, you could argue that we should retain the advantage of pretty much any other place in the US and certainly on the East Coast.

Going from the serious to the more ridiculous for just a moment, I’ll point you in the direction of The New York Observer where a column comically argues that high end divorces could be the rescue that the local real estate market needs.  Referencing settlements like that of Heather Mills, the ex-wife of Paul McCartney, that resulted in a $5million midtown home purchase, this piece is just one more possible source of optimism.  Writing only slightly tongue in cheek, the author concludes, “This is all very encouraging, really. After all, even as the real estate market collapses, there will always be divorces, and therefore angry ex-wives eager to spend their settlements on amazing New York real estate.”

So the big day is now behind us and we can begin to move ahead to the task at hand… actually confronting the many problems facing this nation and the world.  So we need to return to our focus on the local scene and the New York Real Estate market.

There actually is some good news but it very much favors the buyers and that is that the experts are coming out and saying now is the time to purchase.  An article in Forbes calls our times “unprecedented” with price declines like we’ve never seen before.  The article probes the opinions of four experts and they all pretty much voice a common view that now is the time to buy.

The problem of course is that unless you are independently wealthy, securing financing is a real challenge.  For all the obvious reasons, mortgage bankers are not willing to make the mistakes of the past. It’s a nice long piece that has the experts battling out what they think are the best moves at the moment but the bottom line is they say if you’re in a position to do so, there’s never been a better time to buy, buy, buy (real estate that is) than now.  I’d welcome your comments on this.

On the very local level, Reuters is reporting that landlords in the commercial markets are slashing prices.  The exception is the high traffic areas in mid-town where we are going to have to wait until after the holiday period to see how consumer sales go.

Our local markets are also finding the need to find innovative ways to woo international investors as reported in the International Herald Tribune. Property owners are making aggressive efforts to market themselves to Russian and Eastern European oligarchs including advertisements in their native tongues.  If successful, combined with the low prices, we’re likely to see an even more international flavor than in the past in the local ownership scene.

Yesterday the Federal Reserve cut a key interest rate by half a percentage point.  They hope this will help stimulate the failing economy.  This is the second time the Feds slashed the rates by this amount within October alone.  It is truly a frightening time we are living in.  The Government intends to monitor the market quite closely in the coming weeks and to do whatever they can to aid in this disastrous situation.

The future president of the United States will have a giant mission to accomplish, as the American people are expecting their next leader to wake them from this nightmare.  Both candidates know what is expected of them and are focusing their campaigns during these few days on this vital matter.  But can either Obama or McCain rescue us? 

The coming days promise to be historic ones for this country.  By Wednesday morning most likely (given recent elections there’s no bet that we’ll know who won by then) we’ll either have a black President-elect or a woman Vice-President elect.  Buy beyond these symbols, our trek the polls will be to choose the leader who faces probably the biggest economic crisis since the election of FDR.

There can be no overstating therefore the importance therefore of the decision that awaits us.

It’s been a couple of days now and things only seem to be getting worse…Although some might choose to put an optimistic spin when recognizing that the Dow closed down ONLY less then 400 points when at one point in the day it hovered below 800 down.  Crossing below the 10,000 marker was equally painful to watch and we’re truly living in historic- if not unprecedented- times.

The fact that Congress succeeded to vote in favor of the bailout is a positive from this perspective and we again can only hope.  On that note, I figured we’d turn our attention to the upcoming elections which is an equally fascinating topic.

Let’s begin with the local scene and Mayor Bloomberg’s announcement that he will try to convince city council to amend the current term limits and allow him to run for another term.  I look at this with some degree of ambivalence.  On the one hand he’s working to undermine a system that was democratically chosen and reflects the will of the people. I’ve even heard it described as an outrage or an insult.  On the other hand, Mike Bloomberg is the type of character who should be at the helm of NYC at a time of crisis like the one which is currently taking place.
Having managed one of the world’s largest media companies, his business savvy and resolve can be critical in looking out for the best interests of the city in bettering our financial situation.  He seem to be getting support to his idea from people in the business sector while the working class people oppose  the idea because they feel that he will raise taxes and fines to raise money for the city.  A most recent poll showed that the people in the city are strongly divided on the idea of letting Bloomberg seek a third term.

It’s a tough call for all the reasons outlined above but at the end of the day we need to look out for the interests of the city and its citizens.  Mayor Bloomberg has proven himself as a stronger leader that most of us could have ever expected so perhaps he deserves the chance to be our own local “maverick” and take on that third term.  Time will tell but it promises to be as an exciting time as ever for New York politics.

Tomorrow, we’ll take a look at the national election which is certainly no less fascinating…

As we all know by now, the last few days were ones that none of us could have ever predicted.  After the meltdown of four major U.S. financial institutions, the American people now shift their focus onto the stock market.  Following the House Republican leader John Boehner’s opposition last friday to the Bush Administration’s proposed $700 billion rescue plan, Boehner created a compromise plan which was rejected.  This in turn caused a catastrophic drop in the stock market, as sell-offs took place within minutes.  The Dow Jones industrial average lost 777 points that making it the largest single-day drop ever.  Boehner expected flack from the Democrats, but he is even facing doubt from within his own party.  Earlier the U.S. Senate passed an updated version of the bill, which holds incentives for the House, thus hoping they will authorize it.  With the titanic dive of the Dow resulting from past opposition, the Government is putting all bets on this bill’s approval, for the economic situation is in desperate need of stability. 

For those of us who celebrated the Jewish New Year over the last two days, we could pray and hope that by next year at this time things will have improved considerably.  There are many variables that will contribute to whether we see any significant type of recovery during this period.  Who occupies the Oval Office combined with what support we get from foreign markets and a whole bunch of other factors that we’ll continue to analyze in this blog.

Returning our focus for a moment to the issue of real estate, I would also like to turn your attention to a article I wrote for the New York Real Estate Journal on the related topic of the Brooklyn residential market.

The Daily News reports today that the FBI upped its list of financial firms under investigation to 24 with the additions of mortgage finance giants Fannie Mae and Freddie Mac, insurer American International Group Inc. and bankrupted Lehman Brothers Holdings Inc. The collapse of these four major U.S. financial institutions helped trigger a $700 billion bailout plan proposed by the Bush administration. Over the past year, as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. In the past two weeks, the government has taken over Fannie Mae and Freddie Mac with a bailout plan that could require as much as $100 billion each from the Treasury Department to keep them afloat as mortgage losses mount. Last week, the Federal Reserve provided an emergency $85 billion loan to AIG, which teetered on the brink of bankruptcy. Lehman Brothers was forced to file for bankruptcy after attempts to engineer a private rescue fell apart. All the companies were laid low from bad bets on complex mortgage-related securities. Also appearing in the Daily News is a piece that details stricter lending requirements in the post-housing boom. Coupled with falling house values in many areas, these two factors mean that many homeowners will miss out on refinancing given current declining mortgage rates. The New York Post gets specific in illustrating the wavering New York commercial property market. Uncertainty, financing issues and increased space on the market all factor into to the lack of stability. The sales market is already off 10 percent to 15 percent from highs last year with an even gloomier future. Some estimates have the market falling 15 percent to 25 percent from 2007’s robust levels. But with most city tenants still so far under the current market rates, rents are still likely to rise for any tenant that moves or renews. On a more personal level, Braden Keil gets specific with the goings-on in real estate news and gossip of the upper crust. Bloomberg discusses a possible move by American International Group Inc to sell assets for repayment of a U.S. government loan. AIG, the largest U.S. insurer, agreed last week to an $85 billion federal loan to stay afloat and may seek buyers for some of its $16 billion in global real estate holdings. Potential properties up for sale include some choice holdings. The New York Times takes a look at Warren Buffett’s Tuesday announcement to invest $5 billion in embattled Wall Street titan Goldman Sachs as well as the institution’s future transformation within the financial services sector.

Last week will likely be known as the 9/11 of the financial markets.  Monday brought the biggest plunge of the stock market since September 11, 2001, with the numbers dropping 504 points in a single day alone.  With the painful collapse of Lehman Brothers, to the buyout of Merrill Lynch and bailout for AIG, there was no upside.  It was a week that certainly changed history.

In an effort to help stabilize the ailing market, the government temporarily blocked short-selling in financial securities.   (Short selling is a trading method that bets the stocks will go down.)  It is rumored that short selling caused the collapse of Lehman, as well as other financial institutions.  While short selling is perfectly legal, spreading false reports about stocks is most definitely not.  Attorney General Cuomo has launched an immediate investigation into the short selling practices of today.   

Additionally, the federal government announced that it will advance a plan to buy mortgage-backed securities, which have been badly hurt by the housing and credit crisis.  This news was well received.  A 400 point surge in the stock market as well as in financial markets around the globe resulted. 

But, with the financial crises still not under control people are standing on the sidelines and wary of buying homes.  With many not acting until they see the full picture on Wall Street, we may see a significant price drop in the housing market in NYC.

The financial mess we’re in right now is going to have a negative impact on the New York City and New York State economy.  Huge losses are expected on Wall Street firms and Hedge funds.  Not to mention, the Lehman Brother employees.  The buyout of Merrill Lynch by Bank of America is sure to result in job cuts as well.  It is yet to be seen what AIG is planning after their government bailout.  But, the new CEO of AIG already stated that they are going to hold onto their good assets and will likely become a smaller company.  These job losses will cost the state and city major losses in tax revenue.  In addition, it will have a detrimental affect on the real estate market, as office vacancy rates increase, we can expect to see a drop in price per square foot.  This brings me to the aching high end residential market due to the loss of the Wall Street big boys spending their money on luxury apartment’s kin the city.

We’ve witnessed the largest government intervention in the financial market since the Great Depression.  Some criticize the government’s bold actions as Communism.  Many are concerned, and rightfully so, that these moves by the government can cost taxpayers hundreds of billions of dollars.  Even with all the uneasiness of the situation though, I believe the government did the right thing. For the short term at least, it will help stabilize the market and prevent the collapse of more financial institutions.  As President Bush noted in a special address to the nation: we must act now to protect our nation’s economic health from serious risk.  There will be ample opportunity to debate the origins of this problem later.  Now is the time to solve it.

Click for a related article, or for a related video.