Mark Winston Griffith
Urban Legend: NYC has escaped the housing crisis
For all the members of my New York posse who think that middle class New York is immune to the housing disease afflicting the rest of the country, I have some bad news: The New York housing market is looking paler than a Manhattanite on a February afternoon.
According to a piece in today's New York Daily News housing sales in working class enclaves in Brooklyn and Queens are falling fast, while mortgage deals are scarce.
In the last four years, Brooklyn suffered a stunning 52.7% drop in the sale of homes, from 12,089 to 5,716. In the last year alone, sales fell a precipitous 37.5%.Queens was barely better off, taking a 48.4% drop in house sales in the same time period, from 17,962 to 9,266. Sales are off 34.8% in the last year.
Sellers see their homes drop into the market with a resounding thud. Only a handful of visitors show up at open houses; asking prices are slashed.
Some panicked sellers find themselves "short selling" their homes - getting less than the balance of their mortgage...
Anxious buyers fare no better. Many can't find a bank that will lend them a dime. Or their approved mortgage suddenly requires a higher down payment.
At a housing tour in Crown Heights a few weeks ago, I listened to real estate agents, non-profit mortgage counselors, and bankers alike all but put the cabash on homeownership dreams, reporting on how residents were watching the wealth they had been building in their homes leak away, while credit was drying up for all but credit score superstars and those able to throw massive amounts of downpayment cash on the table. It was heartbreaking to watch people visit and walk through Central Brooklyn brownstones, the likes of which have gone, at least for woking class strivers and middle-class renters in and around the neighborhood, from being unaffordable to unsellable.
The only positive things you can say are that most (not all) of the abusive subprime credit has dried up, and that the out of control market forces of gentrification might be kept in check for the moment.
Local and national housing policy that focuses on foreclosure prevention will help stabilize the market. Also, the private sector, in the form of credit unions and community development banks that were walled off from the subprime crisis, can help fill some of the lending gaps. A recommitment to building affordable housing wouldn't hurt either.
In the meantime, we can only hope that this all represents a market "correction" that New Yorker's middle class can survive.
Mark Winston Griffith: Author Bio | Other Posts
Posted at 11:12 AM, Oct 27, 2008 in
Housing
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