Sure happy it’s Thursday to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate. Was looking into why each of the Manhattan, Brooklyn and Queens housing price trends went solo two years ago.
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WOW! Interesting mirror image there. The more likely to be financed market took the national nose dive of 7/07, while the cash markets didn’t dip until the stock market crashed, and the mortgaged markets are coming up to meet the cash guys.
Fun stuff. I bet our high end vs. low end markets will look the same. I’ll try it.
I’m sort of in Ardell’s camp since I’m always looking for an explanation. Why not track that decline with unemployment and the median income for each borough or some sort of ability to re-pay indicia?
Ardell may be right that there was some sort of focus to over-mortgage some areas. I don’t know much about NY, but I hear stuff about “war zones” and my bet is that there are areas of chronic lower income. We know now that there was a period of time when all that was required for a mortgage was real estate and social security number.
The market here is minuscule in comparison, but we do have an area where the income is lower and the foreclosure activity is higher. My theory, the “mortgage bubble” jacked prices in that area so much so that OFHEO reported negative appreciation for the entire MSA. I tried to get OFHEO to give me the addresses of the dipping re-sales, but they declined on the basis of some kind of confidentiality. Don’t why they can know and I can’t, but that is another issue. (Fannie kept Cuomo out of her records with HAVOC, me they just say no. I get no respect).
Bottom line, I think there was some targeting of the “re-fi-bye-bye” into the lower income, less sophisticated areas where the recovery cushions are slim. I guess this has been dubbed sub-prime, but I think it was deliberately targeted. Easy pickins?
Have you got enough stuff to try a study of that in your market or is my head in the metric clouds?
I agree that there may have been some targeting going on. Our appraisal firm’s reo appraisals are concentrated in certain areas…not sure it was coincidental.