The Sky is Falling!

Have you taken a look at the resale units recently? Particularly co-ops? Most of the sales in the third quarter of this year were for units that went to contract some time ago. First and second quarter of '08 is where you may notice the effect.

Spunky has assured me that the sky IS falling, and I always listen to Spunky.

These units closed in the third quarter during the peak of the credit crisis. What happened to “the sky is falling because no one can get a mortgage”?

They got their mortgages lined up before the extent of the credit disaster was known. I would hardly call July-September the "peak" of the credit crisis. They've been revising estimated losses weekly recently.
Banks LIKE to give mortgages. Alot. Their shareholders may not be so happy about this.

Bull. Q3 was MUCH tighter than Q4. Not even a question. Lining up a mortgage means squat. Closing is all that matters. Face it, the doomers were wrong.

aboutready yes you are right we are in a disaster period. Soup lines forming in Manhattan, Banks closing, Brokers jumping out the window, lay offs mounting, credit crisis is exploding to unimaginable proportions . Yes your wish of declining apt housing will come as soon as today

JuiceMan - tell that to the folks at Citibank. Oh, and Bear Sterns. Oh, and Merrill. Oh, and UBS and CS. Tell that to the Fed, they should feel free to increase the interest rates now, there's no disaster, so how about we take care of the dollar? Right.

what do you think the impact of the mega closings (15 CPW, The Plaza etc) have skewed these numbers (20%+). Perhaps these numbers just called the top of the market?

Of course they've skewed the figures. I have WAY too much time (I really need to get a job) so I've been scrolling through the co-op listings. If you need to sell, it's pretty grim. The glam condos that were put on the market earlier are now closing. People who can afford these units can generally get a mortgage.

You have a knack for changing the subject when you are wrong. Q3 was the most difficult period in the last 10 years (at least) for credit worthy individuals to secure a mortgage. It has since improved dramatically. You cannot deny that prices went up 20% for Q3 YoY in the most difficult mortgage environment in a long, long time. That has nothing to do with the sh*t storm ahead for the banks with balance sheet issues, or the dollar, or the poor, or the weather, or whatever the hell else you want to rant incessantly about

aboutready - you've been unbelievably active on all boards, at weird hours. Your point being...?
Manhattan is an island. The island. Everyone wants a piece of it, period. Scrutinize the numbers all you want, over-analise them all you want, but the end result is always the same - people buy things they can. Real estate is a thing.

Aboutready let me get this right. You presently rent an apartment in Cooper Village and you use to own an apt in Manhattan but sold that so you can invest in a house in red hot upstate NY. Now you are hoping prices to come down so you can get out of the rat hole you're living in an buy an apt in Manhattan.At present you feel prices to be higher than what they should be in Manhattan so you are trying to time the market so they come down to a fair price you can be comfortable with. Am I somewhat correct.

Spunky, why do I think that answering you is a bad idea?
I made decisions that were not necessarily wise because I was unaware of what the fine folks in the mortgage industry were up to. I don't think, at this point, that waiting is unwise.
Inquirer, who cares when I'm on the boards. I'm bored, OK? Talk about overanalysis. Manhattan was an island in the mid-90s also, but you could get a two bedroom for $180,000. Has the island gotten that much better?
Juiceman - I was just responding to Cpalms. I never denied that prices went up. I think that those pesky little issues (although not the weather, and honestly we have Spunky to thank for the weather comments) will affect the real estate market going forward.

aboutready --

Not to pile on too much, but maybe you could afford some "overpriced" RE if you got a job, instead of wishing that the market will collapse and posting on these boards.

Just a thought. I hear Corcoran is hiring.

Hey that's funny (and I'm not being sarcastic). I still need to go to graduate school to get any sort of job that will pay more than the expense of going to work (child care, clothing, dry cleaning, income taxes, etc.) I put my husband through law school because our parents couldn't afford to help. I am now considering either law school or public policy grad school for 2009, when our daughter starts travelling by herself and we can afford the added expense of my education. I must confess the prospect of returning to school is daunting.
Corcoran...unfortunately I really don't think I have the patience to deal with the clients.

What is the Real Estate Board of New York?

The Real Estate Board of New York was begun in 1896 as the first real estate trade association in the state. Real Estate Board members are New York City’s most talented, energetic and influential real estate professionals. Once membership is approved, members belong to their industry’s leading trade association within New York. REBNY works on behalf of its members to promote public and industry policies and frequently speaks before government bodies to, among other things, expand New York’s economy, encourage the development and renovation of commercial and residential real property, enhance the city’s appeal to investors and residents and facilitate property management.

Hmmmm....not exactly an independent source. The MillerSamuel report below shows median prices are down 3.4% in Manhattan for the year ending thrid quarter. Would like to see this report. I think median price is a better indicator than average as the extremely expensive apts. tend to skew the average.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1168397199eIXkM&Record=7

Also, the 20% number means nothing without knowing how many sales there were. Say last year there were 20,000 sales at an average of 1,000,000 and this year there was 1 sale for 1,200,000. The AVERAGE price would still be up 20%, but there would only be that one sale.

BROKERS should be either eliminated as a trade or work on a par with any gratuity-only workers, and the tips should be voluntary based on the service provided. A "star broker" should me an oximoron.
Middlemen are bad for everybody, and the arrogant and wealthy (off your dollar) middlemen are the worst.
That will bring normalcy to the buying/selling process and logic to the prices.

Hot off the press today!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

News of a bursting bubble and increasing foreclosure rates is daily fare in reports of the American real estate market - unless it's New York City's market that's being discussed. Then the picture seems oddly stable; some would even say sunny for the foreseeable future.

The average sale price for a home in the city climbed to $782,000 in the third quarter of 2007, an increase of 20 percent from the same period in 2006, according to figures released yesterday by the Real Estate Board of New York.

"New York City is still considered a cool place to be, and everybody wants a part of it," said Richard Grossman, executive director of downtown sales for Halstead Property. "I have friends from all over country trying to move here."

"Unless banks stops lending we [the local real estate market] is not going to fall," he said.

Grossman pointed out a number of factors contributing to the city's seeming immunity from the national real estate crisis.

Foremost, he said, is that the city does not have a high proportion of the subprime loans blamed for many recent foreclosures. Co-op apartment buildings tend not to accept them, and in general New Yorkers make more money than the typical subprime borrower.

A weak dollar is also keeping the local market strong by attracting foreign investors in city real estate, Grossman said. Then, there is the age-old factor of supply and demand.

"Even with all the construction going on, you just can't build housing fast enough in this city," he said.

Yesterday's report found prices were highest in Manhattan, where the average home sold for $1.33 million, or around $1,176 per square foot. The average cost of a home went up in every borough except Staten Island, which saw a 2.8 percent drop.

The board's findings is based on data collected by the city and includes all condominimums, co-ops and one- to three-family homes sold in July, August and September. Despite the glowing data, some cautioned against being too optimistic about the market's apparent strength.

Waitaminute spunky, isn't that the same article the the OP linked to? or am I seeing double-vision?

I agree with anon3 (or myself lol) about the use of average price and no indication of volume. All other real estate price metrics use median values as it is a much better indicator.

This newspaper article btw is sitting in the guest/waiting area of our office and is actually a huge front page headline with a big red arrow pointing upwards.

How can it be so different from the Miller Samuel Report posted by anon3?

Actually yes it is. Just wanted to open it for easy and enjoyable reading. I have to concur with the author of this article. Well written news article. The author is certainly a lot more credible than anon3 and yourself. Well enjoy the day I know I will

Oh by the way I'm going to have a brewskie tonight

...still listening to the crickets and waiting for your simple, straightforward answers, anon3....

Hmmm.... as I said, I am surprised that they would even publish average home prices as it is generally understood by the industry as an inaccurate measure compared to the median:

from the National Association of Home Builders:

http://www.nahb.org/generic.aspx?genericContentID=79606

"Median new house prices are used as a measure of affordability as opposed to average new house price or average existing house price for two reasons. First, when building fees are raised new units are what are most directly affected. Second, the median is not skewed upwards by the construction of a few multimillion dollar mansions, while the average is. As such the media new house price better captures the typical cost of a new house to a household."

I mean, come on, even freakin Wikipedia clearly states this:

http://en.wikipedia.org/wiki/Real_estate_pricing

"The median home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the average since it is not as heavily influenced by the top 2% of homes sold. For example, the average home sale price in the US was $264,000 in October 2005, compared with a median home price of $213,900 for the same time period."

Even the NAR, one of the most unscrupulous of all organizations (hi Baghdad Bob, errr, David Lereah.. oh wait, he got fired, er resigned) uses Median and not Average.

Very very odd- this is one of the first mainstream media articles that I come across that only talks about average and not median, and doesn't give any info about volume.

Unreliable and misleading data trying to fool the public.

No mention of the word median in the article but if you would like to manipulate word in that article to prove your point you're certainly welcomed. Bottom line prices are up from last year. Now pass me that Brewskie

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1192982886YWosf&Record=9

According to this miller samuel chart median sales price is up 2.3% in Q3 of 2007 vs. Q3 of 2006.

Oh, and I thought Miller Samuel was a RE stooge in the pocket of the brokers?

The chart I posted is CPI adjusted, so it is essentially your real gain/loss after adjusting for inflation.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1168397199eIXkM&Record=7

That's chart makes as much sense and comparing the price of peanut to a fishing rod. Anon3 you are a silly man

markznyc, aha! that's what I was looking for... thanks. That's a much more reliable statistic than averages.

I'm still wondering what happened to the Q3 mortgage crisis.

It's on its way- it will manifest itself in a different way for Manhattan in form of Wall St. job losses and shrinking bonus pools.

The rest of the country (borrowers) was the sheep that is already getting slaughtered.

Manhattan is the source of the financial ponzi scheme (suppliers of credit) that will also get slaughtered.

Two different animals. Same ending story.

Ha ha...REBNY data. In other news, fox tells reporters at press conference that area henhouses are "well-guarded."

Actually, the suppliers of credit are foreign central banks and investors.

Manhattan (aka Wall St) was the con man who tricked these foreigners into buying these stupid investment 'products'. And the chicken is starting to come home for a major roosting session.

MMAfia pass me the Brewskie wonderful day today. Little cool to go on my terrace in the West Village but my wife and I are going to nice Italian restaurant while our designers work on our apt. The views are magnificent here maybe one day you'll be our neighbors. Cheers

you mean "her" apartment....:-)

I'm sure a number of you will be happy to see my departure (although Spunky, I will truly miss you) but I have found a number of real estate blogs where I don't even feel compelled to post very often, because I agree generally with what's being said (and they're run by real estate brokers, no less.) I'm sure that nervous habit, or excessive boredom, will cause me to check in once in awhile (particularly about specific buildings I might be interested in), but generally I find you guys to be storks with your heads so stuck in the sand its gotta cause some major itching.

New York IS different, just not THAT much. Bye, and good luck.

Take care. Enjoy anon3's blog

Sorry, I can't help myself. What's anon3's blog. I'm looking at urbandigs, truegotham and the Matrix sites. They seem very aware, and very analysis oriented (well, you might be able to see the reason for my departure).

oh, your looking for "very aware, and very analysis oriented" Never mind, you definitely won't get that at anon3's blog. I just thought you were looking for someone to agree with you.

hmmmm, maybe I should start a blog.....but you shouldn't leave - I like urbandigs too actually - for a RE broker he seems somewhat less biased than the general RE blogs (but still a RE industry tilt - don't expect completely unbiased posts)....however, I don't think any of those blogs have the kind of in depth debate or differing opinions and data analysis that we have here. MMafia and I(and probably even Spunky, JuiceMan and Pseudonym - though they'd never admit it) will miss you if you leave!

Not going there. Bye bye.

anon3, my comment wasn't directed to you, it was to JuiceMan's comment. We'll see, I may return next year, maybe not. I'll definitely keep looking. I'm very interested in the comments regarding the buildings, as I am still looking to buy, and sometimes I find it hard to avoid posting. BUT I am going to try not to, especially as it concerns the economy generally. I think that, like politics, you either see one side or you don't. I've vented (rant would be JuiceMan's term, there's an intersting Slate article recently on the value of a rant), and I find much of my ire is now deflated. Thanks people, you've been much cheaper than a therapist.
And NOW, TRULY farewell. We may meet again in the new year.

Aboutready-Please don't take this personally but I think you've said goodbye way too many times. I think saying goodbye 8 time is way over the etiquette quota. You're like the present that keeps on giving or should I say an old undershirt one just can't get rid of.

sorry but think I drank one too may chianti's tonight. Goodnight all.

aboutready, i am in the exact opposite position... i've stopped posting at other blogs because they ARE all aware AND analysis oriented... roubini's blog, econbrowser, and yes, urbandigs (i know Noah and he's a very VERY trustworthy broker). but it got boring because everyone was 'in the know' unlike here... here we have many who are still in denial, now THAT'S HARD TO FIND these days... that results in some veeery entertaining 'discussions'. =D hope the tide doesn't change here too soon!!!!

ahhhh, it makes sense now. All of the FASB 157 stuff you have been babbling about the past few days is 100% regurgitation of Noah's blog. Interesting. Maybe we are in denial MMAfia, but at least we are willing to have an opinion and don't campaign on someone else’s platform.

new accounting rule is discussed thoroughly by most finance related media nowdays, Noah is not an exception...

JuiceMan, you are totally mistaken. Noah was more of a bull in the discussions back then we had whereas I was the bear (clearly, his stance has now shifted somewhat). In any event, the FASB 157 info I got was not from him LOL! it was from a Jim Rogers interview (go ahead, Google him since you probably don't know who he is given the lack of knowledge with regards to the current banking crisis you've displayed thus far) some time ago. Nice try though.

As far as campaigning on "someone else's platform"- say what? and exactly who's platform is this? yours? mine? what?

What's interesting to me is you saying "Maybe we are in denial"... acknowledgement of denial is a good indicator that you are progressing in the 'cycle'... can't wait till you hit the 'anger' phase. *shivers*

oh yeah. The crisis. The one that you so expertly predicted would crash Manhattan real estate in Q3, and then Q4, and now Q1 of 08. Right.

MMAfia no one here is in denial of anything. For example --Are you in denial that you are renting an apt in a 3 family house somewhere on the outskirts of Jersey Ciy or Newark?--No you're not. Or that you want to buy an apt in the City but the prices are higher than you think they should be?--no you're not. Or are you in denial that buying an apt would be very stressful for you because this would be you're first purchase?--No you're not. Or are you in denial that you have never ever purchased any type of Real Estate in your entire life?--no you are not?. Or are you in denial that because you have never purchased any real estate that you feel you have a strong understanding of the Manhattan real estate market --No your not.I think I'm being repetitive here but we know you for sure you are not in denial-Now pass me that Brewskie it's the weekend.

http://www.nysun.com/article/66066

From one to seven! Oh my! Run for the hills!!!!!!

spunky you are the man. Although i disagree with your assessment of the market your commentary is super amusing.

spunky how much are you leveraged ?

and beyond that how much more could you possibly leverage yourself?

The public's belief in the financial markets, and the sound economies of the various states is so strong, that you can now get higher yields on munis than on treasuries (and that's before taking tax into consideration!)

Let me run that by you again (because spunky takes a while to digest):

You can buy a 20 year US treasury at about 4.4%
Or you can buy a 20 year AAA rated muni, on which you pay no tax, at about 4.63%

Look up, it's the sky.

zizizi - so you're willing to receive extra 23bps for supposedly AAA "rated" muni in a credit crunch environment municipalities going bust because of layoffs and housing deterioration all over the country ?

spunky, you missed the most important one: i am in denial that this board will finally smell the stank going on in wall street.

once we get into the 'anger' phase, i'll stop being in denial. for now, people are relatively civil, so i'm still in denial.

btw- no brewskies on the weekend. pinot grigio instead. ;-)

JuiceMan, yes, the crisis. what rock do you live under? or are you denying that there is a crisis the like that hasn't been seen in decades unfolding before our very eyes in wall st?

I don't see any crisis. I'm in good health. Got a beautiful wife. Love my apt. Life is good. Pass me the brewskie.
Hey MMAFia how's all with you. Look if you can't get a hold of you're landlord because your furnace is shut off you can always go down the block to Newark Airport and hang out there with the Misses.

Or should I say pass me the Santa Margherita!!!!

spunky, funny, i was thinking about getting the santa, but settled with the ecco domani last night... shoulda bought the santa though! =D

too funny...

aboutready
about 2 years ago
ignore this person
report abuse
I'm sure a number of you will be happy to see my departure (although Spunky, I will truly miss you) but I have found a number of real estate blogs where I don't even feel compelled to post very often, because I agree generally with what's being said (and they're run by real estate brokers, no less.) I'm sure that nervous habit, or excessive boredom, will cause me to check in once in awhile (particularly about specific buildings I might be interested in), but generally I find you guys to be storks with your heads so stuck in the sand its gotta cause some major itching.

New York IS different, just not THAT much. Bye, and good luck.

http://streeteasy.com/nyc/talk/discussion/21960-farewell

aboutready
about 5 hours ago
ignore this person
report abuse I'd like to think my leaving this board would at least alleviate your troll issues, but sadly. the troll seems to be ever expanding.

I had a look last night, for nostalgia, at the thread that occurred before our first meet up at wine and roses. it was so fun! this isn't any longer.

this board has meant a great deal to me, and I've made numerous friends as a result of it. I'm confident they'll remain friends, and for that I'm extremely grateful. NYC real estate is obviously a topic that fascinates me (believe me, nobody looks at as many comps as I do without being obsessed with the topic).

this has been destructive for awhile, but I was loath (that fighting Irish spirit) to let the trolls win. I no longer care. any victory seems destined to be a pyrrhic one at this point. but the bottom line is that this is just no longer interesting or fun. so what have I been fighting to keep going?

I'm not going off in a huff, and this may seem melodramatic, but like many others I find se more than a bit addictive. this public farewell hopefully will provide me with the incentive to stay off the board. if I don't feel free to heap abuse upon me!

farewell? are you sure? TRULY farewell?

aboutready
about 2 years ago
ignore this person
report abuse anon3, my comment wasn't directed to you, it was to JuiceMan's comment. We'll see, I may return next year, maybe not. I'll definitely keep looking. I'm very interested in the comments regarding the buildings, as I am still looking to buy, and sometimes I find it hard to avoid posting. BUT I am going to try not to, especially as it concerns the economy generally. I think that, like politics, you either see one side or you don't. I've vented (rant would be JuiceMan's term, there's an intersting Slate article recently on the value of a rant), and I find much of my ire is now deflated. Thanks people, you've been much cheaper than a therapist.
And NOW, TRULY farewell. We may meet again in the new year.

anon3, my comment wasn't directed to you, it was to JuiceMan's comment. We'll see, I may return next year, maybe not. I'll definitely keep looking. I'm very interested in the comments regarding the buildings, as I am still looking to buy, and sometimes I find it hard to avoid posting. BUT I am going to try not to, especially as it concerns the economy generally. I think that, like politics, you either see one side or you don't. I've vented (rant would be JuiceMan's term, there's an intersting Slate article recently on the value of a rant), and I find much of my ire is now deflated. Thanks people, you've been much cheaper than a therapist.
And NOW, TRULY farewell. We may meet again in the new year.

Ha! I love reading Juiceman's comments from 3 years ago! Makes me laugh.

Juicy!!!!!!!!!

Change your handle at least. Well name you whitejuicy, like lord of the tap-dance.

i do so love this thread. i know, i know, i'm ONLY right because lehman fell apart. well, that was a couple of years ago now, and despite the massive aid to the housing market coming quickly on the heels of that event our market hasn't gained much if any traction.

but then again i'm trying to sell something, unlike juicy.

Didn't you sell in 2004?

ouch

what?