Noah @ UD Says to Take Quarterly Housing Report With a Grain of Salt

Jazzman: about 5 months ago

I'm not a broker but my guess is that much of the product on the market is in investor friendly buildings because these units were bought by investors with the hope that they could flip them.

Investors buy here because they have people to take care of the units and because of the long term trends of people moving to cities. If you buy 10 houses in Phx (which isn't such a bad idea I might add - if you can get the financing of course) then you've got to hire a management co and monitor them etc. Then good luck that that company doesn't rip you off. It's much less of a headache to buy in a condo/ or investor friendly co-op where a board is watching out for your expenses and they take care of all of the headaches.
As more and more people in co-ops start defaulting on their maintenance more and more co-ops are going to be forced to loosen the investor/buyer restrictions.

The_President: about 5 months ago

"Not until prices reach a level where investors come in and can buy the homes will we bottom. Again, there is no bottom in this market until investors are buying the majority of the units."

I don't think that is the case in NYC. While investors here frequently buy entire buildings, it is very rare for them to buy individual units. Individual apts. in Manhattan have never been attratctive to investors. Only recently have foreign investors began to swoop up condos, but I doubt that practice is still continuing since many foreign countries are in worse shape than we are.

The fact is Manhattan is just not attractive to investors. Why buy here and have the constraints of a co-op/ condo board when you can buy a dozen houses in Phoenix and not have to abide by any rules?

The_President: about 5 months ago

"Other markets around the country have learned this. Prices fall and more people walk away from their units than there are buyers to buy these units."'

That is complete garbage:

Treasury: Jingle Mail A Myth

http://www.cnbc.com/id/31570460

The_President: about 5 months ago

""The biggest mistake one can do is to read one of these quarterly reports, and just assume this is exactly what is going on right now!"

No, Alpine, the biggest mistake one can "do" right now is to believe a self-interested realt-whore like you. You are a plague, a parasite who feeds on the corpus of New York's residents. And, like lice and other parasites, you should be exterminated forthwith..."

Did you not even read the whole post on UD? I did not write anything in my original post. It's all copied and pasted. Seriosuly, are you that stupid?

The_President: about 5 months ago

"Barbara Corcoran would make negative statements about the market from time to time."

Barbara can make all the negative comments she wants as she no longer owns the Corcoran group and is not dependent on selling apts. for her income.

tenemental: about 5 months ago

"c) MUST have exact address or its excluded"

I understand why this is necessary, but obviously the brokerages are now taking advantage of it by listing without a unit number and sometimes without even a street number. When Corcoran and others started doing this, the UrbanDigs inventory quickly dropped by around 1000 units. Noah mentioned working on the problem, and it looked to me like about 700 of the units returned a short time later. Still, i wonder how much of a role this has played in the erosion of inventory numbers. My own searches show more new listings than removed or in-contract listings, recorded sales are way low and I'm looking below $700k, which is supposed to be a more active (relatively speaking, of course) market segment.

Noah, any thoughts on the continued impact of these incomplete listing addresses gaming the numbers?

urbandigs: about 5 months ago

wow. so by telling 30 clients in mid 2008 to put their purchase on hold because of uncertainty in near term, i can see the self serving nature that you discuss.

flatironj: about 5 months ago

bfgross, Pamie's pred. Barbara Corcoran would make negative statements about the market from time to time. My surmise is she did this when volume was low, buyers and sellers were at standoff and she wanted to egg sellers on to lower their prices-so volume would increase and SHE would make more money. I remember this well because she did this at the same time that Corcoran was representing my company selling a development in the late '90's (and I was pissed). Pam's doing the same thing-would be my guess.

Dwayne_Pipe: about 5 months ago

"The biggest mistake one can do is to read one of these quarterly reports, and just assume this is exactly what is going on right now!"

Jazzman: about 5 months ago

I think it's important to realize that more transactions doesn't mean there is a market recovery. Look at the worst markets in the country; prices fall, transactions dry up, prices fall further, and as prices fall further transactions go back up. At every price point you will find buyers who say "prices may fall more, but I'm happy paying X - 10% and even if prices fall to X-15% I'll still be happy. Then at X-15% a new group of buyers says "I love these prices, sure prices may fall to X-20% but I'll still be happy if they do."

In NYC we will now begin to see people walking away from their purchases in larger numbers. If you bought a $1,000,000 apartment with 10% down and your place is now worth $700,000, then you have a big incentive to walk. If you're in financial difficulty (and now that your place in underwater) you have little/less incentive to go to great lengths to ensure your mortgage is paid. If you're $200K underwater and lose your job, are you going to ask your parents to pay your mortgage until you can find a job? Whereas if you had $300,000 of equity and lost your job you would go to your parents, friends, credit cards, whoever or whatever to make sure your mortgage got paid. Credit scores are important, but for most people they aren't worth 200,000. So now that prices are off so much, this entire process begins to accelerate and more and more people will walk.

Other markets around the country have learned this. Prices fall and more people walk away from their units than there are buyers to buy these units. Not until prices reach a level where investors come in and can buy the homes will we bottom. Again, there is no bottom in this market until investors are buying the majority of the units.

But brokers, this is good news for you. The further prices fall the more transactions you'll see. Granted they'll be at lower prices, but at least things will be trading.

urbandigs: about 5 months ago

actually that is not the reason. My widget has some rules added to it:

a) only island of manhattan
b) coops, condos, townhouses
c) MUST have exact address or its excluded
d) Duplicates removed from re-listings

Simple rules, but narrows active inventory down and fine tunes it in my opinion mainly to exclude open listings and duplicates that otherwise get double counted. Shadow inventory will always be an issue, so use the data to monitor trends. There is no perfect solution right now.

HT1: about 5 months ago

969 Fifth Avenue 7th floor. Quite a tangled history here, spanning three listings on Streeteasy. 35% drop from the prior same-unit sale, and now an attempt to generate buzz with a $950K price cut.
11/01/2005 Listed in StreetEasy by Prudential Elliman at $4,950,000.
08/11/2006 Listing is no longer available.
02/13/2007 Re-listed by Prudential Elliman.
04/14/2007 Listing entered contract.
07/12/2007 Sale recorded for $4,550,000.
05/03/2008 Listed in StreetEasy by Prudential Elliman at $6,200,000.
05/20/2008 Price decreased by 4% to $5,950,000.
07/10/2008 Price decreased by 22% to $4,650,000.
08/07/2008 Delisted temporarily.
09/09/2008 Re-listed by Prudential Elliman.
09/26/2008 Delisted temporarily by Prudential Elliman. Last priced at $4,650,000.
02/03/2009 Listed in StreetEasy by Prudential Elliman at $3,900,000.
03/19/2009 Price increased by 2% to $3,975,000.
06/01/2009 Price decreased by 2% to $3,900,000.
06/18/2009 Price decreased by 24% to $2,950,000.

30yrs_RE_20_in_REO: about 5 months ago

"Why is the inventory number different between Urban Dig and SE?"

Because no one has the real number due to a huge amount of shadow inventory. Miller came on here and said there was and amount of shadow inventory greater than the sum of Sponsor units and resales put together, and I don't think he has been seen here since to answer questions about it. But just him saying that shows that NO ONE has a clue (within reasonable tolerance limits) of what the real inventory is. So we can just take everyone's numbers and wipe our collective asses with them (NB this does not mean that I think either Noah or SE is "cooking" anything up. I think they are making their best efforts to determine what the real number is, but we've seen the man behind the curtain now and know that even theri best guesses don't seem to mean much anymore).

WeepingTissues: about 5 months ago

The statistics don't help people decide to make a decision to buy or sell unless they have a "day trader" mentality. The statistics are too broad to be relevant to specific purchasing and sale decisions. But people who are in the media need to say something every day just to be noticed. That is what a blog is, a way to get notice for the author.

RE_PRO: about 5 months ago

Why is the inventory number different between Urban Dig and SE? I see SE has close to 14k and UD has 10k for manhattan.

nyc10022: about 5 months ago

You know, I didn't think of this until just now, but this is SUCH a woody allen moment.

Alpine is on line (ha, get it) talking about Vonegut, I mean UD, and trying to school folks that he knows better about UD, and then UD comes on and says "uh, dude, I'm UD, and you don't know what you're talking about".

bfgross: about 5 months ago

Noah you've been really spot-on, including predicting what would happen today, the day that the Q2 report came in. Some people would freak out, and others would tell you that it wasn't relevant based on what's happening RIGHT NOW. Pretty much precisely as you outlined weeks ago. Me, Im going to officially change my tune here and say that we wont hit the actual bottom in Manhattan until sometime in 2011. Everything that has happened so far is in line with my earlier thinking, but it is taking longer than I'd imagined. We have seen the ugly plunge, and are now seeing the (minor) kneejerk response the other way. But it is far from over in my opinion. I think its kinda telling that Pamela Liebman, the shameless shill for the industry, would say something like "time is not necessarily in the sellers interests" and that they are advising clients who are thinking of selling not to wait.
Im not sure Ive heard that from a head of a NYC real estate brokerage firm, ever.

nyc10022: about 5 months ago

And, yes Noah, you are absolutely ahead of the game, and this should be no surprise to anyone who read your stuff a few months back.

nyc10022: about 5 months ago

"the problem is people take a statement like, "activity has increased over the past 3 months and the market seems to be pricing OUT Armageddon" to instantly mean we have a new sustainable bull market in the works. Why? Why do people do this?"

ROTFL.

excellent point. Its the same stupidity that turns articles that say "we're falling slower" into "prices are rising".

Its the stupidity inherent in denial and frustration.

urbandigs: about 5 months ago

the problem is people take a statement like, "activity has increased over the past 3 months and the market seems to be pricing OUT Armageddon" to instantly mean we have a new sustainable bull market in the works. Why? Why do people do this?

The post was meant to reflect on the lagging nature of this Q2 report, that it does NOT reflect what has happened in past 6-8 weeks, and honestly, that it was not a surprise at all. I wrote 10 other pieces how I call the sustainability of this countertrent pickup in activity into question, and 10 more pieces on my thoughts that a V recovery is not happening, a double dip is way more likely, unintended consequences of policy actions, and that a 2nd wave of the credit crisis must be looked out for, etc..

But to ignore the action in the past few months, the pricing out of fear in transactions compared to FEb and early March, and the subsequent effect on inventory is to be biased and narrowminded. Acknowledging reality out there, both positive or negative, on a month to month basis (or real time reporting for you guys) doesnt necessarily mean your medium to longer term bigger picture story is no longer considered.

WEEPINH TISSUES - The post was a refernce to a Q2 report. Whats your problem? You could have read my stuff 3 1/2 months ago and been up to date on what was released today. Are you saying that is not helpful insight in an industry frought with bullshit?

nyc10022: about 5 months ago

OK, we'll add math to the classes wonderboy still needs to take.

> Still out of your range, anyway.

If you need to lash out to make yourself feel better... pretty clear who is bitter...

wonderboy: about 5 months ago

Falling faster is doing "well"?

The drop isn't too bad compared others. Still out of your range, anyway.

nyc10022: about 5 months ago

btw, alpine, if you suddenly have all thsi respect for noah (despite denying his claims for a year), how is it you read and copy the first paragraph and somehow miss the second?

HIGH END ($5M+) - down aprox 25% - 40% from peak
HIGH/MIDDLE ($2M - $5M) - down aprox 25% - 30% from peak
MID END ($1M - $2M) - down aprox 20% to 30% from peak
LOWER END (Under $1M) - down aprox 15% - 25% from peak

BSexposer: about 5 months ago

"People who make real money don't spend all their day posting statistics. They do deals, they buy, they sell, they see cash flow."

Yes, doing deals by buying high and selling low is a great strategy - thanks for the tip. How dumb of people like me to rely on dumb things like facts and statistics.

nyc10022: about 5 months ago

"Noah is considered to be one of the most knowledgeable and honest people in the NYC market."

And alpine is considered pretty much the exact opposite.

nyc10022: about 5 months ago

> That was a valueless post.

Welcome to the alpine fan club.

WeepingTissues: about 5 months ago

There is a big difference between knowledge and statistics. Anyone can post statistics. Knowledge helps you make money. People who make real money don't spend all their day posting statistics. They do deals, they buy, they sell, they see cash flow.

The_President: about 5 months ago

Noah is considered to be one of the most knowledgeable and honest people in the NYC market. Don't dismiss what eh wrote simply because it does not go along with your gloom and doom agenda.

WeepingTissues: about 5 months ago

That was a valueless post.

nyc10022: about 5 months ago

> The NY market is doing well compared to others.

Falling faster is doing "well"?

Where do we get these geniuses from?

nyc10022: about 5 months ago

"DON'T READ THE REPORTS! DON'T READ THE REPORTS! MANHATTAN IS NOT DOWN! I SWEAR!"
-some guy on internet

Well, at least alpine is admitting his aversion to data.

WeepingTissues: about 5 months ago

I've looked at the referenced site. Nothing more than statistics spouted. How is that helpful?

bjw2103: about 5 months ago

The_President, except this is the most reliable data we've got on actual sales prices (ie: where deals are getting done). Yes, the point's been made over and over that the data lag a bit, but until there's anything better, and you understand the caveats, there's nothing wrong with reading these reports.

wonderboy: about 5 months ago

The NY market is doing well compared to others.

w67thstreet: about 5 months ago

forgot to add... just drink a gallon of dead sea water with that stmt... LMAO.... data data everywhere but not a drop to drink...

w67thstreet: about 5 months ago

El_P, the market is dead... long live the KING OF CASH FLOW

The_President: about 5 months ago

The biggest mistake one can do is to read one of these quarterly reports, and just assume this is exactly what is going on right now! The thing is, the market today is significantly more active than what this report suggests because Armageddon has been priced OUT of this marketplace over the past 7-9 weeks or so - something not reflected in this report. When you hear, 'sales volume plunges 50% from year earlier', you may immediately assume today's market is completely dead - not so.