Poll: Whats going to happen to RE market in NY?

huntersburg: about 9 months ago

http://www.nytimes.com/2012/08/05/realestate/big-deal-in-london-real-estate-taxes-rise-but-will-buyers-flee-to-us.html?_r=1&pagewanted=2&ref=realestate

the5ws: about 11 months ago

I have been looking and most properties i have seen and liked are on the market for many weeks contrary to what the brokers make you feel.
I think it will remain somewhat high, a lot of sellers are trying to cash in. Prices will drop somewhat over time through the election.

Europe has big issues
Some of our financial institutions have big issues
Real Estate in NYC will be the safe haven for wealthy Europeans and Asians.
Unemployment and the federal budget remain issues.

Riversider: about 11 months ago

In my opinion you want to be overweight cash. Where I would underweight most is stocks.

Brooks2: about 11 months ago

And cash?

Riversider: about 11 months ago

I think real estate will do better than stocks or bonds on a relative basis.

Brooks2: about 11 months ago

Funny. There is wealthy destruction happening around the world including the us and you still think RE is going up. Lol too funny

Riversider: about 11 months ago

Interesting thing is how difficult prediction is, especially when it's about the future. Some people sold, only to buy back in, others saw collapse, but failed to see take into account the government's ability to kick the can down the road at the expense of future growth, and I don't see that anybody predicted the seemingly tight supply we are seeing now or that people would continue to buy in a market that is seemingly expensive on a buy to rent ratio or that Rich foreigners would wish to take money out of Russia, China or Europe to buy that Manhattan condo.

falcogold1: about 11 months ago

Well I'm glad that's over.
Back to gett'in rich buying residential real estate!

lowery: about 3 years ago

Well, I've heard hairdressers' business is off. Why not grants to pay for people to have their hair cut and dyed and trimmed, and their toenails trimmed, on a more regular basis? The Take A Haircut On Us Program By Uncle Same?

aboutready: about 3 years ago

b&w televisions.

the husband and i had a nice brunch (daughter is at one of those 10-room duplexes. i really like the parents). he can be very amusing. he said his industry is down 15-20% generally, he thinks the administration should start loans for lawyers. upgrade your attorney and a portion of the fee will be paid.

or the 401k initiative? how about bills for beth israel. pick the hospital you wish, and the administration will start paying them now, just to ensure that they are alive when you need to remain alive.

lowery: about 3 years ago

"cash for clunkers" sets a new low - don't know how much lower we can go than this

aboutready: about 3 years ago

i believe in stimulus, and i just can't stomach this. i want to retch, almost literally. stimulus just to keep a broken system from being fixed is horrifying to me. clunkers, refrigerators, jr.'s 401k, off sheet this, off sheet that, MBS, CMBS. it's all just a load of BS.

i got a call from the DNC the other day, asking for money so that they could promote the health care plan. i'm afraid i shared some of my views with her. and nationalized health care is one of my main causes. if you can't get me to donate money for it, you're in trouble.

http://www.econbrowser.com/archives/2009/08/9_trillion_what.html

lowery: about 3 years ago

aboutready, the debt thing is no joke - does anyone remember Warren Buffett's parable of two neighboring islands, one of them peopled by a tribe called the Sprendthrifts and the other one occupied by ..... whatever? I have this creepy feeling that now we've reached a point of no return, that we're creating more debt to cure the problem of too much debt, etc., etc.

aboutready: about 3 years ago

lowery so true. some of the old threads are painful, but some of the new ones are also. i'm starting to come around to UD's conclusion that they will be successful at keeping everything from collapsing a bit longer. the attempts are kind of awesome, really, considering they have nothing with which to finance them. wait, they do. debt and our future.

bubblicious, bubblicious.

http://finance.yahoo.com/news/Retirement-Plans-Torpedoed-tsmf-4056595038.html?x=0&sec=topStories&pos=2&asset=&ccode=

UWSmynabe: about 3 years ago

If you stick to the same argument at some point even opposing views will each have their turn to be right.

lowery: about 3 years ago

This thread is painful to read after having forgotten it.

I do remember on another thread saying that, well, this isn't a crash yet, because I don't see stalled construction projects who've run out of financing and haven't sold enough unbuilt units, and I'm not seeing new condos converted to rentals.

Of course, that is exactly what is going on now. So it's 17 months later..... rents are declining, purchase prices have come down, but ads don't reflect the reality because landlords and sellers are still asking for more than they're getting. Unemployment is as high as it was in the last RE crash, but - stop the presses - 'THE RECESSION IS OVER!' My prediction is that whatever prediction I will make will come true at the wrong time for it to be of any value, and that one way or another everyone will live happily ever after, and that Steve H. will look at 2-brms in Chelsea for $700,000 but they won't be what he wants. Rents are not going up within the next 10 months, but who knows? Maybe fall 2010 will bring another influx.

Topper: about 3 years ago

Well, princess, you first have to anualize your rent by multiplying it by 12.

Then take your apartment market price and divide by the annual rent.

In your example the price-to-rent ratio would be very high.

princess10021: about 3 years ago

Could someone please explain the "price-to-rent ratios?" For example, if the apartment I'm renting costs $4900. per month, and the equivalent apartment to purchase would be somewhere between $1.5 and $1.75 million in the current market, how do I figure the ratio? Just wondering, though it seems right now that renting is a much better deal.

Topper: about 3 years ago

It's interesting to look back at the quarterly Miller Samuel Manhattan real estate prices from 1Q, 1989 to about 1Q, 1997. The decline generally continued for some time and then bounced around quite a lot on a quarterly basis until a tipping point around 1997.

I think we will see another 20% decline by the end of 2010 after which Manhattan real estate largely flatlines for a good number of years.

Huge shadow inventory hangs over the market while NYC unemployment flirts with 10%. Price-to-rent ratios need to get much closer to 12X (for a "gross" capitalization rate of ~8%). Commerical apartment buildings have already corrected dramatically but owner-occupied residential still has a good ways further to correct.

JKB: about 3 years ago

Didn't read the thread, but my opinion is one more step down. If prices are 15-20% off-peak now, they'll drop another 10-15% at least.

Sellers are riding high on the surge in spring activity, but fall will cool their jets when they realize that all the eager-beaver buyers already bought. There's just no pool of money big and broad enough to re-light the fire under NYC real estate. Bottom is at least another 1-2 years away.

nyc10022: about 3 years ago

oh my god, I didn't realize that SteveF has been painfully wrong for seventeen months now!

Oh my lord, he's been claiming the same story for a year and a half!

stevejhx: about 5 years ago

Sorry, this thread must die, just like the real-estate market in Manhattan. See the thread on the Bloomberg article: the worst is yet to come.

aboutready: about 5 years ago

As someone pointed out a few months ago, even if someone has enough money to move on up, they may have to sell the studio or one bedroom to the newish financial type to progress to the next unit. There may not be many newish ones with the wherewithal or inclination to buy those units.

We also have a lot of baby boomers retiring soon. Many of them bought at very low prices, and many will want/need to sell at retirement. They will obviously want to get the most for their apartments, but given the prices in retirement areas, even the Bay Area and Seattle (no state income taxes, ala Florida), they may feel comfortable undercutting the market to get the sale.

Plus, as I have said before, this city has seriously overbuilt the family-sized apartment. Retiring baby boomers will soon be releasing their nearly-empty 2-3 bedrooms, and the building is just crazy. Still (trying to catch that 421-a abatement). We don't have enough schools, not in the neighborhoods with the highest prices. Bloomberg did negotiate for a few, but not nearly enough, and now there's NO money to build more.

dco: about 5 years ago

Not that wallstreet individuals are hoarding money, the banks themselves are not lending it in order to boast the cash reserves.Individual wallstreeters alsway love above their means just like most people. The uncertainty of the market is awake up call to all those who still have jobs.

tenemental: about 5 years ago

Will said: "I think these Wall Streeters have a lot of money, but there's a crisis of confidence that may keep them on the sidelines until the clouds clear, which I think will be early to mid-2009."

My point on the subject of Wall Streeters boosting NYC real estate is very simple. Even if the clouds do clear in early to mid-2009 (which sounds like a very-best-case scenario) it won't be reflected in their bonuses until 2010.

Unless, Will, your theory is that most Wall Streeters are hoarding a lot of money and will be willing to spend it on RE in 09 despite two consecutive years of weak bonuses. I realize this thread is open to opinions, gut instincts, etc., so I will just respectfully offer that on that last theory I strongly disagree.

dco: about 5 years ago

lowery-Amen- My arguement is exactly the same. Greater risk to the downside than up........

lowery: about 5 years ago

Kids, there are lots of GREAT new rental bldgs in prime areas these days. Rent the place you LOVE, and take the difference between the (sinking) rent and the whopping mortgage interest, real estate taxes, common charges and closing costs, and save it. If the ride to the bottom is long and painful, cash is king. If there's a short, light blip, cash is still king. It's a safer bet than jumping into this condo/coop market at the crest of a wave you can't see the other side of. And if you decide to move to a different home, it's much easier than selling property in a market that is going to be either choppy, soft, "uncertain" or just plain bad.

dco: about 5 years ago

It always starts slow and snow balls from there. This is just alittle tase of what's to come. Hold on it going to get rough.

mbz: about 5 years ago

This article on the weaking NYC real estate market made Bloomberg top stories today.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ahgWx1z6LFxE&refer=home

dco: about 5 years ago

Guy/Gals it's not just the wallstreet bonuses that are going to drive the market down. Credit as we know it has change for this generation. The market was fueled in the past years by people who should of never been able to get loans. And yes I even mean people in NYC. Have we forgotten how many people were allowed to lie about their incomes and put 5% down and get interest only loans. I think that people are ignoring the fundamentals. You are talking about a market that has been artificially inflated throughout the world by people who should of never been given billions of dollars in the first place. Going forward the demand will be significantly less. Its the lack of credit that will drive the NYC real estate market down. The average price of a condo in Manhattan is $1.3M. That means your 20% down is $260,000. You need to quafify for a loan just over $1M. Its these loan that doen't exists any more without an income that supports that monthly payment.At 6% that $6,000 month and if add the CC could be as much as $7500-8000 a month. Thats just to have a roof over your head. Now factor all your other bills and you see why the banks have just about closed the books. At $8,000 a month you are looking at $98,000 a year and you haven't even eaten yet. You have to undestand the psychie of the bank CEO's. They have just about all been replaced by new guys and the last thing they are going to do is loan money. This is what's going to drive the real estate market down. Don't ignore the signs and think that this is just going to blow over. Remember waiting means nothing. Buying now could mean the lose of hundreds of thousands in the next few months. Just my analysis. Sorry if it not what you want to hear but it's the truth.

will: about 5 years ago

Sorry for the duplicate posts.. not sure why that happened.

Steve, thanks for the Bloomberg article. I agree with the general trend, but it is interesting that the report notes that prices are still going up.

stevejhx: about 5 years ago

This says it all:

http://www.bloomberg.com/apps/news?pid=20601109&sid=ahgWx1z6LFxE&refer=home

New York City Real Estate Market Slows as Wall Street Cuts Jobs

By Sharon L. Lynch

March 31 (Bloomberg) -- New York City's residential real estate market is showing the first signs of fallout as U.S. banks and securities firms cut the most jobs in seven years.

Manhattan apartment sales fell in January and February from a year earlier and new properties came to the market at the fastest pace since at least 2000, according to data from New York-based real estate appraiser Miller Samuel Inc. Transactions slid 6.4 percent to 3,250, while the number of condominiums, co- operatives and townhouses for sale at the end of last month climbed to 6,225, 15 percent more than at the start of the year.

stevejhx: about 5 years ago

M&A Bankers Suffer 35% Drop in Fees as Deals Dry Up From Record

By Ambereen Choudhury

March 31 (Bloomberg) -- Mergers and acquisitions bankers suffered a 35 percent drop in fees during the first quarter, just weeks after cashing bonuses from a record year.

will: about 5 years ago

Thanks Khd. I always brace myself when I post here.

Tenemental, as I stated, these are my projections, predictions, gut feelings, opinions. You can find data to go every which way and I am appreciative of that. Also, I share the view of Urbandigs and others that the national macro-economy and what's happening on Wall Street can't help but have a negative impact on the Manhattan real estate market. I think where we may part company is in terms of how deep and how long.

I think these Wall Streeters have a lot of money, but there's a crisis of confidence that may keep them on the sidelines until the clouds clear, which I think will be early to mid-2009. And as many here have mentioned, there are other industries in NYC that produce money and demand for real estate in addition to the IBs. Then there are the oft-cited "Manhattan is different" reasons. (foreign investment, center of the world, limited to 22 sq. miles, etc.)

But I'll tell you what really makes me think things won't go down much: September 11, 2001. I had just moved to NYC and frankly, I expected the RE market to crash. Two planes crashing into the center of the world's financial system were a pretty big shock. I recall companies abandoning Manhattan in droves, moving out to NJ, Connecticut and even Kansas (not to mention India and China).

Yeah, I wouldn't have touched a property with a ten foot pole. I was skittish about buying for years. But the market recovered, was resilient and accelerated in appreciation.

So I mention all this to (1) make the general point about how resilient this market is, and (2) to make the point that Sept. 11 may have been a major reason the market did not appreciate even more -- potential buyers like me stayed on the sidelines for longer, maybe not smart but I think understandable. I have seen data that shows that Manhattan costs are far less than other international cities. And I think the mortifying attacks of Sept. 11 had a lot to do with that. I think we moved past that around 2004-05, but now we have a new crisis of confidence, and my projection is that it will lift in early to mid-2009, with some, but not a lot of median price depreciation.

Finally, I think it is still a good market for a longer term purchase since prices are soft and there's a lot of negotiating room. You might see a few points of depreciation in the next year, but you may not have to wait to long for brighter days.

Our best days are ahead of us.

Oh wow, now even poorishlady is going to attack me for quoting "him" again. :-)

will: about 5 years ago

Thanks Khd. I always brace myself when I post here.

Yeah, I wouldn't have touched a property with a ten foot pole. I was skittish about buying for years. But the market recovered, was resilient and accelerated in appreciation.

Our best days are ahead of us.

Oh wow, now even poorishlady is going to attack me for quoting "him" again. :-)

will: about 5 years ago

Thanks Khd. I always brace myself when I post here.

Yeah, I wouldn't have touched a property with a ten foot pole. I was skittish about buying for years. But the market recovered, was resilient and accelerated in appreciation.

Our best days are ahead of us.

Oh wow, now even poorishlady is going to attack me for quoting "him" again. :-)

yournamehere: about 5 years ago

2009 is going to be ABYSMAL. I work in I Banking and can tell you that all of my peers' expectations are that they're working for their salaries this year.

It's that bad. Wall Street has been paralyzed so far this year with no end in sight and M&A backlog is extremely light. Bonuses, if any, will be absolutely atrocious.

Not to mention, let's see what Paulson has up his sleeve and how that may affect compensation going forward.

tenemental: about 5 years ago

Will, what leads you to anticipate increased 2009 spending from Wall Streeters when their bonuses will be based on what the financial markets are experiencing now, which is, well, really bad?

It seems like two years with no bonus bounce will have a direct negative impact on prices (less demand) as well as an indirect negative impact (the loss of one of the biggest claims as to why NYC RE is indestructible - demand from Wall Streeters).

khd, I do my best to keep it sweet - usually.

dco: about 5 years ago

Just my opinion I posted on the LIC site- Just a little lazy at repeating the same rants FYI-
I was fortunate to estimate the beginning of the market problems back in Oct. I looked at a series of indicators that many people on real estate blogs claim could never happen to NYC and applied them to the economy's markets. FYI- the exact date of my moves was Oct. 16, 2007. I'm in no way saying that I made a ton of money. I just didn't lose any and made a little. I see many of the same problem that could result in major declines in the whole NYC real estate market. I'm not predicting the end of the world. What I'm saying is for me to go ahead and buy at these prices would mean that I ignore a ton of research that has saved me money in the past. I do think that forums like this prove one point. That is that their are different opinions and all should be heard. We all might just learn things that we didn't know yesterday. I have a saying "Some student may become teachers, All teachers were once students and Great teachers will always be students.

khd: about 5 years ago

i feel some abuse coming on...hold tight Will!