the market now

Noah was quoted in this morning's WSJ; link on site is messed up but in the event that they actually fix it:
http://online.wsj.com/article/SB10001424052702304316404575580663641014550.html?mod=WSJ_NY_LEFTTopStories

downtownrenter - Josh tried to put one of my new charts in, to show the UPTICK in pace of newly signed deals in OCT, but I guess it didnt make it because the OCT month is not over yet and it would have been estimated with 5 days to go until the month is booked.

Subscribers of my new real time tools will be able to see this TICK UP by the real time listings update table we built and engineered to be sensitive to 1-day, 7-day, and 30-day market changes. By watching this tool daily, you see the market heating up. But heres the rub, we are heating up from fairly depressed levels after a 5 month steady decline in demand. Aug-Sept was the most sluggish. So, since ACRIS sales are 2-4 months lagging, there is not much FUEL to fire many sales for coming months. So I would expect sales volume for Q4 to be DOWN, however, again with my tools I know that in reality, this market is actually seeing a nice move up in action the past 4 weeks.

you can KIND of see the tick up in our PENDING SALES, however, this tool is a 6-month window of the market..so at the tail end, we have April's high activity still to filter out.

http://www.urbandigs.com/chart.php?s1=Pending+Sales&s2=&mindt=10%2F29%2F2009&maxdt=10%2F29%2F2010&t=Market+Trends&interval_mindt=2010%2F09%2F29

Once we get into the dull periods of Aug-Sept, the tail end will be slow data and you should see a move up in this metric. Its the real time listing updates table that really shows the recent move up.

noah's realtime data shows a bounce in contacts signed---10/10 due to print appx 750 for the month, with strongest run being last weekend, this week and later in the month generally--peaked at 1150 in april bottomed, (maybe) at appx 600 in sept

downtownrenter--agree largely with your read tho saw less of a bounce 09/10--saw up 5-10%

some may argue we didnt go down 20-30%--if one considers potential peak price of 2007 for most proiperties, imho we were off 25-30% through 1st quarter 2009, with, like i said a 5-10% bounce throough 09--see it flat since then

if i had to guess the aggregate mkt is off 25% from peaky peak late 07

i am still looking for the right leg down of the W bottom
stock market can go up where employment is weak--RE cant

woops, noah, hadnt seen your posts, which far better explain current situation

hope youre cool i cited your data--it seemd appropriate given the discussion

of course!! Do you like the tools Wbottom? At least its doing what we designed it to do..picking up on real time market shifts, as they occur.

I just wrote a post about this topic on UD:

http://www.urbandigs.com/2010/10/wsjcom_sales_down_-_but_market.html

WSJ's technical difficulties are resolved, so here's the quote:

"The volume of contracts signed in October was running about 25% higher than the sluggish levels in September, according to Noah Rosenblatt, a broker and founder of UrbanDigs.com, a new website that analyzes market trends.

But even if that increase translates into more sales, the volume will still be off the level hit during this year's spring selling season. "There is a lack of urgency among buyers and sellers," Mr. Rosenblatt said."

Noah, it's a great tool! And the fact that a big national paper is picking it up has to be a big coup for you, too.

I also think it totally depends upon which market you're looking at. My market is definitely not down 20-30% from peak, and I'm sitting here watching the few decent properties that come on the market get snapped up near or above ask very, very quickly.

Agree, EVNYC. Probably will be flamed to high hell for saying this (even though I've always been honest on SE that I am an owner) but we've decided to hold onto our place. It may well be that we are in a prime neighborhood (and in a prime building in that neighborhood) but prices are not dropping for apartments in our segment and in fact the few apartments in my building that are going up are being listed at higher prices than the ones listed 5-6 months ago. As a seller, we've dug our heels in the ground - not selling until we can take a profit, even if that takes 2 years or 8.

Techno: I hope you're not letting emotion cloud reason. I'm also an owner. Sometimes it's better to cut your losses.

In my segment, I'm not seeing any interesting properties (exceptional price/location or both). There were a few last fall (vacant THs at 500/sqft, prime UWS; C6s under 1m).

I have looked mostly at new development in Williamsburg. Make of it what you will, but some major projects auch as the Edge , and 80 met (plus 58 met), are simply, apparently completely content to sell at a snail's pace that will, literally, takes years more to sell out. I don't know what to make of this, because at some point one would think that they would cut prices to a level that generates more sales.

On the market in general, my impression is that there was a lot of pent-up demand, which caused buyers to step forward when prices came down (arguably that is like a boomerang effect of the bubble). I don't know if that still persists, but I don't know what would cause any big, new downturn in prices, absent another macro crisis.

are you speaking as riversider or hfs?

Here are some random thoughts I've got on the market.

First, I'm not sure why anyone would want to use a measure other than SE's CMI as a barometer of the market: they've used every repeat condo sale there has been to construct an great index. The topity-top (various points in 2007/2008) to the depths (late 2009) saw an 18.5% drop, and we are now at a 14.4% drop from the peak, so there's been a 5% recovery.

Second, I'm not sure exactly why some people who were considering purchasing in 2009 think they are worse off now. As far as I can tell, even if you caught the so-far bottom-bottom in 2009, we're only 5% away from there. A bit of this would have been lost to negative carry, but the real difference is that interest rates are more than a percent lower. I imagine that if you bought in 2009 and don't refinance, you're going to be well behind the 2010 purchaser. If you do refinance, you lose a few percent to the refinancing. So why all the hand-wringing?

I'm not saying that one should or should not have bought in 2009 or 2010, just that knowing the outcoming, I don't really see (in aggregate) the 2009 purchaser being ahead/behind the 2010 purchaser.

Inonada: it can cost very little to refi - I paid maybe $200 to lower the rate on a jumbo from 5.375 to 4.125 and got a new 7-year term.

I swear some of you wanna be buyers are scared of your own shadow. If the numbers work for you wtf is the problem? For 18 months there has been a healthy market churning away, in spite of an economy that sucks. 100's of people per week see value in owning. Are prices ridiculous? Yes. Are they affordable? Ask the buyers. What happens if I buy and prices go down? Welcome to the real world. If you can't handle the uncertainty, you shouldn't be buying. Just make sure to consult with the condo index b4 you take the plunge on your UWS coop.

Jeepers creepers.

In case you haven't noticed, SE attracts people who like to deliberate over their RE decisions.

2,284 ghoulish open houses this weekend. Me thinks that's elevated given it's a "holiday" weekend.

NO worries spinny, it's not the ppl who saved their bubble income and put 50% down, it's the ppl in the margins that I'm interested in. FWIW maybe 1% of nyc re housing stock in any given year, so the bulk of nycers don't care.... unless you are gonna buy or sell

yes, iknow..... 2009 was not "great" a buy.... it just bought you 6 months time..... it's a given nyc re will blow by 2009 sales very very soon....

W67: I don't care about OHs. Let me know when you see a prewar 10-room PH on CPW for 500/sqft. Thanks.

W67, do you hold open houses? Hoping maybe that people bring their children?

"First, I'm not sure why anyone would want to use a measure other than SE's CMI as a barometer of the market:"

I find this interesting as well. We finally have a tool that tells us the truth and everyone ignores it. I guess that tells you something doesn't it?

no juice, it only tells you about resale condos. which, in established sold-out buildings, are kicking ass over the rest of the market.

Hey, aboutready, are you on vacation this week?

Funny, I could swear that you and others said that the condo market was going to crash the most

juice, read. established vs. not. not doing so well.

Yeah, accuse JuiceMan of not being literate. Funny. Coming from you.

Hey welcome back ar. Se not the same Wo you.

'the weather outside is frightful'. Singing a nice holiday song for you nyc10023. Obtw, do you care about tomorrow's weather? Well if you do, I'm your weatherman and the open house # is my barometric reading on re. To me, on a sail I take notice of dark clouds and crazy drops on barometric readings. It's just the prudent thing to do while my family's safety is in my hands on the tiller. -shrug-

Btw. So it looks like you took geitner's trade. 7yr fixed at 4% or $200/month for all your bubble marbles. -shrug- let the games begin!

cAUTION. UNEMPLOYED MAN WITH HISTORY OF NUDITY AROUND CHILDREN.

Noah says there's an uptick. This may be your opportunity to catch sellers unaware. Oh and print off the sales stats in case your target property hasn't yet adjusted its price in accordance with city avgs. Happy hunting!

nyc10023: did you pay any points, or put down any additional money on the refi?

AR: I am not sure I agree. I looked at Rushmore prices, seems to match. I also looked at Miller Samuel Q3 2003 to present ppsf condo vs. coop. Both biased in the same way, seemed to match. Hell, there's a 70% correlation to Case-Shiller's NY area condo index, Wayne NJ included, and we are looking at closely-matching levels. I just don't think that broad market segments act all that differently.

nada, i'm seeing 2005ish prices throughout the coop market. even some condos. but what i'm noticing among the stronger resales in condo buildings is that a few sellers are getting their 2007ish prices, but inventory is often at levels that would take almost two years to clear. so thus far sellers have been holding out, but very few have sold. certain areas that appeal to foreigners are also doing very well with condo resales.

the rushmore isn't exactly sold out. the setai is, i believe, 40% in contract. every single buyer is foreign. how much more demand is there from that source? they recently changed their marketing team because they want domestic buyers. i think that market is pretty tapped and it's been propping up condo resales. but time will tell.

and certain condo buildings are a nightmare, but have almost no resales.

Welcome back aboutready. You were missed!

inonada, yesterday I was thinking how smart you are to rent a beautiful condo space and enjoy living there since you definitely get a much better space when renting for the short term than what I am seeing that I can buy in my price range. However, I still want to own for quality of life reasons. Although I have the money to buy an apartment, either I am too cheap (maybe) and do not recognize that the sellers have priced the apartments at the market price or else these sellers have drawn a line in the sand and will not move on prices. But you may be smarter than all of us living in a beautiful condo for the same money.

Hi Lobster.

Here's a cautionary tale. Trying to resell a condo in a building that still has loads of inventory.

http://streeteasy.com/nyc/sale/363210-condo-515-east-72nd-street-upper-east-side-new-york

01/31/2008 Previous Sale recorded for $1,541,462.
11/06/2008 Listed by Warburg at $1,685,000.
03/27/2009 Price decreased by 11% to $1,495,000.
08/20/2009 Listing is no longer available.
09/09/2009 Re-listed by Warburg.
09/15/2009 Price decreased by 10% to $1,345,000.
12/08/2009 Price decreased by 5% to $1,283,750.
07/28/2010 Listing is no longer available.
10/09/2010 Re-listed by Warburg.

Hi aboutready

AR...missed ya...Guess what. An intelligent real estate discussion just like old times.

Lobster, to each their own. Life gives you lemons, you make lemonade IMO.

It's real easy for me to make my decision because neither me nor my wife have an owning bias. We just don't really get it: absolutely no pride or sense of status or enjoyment comes from having "our own" place. More about experiences (we like changing styles and neighborhoods). The financials just make the decision a no-brainer. At the types of things we're looking at, you get 50-100% more by renting after accounting for everything. I've got the money to buy, just have better uses for it.

Had a conversation on the subject with my mom recently. At some point, I asked her whether she would rather own a house at a certain price, or rent one that is 70% better. To her, the lesser house is all she really cared to have, and owning is more important to her, so she'd rather spend the money she has to buy the lesser house. That's fine with me. Some people like to spend their money on lesser merchandise with a "higher" brand, who am I to argue?

good to see ar back and posting comps.....

yo ar!
sup!

good posts!

refreshing

nada--i dont have better uses for the money i would use to buy were i so motivated. my money is largely in cash at low rates.

on lifestyle, i take things a step further. my preference is to rent. i dont enjoy attending to a home, whether as a DIYer or employing others to do it. i like living in an reasonably nice place, while paying little attention to it. prefer spending my time reading, traveling, surfing, sporting, working, going out, having sex; just about anything over tinkering with my home. so for me to buy and submit to attending to a home as an owner must, there must be obvious economic advantage; whether that means i get more for my money if i buy, or if the potential for gain is great if i buy. and in nyc, now, clearly neither is the case. throw in transaction costs and illiquidiy as other negatives taht must be offset by economic adavntage, and to rent now seems a no-brainer to me.

and i am a person who understnads the potential economic advantage owning RE can provide. I have owned leveraged, traded up several times in NYC since 1992; and had amazing luck as lifestyle circumstances encouraged thatI get out of my biggest investment in 2007. Actually, might have held that property had i not had intimate knowledge of the pathetic state of the mortgage mkt in early 07, but that's another story.

to each their own, but the yearning to own confuses me, especially where i see no immedaite or future economic advantage

now to that life that renting allows me--i wont be at home depot or painting today

Amen, my brother, amen.

You don't get to avoid the home depot situation entirely, though. Why just yesterday, my wife had to go pick paint colors for the new place we're getting for the LL to have painted. Who the fuck knew there could be so many variants of white? And whose job is it anyways to pick the names?

good to see ar back.

In my search -- of a very particular type of apartment downtown -- none of the prime stuff has gone into contract in the last 6 months, and they have started to reduce prices. The only things that moved were flawed and discounted product. To me this indicates that, at least downtown, a lot of the activity is "bargain" hunting.

Inonada: No points or additional $. Really, $200 out of pocket (I think that was to tip the closer). The bank paid all the fees. The lending restrictions have tightened - it was originally an 80/20 mtge, but it has still appraised at >70/30, so it's been okay. So I see why '10 buyers might be kicking themselves for not buying in '09. The '09 buyers can refi for nothing, and still be ahead 5%.

I stand corrected, nyc10023.

Still a 2-3% negative carry to contend with depending on specifics IMO, so probably only 2-3% realistically. Of all the shoulda-woulda-coulda's of perfectly-timed 2009s vs. nows, this seems the most paltry. Stocks are up 77%, oil is up 150%, gold is up 64%, hell, even long-term govt debt is up 20% (which is IMO what's keeping that 2-3% in NYC RE from being a negative value). Let's call it 3% on a $600K place, or $18K. At 4%-ish, it's a matter of $1160 vs. $1200 in after-tax interest. Seems like fiddling while Rome is burning on the scale of the decision.

Let me put it another way. If I'm buying a stock with a 10-year horizon, I may be doing it with an expectation of 10% +/- 20% annually. If I wait a day goes and it moves up 3%, does that really change my outlook? Yeah, by some small amount: now I only expect 9.7% +/- 20% annually. The logical thing for me to do would be to go ahead and buy it anyways, but maybe now less by some incremental amount (say 5%). The 3% difference is well below the uncertainty of my prediction, so why give it much significance?

But I understand that people kick themselves in the ass all the time based on outcomes of decisions when what they should or should not be kicking themselves in the ass for is the actual decision.

Valid points made by all. I won't argue that what once was 80/20 is now 70/30, but let's not forget only hindsight is 20/20. '09 buyers are up 5%, '09 sideliners if they bought the dow index with their cash at the lows are up 68%, even more absurd numbers if you picked individual names.

Back in '07, if one were to analyze comps and look at shiller numbers, etc. it wouldn't have made a difference if numbers looked good, you would pretty much be in for a period of pain.

That's why one should not waste too much time deliberating the market at any one time, rather, a stiff drink and slapping one's face before making an investment I've found is the best strategy.

inonada beat me to the punch. so much for timing a post, let alone the market ...

Okay, remind me why don't you that I thought about going long various things in March '09 but didn't. RE was not one of them. Almost anything went up (except USD and GBP). AUD up almost 200%, CAD up 30%. Financials went up. Most people, like myself, have trouble picking stocks, and were too nervous to jump into the market after Oct '08. I went in too soon, stepped out again.

Inonada: should I slap myself for getting back into the stock market by buying in on a monthly basis?

Absolutely, nyc10023. In fact, hook yourself up with one of these self-flagellation getups to do it right:

http://saintmonicaopl.files.wordpress.com/2010/03/self-flag-picture.jpg

All told, the 2009 thing is peanuts in my book of shoulda-coulda-woulda's. I've done well for myself 2009 and otherwise, don't get me wrong, but when anybody starts talking to me about one of their shoulda-coulda-woulda's, I've got one that trumps them every time. Point being to relax and enjoy the financial successes you've got, which most of the people I relay this story to really have, their "middle-class" $300K existences notwithstanding. Remind me to tell you at the next meetup.

Freewilly, apologies for stealing your thunder. At the next meetup, I owe you a stiff drink and a slap in the face.

Inonada, for trim use Benjiman Moore's Decorator White. Very sharp and very white.

AR!!!!
welcome back!
totally missed you.

Thanks, JM.

aboutready, isn't 515 east 72nd the Miravel building with the huge extra monthly expense for the spa? I'm curious about your take on the Cielo. Forgetting about the not terribly convenient location, do you think it is good building for buyers at this time?

aboutready, at what price would you think that a two bedroom in the Cielo would be a good buy? One of my friends is interested in the two bedrooms which are around 1600 sf. Right now 3 apartments are listed for sale at prices ranging from $1.85M to $2.225M. Although alot of apartments have been put on the market in this building, there were very few sales in the last few months.

Lobster...are your questions to aboutr a spoof?....or do you think she has changed her view of the nyc market?

No, aboutready follows the upper eastside condo market and I am seriously interested in her view.

AR: Glad to see you back on the boards. Hope you will be posting to those comp threads. They have suffered without your contribution.

Ny10023 -- surely you had to pay closing costs at your refi. Did you roll the charges into the mortgage? A dear friend got the same rate you did on his 7 yr. I am jealous but my very conservative streak is happy to have a 30 yr in the 4's

Nothing rose. It fell 25% and flatlined.

apt23: I negotiated all closing costs -> zero. Nothing was rolled into the mtge. I am considering paying down and getting a non-jumbo 30yr in the 4s.

hot damn. good going 10023. wish i knew that before i closed

nyc10023, you must look very hot or threatened to default on your loan.

I have a heloc that is currently at 2.74%. I wonder how many others have a heloc at similar rate and is using it to stay afloat.

How long can rates stay this low?

Apt23 & Sunday: I was playing 2 lenders off against each other. It helped that I was approached for the refi, not the other way around. All negotiation was done via email. Historically, rates can't stay low forever.

And yes, I don't think it's immoral to threaten default even if you have the means to pay. It's just a negotiating tactic. In that case, I think it's better to keep a large loan balance to keep your skin exposure low. I am an owner, but bearish.

>And yes, I don't think it's immoral to threaten default even if you have the means to pay. It's just a negotiating tactic.

what is your opinion on actually defaulting when you have the means to pay?