Shadow Inventory for Fun and Entertainment

I'll go first:

Tempo at 300 East 23: 28 out of 99 apts EVER listed

The Laureate on Broadway: 75 never listed....yet

+ARte at 540 West 28th: 22 out of 91 EVER listed

The Lucida UES: Looks like 82 out of 110 ever listed/sold/mentioned

So with three minutes thought and just a few clicks I have come up with 243 apts not reflected in any inventory charts. I could go on forever.

Its a problem. Its something I am trying to fix but requires political will and enforcement by REBNY. Therefore, it will be a gargantuan task to overcome. I discussed the problem in detail months ago. I suggest you read this discussion on THE NEW DEV PROBLEM. Its a bit inside baseball, but the solution I propose is there and requires structural changes in the listing system for new developers.

http://www.urbandigs.com/2010/05/the_new_dev_problem_standardiz.html

"All that is required is a listing system that makes it mandatory for a New Project (any kind of new development) to create an initial history record for ALL UNITS included in the first approved offering plan once the first phase of marketing begins. That is, the Schedule A of the offering plan that lists all units in the offering should have a unique record created right off the bat. The sales team for the developer has every right to place how ever many units they want to FUTURE, a status update that is in our listing system, and only release the pre-determined set units to ACTIVE to maintain the exact model they used in prior years. But every unit in the new building now has an initial record, with an initial history that can be measured. The public will see no change at all and will continue to only find released units chosen by the developer and their sales team. "

UD: I am not questioning your credibility. I know this is a problem that would take a political and legal change to fix. There is no way you can account for it in the meantime. But it seems that it might be a significant number (miller, etc), That is why I thought this might be an interesting thread since many people know what is happening in their buildings of interest or in their hood. Rather a informal version of "If you can track market movement......"

34 Leonard. 16 units. SE says 1 sold.

50 Franklin has 22 of its units in contract, including 6 listed as in contract yesterday and some in contract for over 300 days. Supposedly they had 72 units to start and have sold 25. What it all means I don't know. So shadowy.

303 East 51st. 150 units never listed. (Crane disaster building)

apt23. Even if there is shadow inventory. Nothing new is getting built anyway. Since the start of the credit crisis in July 07 no money was available for builders to build. It takes about 2 years since inception to complete construction of a new building. So it's about 3 years since credit crisis began. Which means no new units. There has to be a constant supply of new units coming to market otherwise supply gets squeezed. Maybe Shadow inventory can offset that somewhat or there will be no new supply to meet continued demand.

You mean like the two buildings in BPC (32 and 22 stories) not being built? Or the 70 plus story Gehry rental tower not being built?

oh wasnt saying you were..its very frustrating to me because data completeness is the single most important element to my project. I put so much money and time into this, and to find out half way through that we had to take a totally different path due to incomplete data for new devs, was very disconcerting. Granted, Im glad we did it because now the system is that much more accurate. But still, its a problem that doesnt have to be there.

Someone should compile an xls file using the following columns for all new devs in last 3 years:

Building Address
Total Units
Units Released (either active, pending, or closed)
Units Unreleased (total units - units released)

simple..its a lot of work but hey, it will be very useful. Start now, and work on it little by little and finish in 3 months.

"303 East 51st. 150 units never listed. (Crane disaster building)" Oh, please. A see through, bare concrete shell that stopped many floors below planned height and whose design violates building code (meaning the the building may be pulled down rather than completed - read some of the press reports at the time of the crance collapse) is not 150 units of shadow inventory. Or if it is, it's 2020 shadow inventory, not 2010. Citing this one hurts the credibility of your argument.

No doubt shadow inventory is high, but it is clearly moving. I keep seeing new dev condos where the developers keep working down the backlog. There has been a lot of progress in the Brompton, Lucida, Rushmore, Laurel, etc. generation of buildings in the last 6-9 months. How successful developers will be pushing entirely new buildings (Tempo, Isis, Azure, 303 East 33rd, etc.) into the market in 2010 is another question, but so far I am seeing absorption that surprises me. I mean, where do all these buyers come from, esp. so many multi million $ all-cash buyers?

I suppose this question is somewhat a matter of frame of reference. By any absolute measure, there are a lot of unsold new condos sloshing around the market, but relative to, say, six months ago, the problem is smaller and I think continues to get slightly smaller day by day.

SteveF. Extell has a huge investment in W58/CPS. 230CPS has been cleared out and there are only about 6 tenants still living in the building. The building is being prepped to be demolished. Air rights have been bought. Meanwhile the clock is ticking on a huge loan. So two things will happen. They will start to build a 60 story luxury building very soon -- which will put price pressure on the Plaza, Trump, Time Warner and 15 CPW. Or, they will eventually default on the loan which will put pressure on all their other projects. They have already hit the 30% discount level on many of their trophy buildings, including the Rushmore. Quite frankly, you can only hope that they start building on that prime CPS space. Here is an unregulated private developer with over 10 million sq feet of prime manhattan RE. You don;t want that kind of guy to go down. Big domino effect

And there are new units coming on. I listed two buildings above. Supply only gets squeezed if there are sales. And point here --is there enough shadow inventory to affect sales?

correction 220 not 230 CPS

"They have already hit the 30% discount level on many of their trophy buildings, including the Rushmore." Please present evidence. The 15 closings in 2nd quarter 2010 to date that have associated listings on SE have closed between 26.6% below and 1.8% above list, averaging 10.4% below. And in total there have been 18 closings quarter-to-date, so they're getting the inventory out the door.

"They have already hit the 30% discount level on many of their trophy buildings, including the Rushmore." Another of Extell's trophy buildings is the Lucida. The largest reported discount among the 18 closings that have associated listings is 16%. Eight of the 16 closed above the listing price (mostly by tiny amounts, I think reflecting taxes/closing costs paid by buyer). So again, evidence to support the hyperbole, please...

also 400 Fifth Avenue, listing only a few apartments but they should have hundreds for sale, the W downtown and probably many others

Be@schermerhorn: 246 units, 80 sold, 16 in contract, 24 for sale. 126 units left.

SLS: Re Rushmore 30% discount from Curbed and first noted on SE by Riversider:

http://ny.curbed.com/archives/2010/06/18/rushmore_buyer_gets_biggest_discount_yet_with_30_percent_off.php

And though not exactly trophy: Take the Ariel West. Because it answers your question of why people are buying. In 2008, 4bd 16A sold for $3.3 + In May, 9A closed for $2.3. You can imagine broker screaming "Million $$ discount!!!" Unsuspecting 9A buyer probably didn't know that same apt sold a week earlier for $2.6 and since there are two more A apts trotted out recently , a savvy buyer would probably offer $300 thou less. since that worked for 9A.

SLS: ok point taken on 150 E 51st. But the bank probably won't let that property sit as an empty lot. But let's kick that one down the road. Replace it with One Madison.

And speaking of 303 E 33rd: Out of 128 apts, 46 NEVER listed. Though it is 50% sold which is pretty good. We await to see if sales were a result of deep discounts.

SLS: Extell trophy apt at 535 WEA: 40% discount.

05/25/2010 #11 $12,907,846 -40.0% $21,500,000 ↑ 7 beds 7.5 baths 8,451 ft²

so who is doing the XLS file???

"I suppose this question is somewhat a matter of frame of reference. By any absolute measure, there are a lot of unsold new condos sloshing around the market, but relative to, say, six months ago, the problem is smaller and I think continues to get slightly smaller day by day."

That's really the story here, I think. Great point.

"Someone should compile an xls file using the following columns for all new devs in last 3 years:"

Noah, I have done this for Williamsburg (can dig up the thread if you'd like), and it's time consuming but definitely doable for someone who lives in the area and follows the real estate market. There's so much bad info and off-base estimates out there that I was compelled to do it - I'm sure others can take on the task in their areas if they have the time.

UD: so who is doing the XLS file???

Someone with a vested interest?.............You?

***SELECTIVE DISCLOSURE ALERT***

"SLS: Extell trophy apt at 535 WEA: 40% discount.

05/25/2010 #11 $12,907,846 -40.0% $21,500,000 ↑ 7 beds 7.5 baths 8,451 ft²"

Six closings in 535 WEA to date. Prices range from 1.8% above list to 40% below. Mean -19.2%, median -22.3%. apt23 cites the 40% below and that one alone. My BS-o-meter is reading in the red zone.

Sorry sidelinesitter. apt23 stated they "have already hit the 30% discount level." You asked for proof. He gave you one 40% down and now you accuse him/her of selective disclosure and BS? WTF?

When did 40% down not hit the 30% level?

"SLS: Re Rushmore 30% discount from Curbed and first noted on SE by Riversider" That sale was discussed at some length last week when it first hit the press, including the insider identity of the buyer and potential off-market nature of the transaction as a result. But let's not let that get in the way of a good preconceived notion...

Even if we take that closing at face value, we now have 16 recent closings with associated listing prices, ranging from a 30% discount to a 1.8% premium and averaging 11.6% below list, vs. 10.4% without the questionable sale. Once again, how does that get us anywhere close to blanket conclusions about 30% off fire sale prices? I'd love that to be true as much as the next prospective trade-up buyer, but unfortunately it just ain't so.

mathus, good point. So let me take the opportunity to announce that Extell is closing units ABOVE ASK in at least three of its trophy buildings (535 WEA, Lucida, Rushmore). Based on actual data, there is much more support for this claim than the 30% down one. Based on your flawless display of logic above, I'm sure you will agree that we now have compelling evidence of a rally in new dev condo pricing. Well, I'm glad we got that cleared up.

"Once again, how does that get us anywhere close to blanket conclusions about 30% off fire sale prices? I'd love that to be true as much as the next prospective trade-up buyer, but unfortunately it just ain't so."

sidelinesitter, what's more is that these "discounts" are off initial asking prices, not off any comps. Granted there aren't too many in that immediate area, so it's a difficult product to gauge price-wise, but either way, you can't say that was a true 40%-off-peak.

"you can't say that was a true 40%-off-peak." It's 40% off peak developer aspirations

"Someone with a vested interest?.............You?"

we all have a vested interest dont we? Besides, Im already 75k and thousands of hours invested in a project that didnt launch yet...yay fun!

My next efforts are going towards a better tool...call it phase 2 of launch like 3-4 months out. I need as many offering plans of active buildings as possible!

SLS: Announce whatever you want. And go ahead and show where I said it was indicative of any kind of freefall (or whatever the opposite of a rally might be).

You challenged one fact, you were refuted so you accused the person of saying something else. Now you try to imply I said something I did not. Its all pretty desparate and I just can't figure out why.

malthus, apt23 was, in effect saying something else. As noted, the "discount" was off ask, which is a pretty arbitrary number since it's not necessarily tied to anything concrete (ie: comps). The asks at 535 WEA seem to have been mostly quite aspirational. I think that's all it demonstrates, even if it's a totally legit deal.

pretty funny bjw... just 2 yrs ago, a nimrod bid $8MM over an aspirational $40MM ask, no one said anything about anything... by now it's off" aspirational" FLMAO.... clueless ppl all around... I see dead ppl or at least underwater homeowners EVERYWHERE I GO...

"just 2 yrs ago, a nimrod bid $8MM over an aspirational $40MM ask, no one said anything about anything... by now it's off" aspirational" FLMAO"

w67th, hilarious that you keep dropping your a$$ everywhere you go, but for no apparent reason. Since when have asking prices, especially from developers, actually meant anything? Go back years on this board, I've always said that, so yeah, someone said something about it even in boom times. In the end though, what's your point? That this is indicative of 40% off peak prices all around? It isn't.

So in determining the amount of a discount, we should already discount the asking price to get a more non-arbitrary discount? As w67th points out, I don't recall anybody ever saying "It wasn't really 20% over ask because that ask was pretty low to begin with." You can draw your own conclusions but facts is facts.

"So in determining the amount of a discount, we should already discount the asking price to get a more non-arbitrary discount?"

Who said that? Asking prices are arbitrary - you shouldn't use them at all, for much of anything really. I've said this for years, as I know others have on this board. I can ask $40,000,000 on my apt, but if it sells for $500k, are you going to tell me that's a factual discount? Come on, you guys both know better than this. Those aren't "facts."

BJW, the sale W67th refers to was a co-op. Not new dev. However, Westie's still off-base because a) the building is part of the tippy-top of the luxury market, the crashing of which has had little effect on the bulk of the more plebeian listings/closings, and b) the sales in question represent the frothy heights of the bubble and the post-bubble nadir, c) second sale was a lower floor requiring extensive renovations around the whims of a difficult co-op board. Hardly representative of the wider NYC market, and possibly not even of the luxury market.

Fact 1: ask was $23M
Fact 2: price was $12.9M
Fact 3: 40% discount

Those are facts. You are on the other hand arguing in principle against the conclusion that he draws from this, as is SLS. It may or may not be part of a trend, but it is what it is.

evnyc, I thought we were talking about the 535 WEA sale that apt23 brought up. But yeah, agree with your points.

malthus, I don't mean to be condescending, but all you're showing in terms of "facts" is that (a-b)/c = x percent. The problem is that "a" is a pretty useless number, which makes "x" a poor number to choose to describe an actual discount in terms of market movement. Which is what most prospective buyers are interested in to begin with.

I don't give a sh$t about what most buyers are interested in. Try to follow me. Somebody basically called another person a liar when what that person said was true. Do you get it?

malthus, I don't think you get it. sidelinesitter never called him a "liar." Don't make "sh$t" up.

"My BS-o-meter is reading in the red zone."

Are we done now?

bjw2103

"I suppose this question is somewhat a matter of frame of reference. By any absolute measure, there are a lot of unsold new condos sloshing around the market, but relative to, say, six months ago, the problem is smaller and I think continues to get slightly smaller day by day."

That's really the story here, I think. Great point.

But not according the J Miller - last summer he said shadow was just shy of 7k, and now he says its 6500-7k, so according to him there has been no movement.

"That sale was discussed at some length last week when it first hit the press, including the insider identity of the buyer and potential off-market nature of the transaction as a result."

"Even if we take that closing at face value, we now have 16 recent closings with associated listing prices, ranging from a 30% discount to a 1.8% premium and averaging 11.6% below list, vs. 10.4% without the questionable sale. Once again, how does that get us anywhere close to blanket conclusions about 30% off fire sale prices?"

Yes, we're done now.

printer, it's tough to say when he's giving somewhat vague numbers and ranges. I think the point holds though that it hasn't exploded as some predicted.

Laurel, 400 East 67th. 129 units. Closings started 12/08

Glass half empty version: 57 closed / 11 in contract / 24 listed / 37 shadow inventory (29% of building)

Glass half full version: In January shadow inventory was 62 units (48% of building), so shadow inventory is down 40% in the last five months

Georgica, 305 East 85th. 58 units. Closings started 11/09

34 closed / 7 in contract / 13 listed / 4 shadow inventory (7% of building)

Brompton, 205 East 85th 165 units. Closings started 2/09

A couple of months ago I posted a long update on Brompton sales status here:
http://streeteasy.com/nyc/talk/discussion/8452-brompton-buyers-are-organizing?page=3

At the time, shadow inventory was 14 units. Now it’s down to 8 (5% of building)

Alexander, 250 East 49th. 88 units. Closings started 5/10

10 closed / 10 in contract / 49 listed / 19 shadow inventory (22% of building)

Speak of the devil. Look what I just came across:

http://therealdeal.com/newyork/articles/lenz-helps-broker-13m-uws-deal-for-40-percent-price-cut-at-535-west-end-avenue-an-extell-development-marketed-by-corcoran-sunshine

Actually, I only posted the 40% off because SLS accused me of hyperbole on the 30% off on Rushmore. The 535 WEA is really an outlier because it is a small building with very exclusive apts. But the Rushmore is more telling. For any of you that have not studied or lived in bubble markets, when a developer drops a price it becomes a benchmark. Yes you might find an uninformed Asian buyer or a Greenwich, CT LLC willing to pay ask or --1.8% above ask-- but when a developer drops a price by such a large percentage, that IS the comp. That is was the owner knows it is worth. That is what the vulture funds take note of. That is what future buyers (who are informed) will note. You can bet that future buyers at 535 or Rushmore will try to get an equal discount. It will be interesting to see what all the shadow inventory that sold recently will come in at.

And thank you malthus. My response exactly. Really. Hyperbole? BS meter?. The prices have been all been aspirational for years in NYC -- and elsewhere. Until someone pays those prices. It works that way when prices are going up. Benchmarks. NYC RE is now $2000 psf. NYC RE is now $3000 psf. And it works the same way going down. They are aspirational sales until you are forced to sell at a steep discount. It is what it is. Extell has just gone on record saying that high end luxury is worth $1500 psf.

"but when a developer drops a price by such a large percentage, that IS the comp."

apt23, no it just isn't. I don't know how else to say it: asking prices - especially in new dev - is essentially meaningless. Show me 30% off a recent closed sales price and you've got a good example. But this is not it. And to be clear, I'm not saying let's dismiss these "discounts" as meaningless. Yes, it's nice to see sponsors being brought down to earth with some of their crazy asking prices, and it makes for more attractive headlines, but the actual value was clearly never near the ask. It's a worthless figure.

apt23, I'd contend that some of these sales prices going on now are still too much. 40% "discount" or not. THAT's the ultimate point, and I think you guys are sorely misunderstanding what represents value here.

And SLS: I posted that WEA discount before a story was published by The Real Deal today. Is the Real Deal full of hyperbole, full of BS? Or do you think they wrote a story about it because it is a SIGNIFICANT measure of a turn in the market?

"Extell has just gone on record saying that high end luxury is worth $1500 psf"

gee, apt23, apparently NYU didn't get the memo since they just paid over $1670 psf for just a nice 3 bed condo in the west 90s

Let's go back to the original contention for a minute: "They have already hit the 30% discount level on many of their trophy buildings, including the Rushmore"

First, "many" means more than one. It means more than two. I think that to most people it's more than three and probably quite a bit more than three. Yet all we have here is one unit at a clear 40% discount to ask and another at a 30% discount of debatable relevance (inside counterparty, etc.). So that's either one or two, not "many"

Second, the one to, generously, two examples are of UNITS, not BUILDINGS. You can't have 16 recent sales at the Rushmore between ask + 1.8% and ask minus 26% (arm's-length sale) or 30% (related party sale) with a mean of 10-11% off ask and say that the building is selling at 30% off. Or, rather, you can say it but the statement just won't be accurate. Similarly, 535 WEA is selling at 20-odd % off ask across a range of closings, with a range that includes full ask on the one end to a 40% discount on one unit on the other. The building is not at 40% off ask.

The only thing that I would amend in my earlier posts on the BS-o-meter comment. That was somewhat unkind. It should have been hyperbole meter or FUD-o-meter.
(FUD: http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt)

Shadow inventory is one of the most interesting and consequential topics in the market today and I would love to have a reasoned, information-based discussion about it - level, trend, data quality, impact on market, J Miller talking his book, etc. I just didn't see that this thread was developing in that way, so I pointed out where I thought a couple of arguments were lacking.

also, apt23, I think another reason that I got a bit cranky is that your posts are typically so well informed and intelligent and your views so balanced and logical, and frankly some of your comments on this thread don't seem like you. The Extell-down-30%-in-many-buildings type of claim (which I genuinely don't think is well supported by evidence) would be par for the course in a somewhereelse thread or an ericho thread (although the ho would be saying up 30%, not down), but is a surprise in an apt23 thread. I think you are overstating the case by some margin.

Don't you think an informed buyer would attempt to get a similar discount on the similar sized apt at 535 WEA? Or walk away knowing that they would be at a serious disadvantage to try and sell against their neighbor? Granted, 535 is really an outlier because it is so small.

Rushmore is much more relevant to the market and to issues of shadow inventory. It is really not how much discount since the asks vary wildly. It is the ppsf. Rushmore just had a rash of sales. The cut 30% was the first to post after they announced big # of sales. It begs the question of whether $1000 psf will become more of the norm for smaller apts. The fact that the same developer took such a steep cut at one of their other luxury buildings begs the question about what they see happening in the high end. How can they expect even higher $PSF for the high end apts at the troubled, Rushmore? Yes, it is just the first major cuts, but if you have experience in bubble markets, big cuts are like cockroaches. They indicate more to come. That is why the press picks them up as stories.

And, I also gave the examples of same comp sponsor apts selling at Extell building Ariel West for steep discounts.

"your posts are typically so well informed and intelligent and your views so balanced and logical, and frankly some of your comments on this thread don't seem like you"

Totally agree. See what happens when you post quality stuff apt23? The people are never happy!

"For any of you that have not studied or lived in bubble markets, when a developer drops a price it becomes a benchmark. Yes you might find an uninformed Asian buyer or a Greenwich, CT LLC willing to pay ask or --1.8% above ask-- but when a developer drops a price by such a large percentage, that IS the comp. That is was the owner knows it is worth. That is what the vulture funds take note of. That is what future buyers (who are informed) will note. You can bet that future buyers at 535 or Rushmore will try to get an equal discount."

In your view how long should it take to see this effect flow through to prices? In other words, how long until we can look back at closings and see if it played out this way?

"It is really not how much discount since the asks vary wildly. It is the ppsf."

Now you're making a whole lot more sense. I used to really like ppsf, but I find it only marginally useful now - differences in location (especially), layout, views, amenities, outdoor space, # of baths, etc can cause the ppsf to vary quite significantly, so it's ultimately nothing more than a sniff test. Saying luxury condos are going at $1500 psf tells you nothing about the value of a particular unit if it's selling at say, $1000 psf. You still may be overpaying. Or vice-versa if it's undervalued (rare, but could happen, of course).

And that's why you really need comps to get a clearer idea.

Forget the f'king comps for a minute. Is there anything, credit, jobs, bubble, tax incentives, cure for cancer, ability to teleport..... In the near future that would make the one 'outlier' not the default comp in the next 6 months. Flmao.

Good show apt23. Don't let the lemmings confuse you with their 'data'.

iPhone 4.0. Yep yep beeeetchyes. While you wasted your time on se, I waited 5 hours for a phone !

Itz so thin.

Ok. I admit to overstating by using the word "many" (of Extell buildings). I also admit to a great deal of alarm where Extell is concerned. And I will give the reason again. It is a private developer who is not regulated. A developer who controls a very large amount of Manhattan RE with a very short history in the business. They do have a major partner in the Carlyle Group but Carlyle has also been involved in a few non kosher deals.

So Extell sat across the poker table from a big buyer and folded at the 535 WEA purchase. What did they see? That the market won't even hit the heights of the former sales in the same building? That if it does hit those prices again, it will be so far in the future that it is prudent to take the cash now? That the buyer who can plop down 12 million in cash is becoming a rare entity? What would be more alarming is if they actually needed the money to cover other expenses. Is that why they are stalling in giving back the Rushmore

bjw: in the case of 535 WEA what comp do you need? Do we need to wait for the other comparable sized apt to close before we have a comp?

Do you consider the trustees at NYU to be savvy buyer of NYC property? Or are they the Asian or Greenwich LLC outlier?

In your view how long should it take to see this effect flow through to prices? In other words, how long until we can look back at closings and see if it played out this way?

I don't really know SLS. I would have thought given everything else it would have happened by now. In Miami it was slow to start -- a distressed sale here and then there, then several over there, then an entire foreclosed building, etc. But once one of the big developers went down, it was like a damn breaking. Hedge fund guys came down by the plane load. Called the bottom of the market, set up vulture funds and then the market fell another 40% from there.

It will be interesting to see all the prices of the Rushmore apts that sold in the early spring rush of good stock market and govt incentives. Rushmore bragged about selling more than any other building. If they sold at steep discounts it will be a tell for the market. If prices held up, well then, I think shadow inventory will dry up and we can all sleep soundly at night.

"Don't let the lemmings confuse you with their 'data'"

Totally agree. It's much better to have a view and stick to it. Allowing facts to intrude on your view in the first place or new facts to alter your view once your mind is made up is downright unprincipled compared to sticking to your beliefs.

PMG: What did NYU buy for $1600 psf and why didn't they buy the hospital property in greenwich village?

I thought we were talking about condos, you know apartments? They bought a 3 bed 3.5 bath nice condo in the west 90s. No doubt it is for a professor they are wooing. You cannot tell me that NYU is not a savvy buyer. They may overpay a bit, but not a lot.

Whatever you may think about the central topic arguing that nyu is a savvy buyer is ridiculous. If they bought an apartment that the prof wanted because th want him or her, do you really think they're going to squabble about the price?

No, NYU would probably pay a million dollar sign on bonus, right CC?

Of course not.

On then other hand, part of recruiting people to NYC for nyu and other employers is taking care of housing. Much easier to rationalize paying the so called going rate than nickel and diming with the new hire.

Grow up.

"I don't really know SLS. I would have thought given everything else it would have happened by now" I don't know either. Here is one example, though.

20 or so posts down this thread (http://streeteasy.com/nyc/talk/discussion/16211-the-laurel-open-house), about 5 months ago, you and I discussed exactly this pricing benchmark/what comes next? question. The 19% off ask benchmark candidate was #3B, which now shows up as -17.2% because SE changed all the prices upward to include buyer-paid taxes/cost. My thesis was that this trade was the new benchmark for sales at the Laurel - after all, after seeing that who in their right mind would pay more?. You cautioned me not to underestimate the stupidity of the buyer, followed by other back-and-forth that you can look at if you like.

Sorry to get all lemming-like and data-ey here, but since 3B there have been 13 more closings in the Laurel that have associated listings (and therefore observable discount to ask). Six of those have contract dates before the 3B closing hit ACRIS and seven after. The discounts on the six range from 3.9% to 17.9% with a mean of 9.8%. The discounts on the more interesting seven range from 5.2% to 14.2% with a mean of 9.6%. The contract dates are between Feb and May, so there was time for the two 17% discount closings to sink in for people. Yet apparently they didn't. At all. In 5 months.

Yes, all seven could be stupid. Or uninformed. Or so rich they don't care (although if so wouldn't they set their sights higher than the Laurel?), or some other explanation. Or maybe it's just a bit more complicated than that and we should stop latching on to outlier data points that nicely matches our existing world view and then trying to generalize from there. I'm willing to say that I don't know and don't understand. I find that a lonely position on SE.

5 hours for the new i-phone..............tech junkie

"paying the so called going rate" your words were my point

shadow inventory will clear at a discount to the "going rate" when the handful of developers or their lenders are pressed or motivated for a sale. not until then.

Actually, SLS I think that Laurel data is very telling SLS. I think it says we are going to be range bound for a while and it will take some other catalyst to go down further. It is amazing when you can pay $10 on SE and see that the apt you want to buy just sold for 10% lower on another floor. I find it mystifying. Then you look at all the comp threads on the various sections of NYC and the large % of those are tracking real losses for a lot of people. All I can say is that I am a happy renter.

NYU Law School's purchase: http://streeteasy.com/nyc/sale/497055-condo-222-riverside-drive-upper-west-side-new-york

12/28/1995 Sale recorded for $687,500. (ACRIS)
02/19/2010 Listed by Brown Harris Stevens at $3,350,000.
04/06/2010 Listing entered contract.
06/17/2010 Sale recorded for $3,177,200.

"Actually, SLS I think that Laurel data is very telling" Data? According to w67, that makes you a lemming. Sorry to hear that

"Is there anything, credit, jobs, bubble, tax incentives, cure for cancer, ability to teleport..... In the near future that would make the one 'outlier' not the default comp in the next 6 months. Flmao.
Good show apt23. Don't let the lemmings confuse you with their 'data'."

w67th, not clear you understand what a comp is then. Of course that closing price is a comp going forward (though it's been said here that it was possibly not an arm's length transaction, haven't seen definitive proof of that yet). No one said otherwise. But what's the comp you're going off to determine that this very sale is 40% off peak? The asking price? Flmao. And yao (not Ming) while we're at it. I love the knee-jerk rah-rahing of anything that seems bearish. Now that's lemming behavior.

"in the case of 535 WEA what comp do you need? Do we need to wait for the other comparable sized apt to close before we have a comp?"

apt23, this is not a market I'm very familiar with (I'd guess few here are), but I'm guessing 15 CPW is the closest comp? It's pretty far from ideal given the significant disparity in location, so maybe there's something better (very high end condos on RSD, maybe?) that I don't know of offhand. Doesn't help that these are huge, floor through units - definitely a challenge to find a decent comp. Something within the building would probably be best. And would probably also shed more light on whether this was a totally kosher transaction, as sideline suggested earlier.

Trump Soho -- according to curbed:

11 closed
62 (allegedly) in contract
318 available (of which 1 is an active listing)

http://ny.curbed.com/archives/2010/07/09/trump_soho_scorecard_11_down_380_to_go.php#more

And another rather large discount from list price (key words, once again) at 535 WEA.

http://ny.curbed.com/archives/2010/07/09/latest_535_west_end_avenue_sale_officially_breaks_our_brain.php

The Cammeyer (f.k.a., 50 East 20th and prior to that known as 650 Sixth Avenue). 67 units. Closings started 6/10
http://streeteasy.com/nyc/building/the-cammeyer

1 closed / 0 in contract / 11 listed / 55 shadow inventory (82% of building)

So far the building has had more names (3) than closings (1).

isn't laurel an alexico development? They don't seem to be doing so well these days.

it's so difficult to tell. the sponsor in the cielo just sold three apartments at rock bottom prices, never listed. I would have sworn that building had sold out ages ago.

Says the unemployed woman with a daughter having a hissy fit because she doesn't have enough colors in her dress.

UP yours, ulstercounty.
We know who you are, under any name that you post " comments " under.

Lucida, 151 East 85th, 98 units. Closings started 6/09

68 closed / 0 in contract / 13 listed / 17 shadow inventory (15% of building)

Note that the building's SE page says that there are 110 units, but the condo offering plan only has 98 tax lots, nos 1103-1200. The 98 figure is also discussed on the Lucida discussion threads. In the shadow inventory calculation, I have assumed that 98 is the correct total.

** (15% of building) should be (17% of building) **

I was just reminded of 245 10th ave after reading this fluff piece at therealdeal;

http://therealdeal.com/newyork/articles/245-10th-avenue-may-be-ugly-but-at-least-it-s-intentional-says-james-gardner

Dear James Gardner, (author of the article)
Do you think maybe a line or 2 on the actual status of the project that was near completion and then every listing pulled in one fell swoop a year ago is in order?

75 Wall Street: 346 condos; 125 sold; 10 in contract.

211 of shadow inventory.

Good thing Bayerische Landesbank passed the stringent European stress tests and is able to extend and pretend the construction loan for another 2 years.

http://www.crainsnewyork.com/article/20100726/REAL_ESTATE/100729885

wow, I knew there was a glut downtown, but WOW.

I guess the shadow inventory could be measured if someone were to go to the NY AG's office downtown and review the offering plan of every building that has been built that has units not yet offered for sale. Basically copy the schedule of units out of every single offering plan and then compare the units listed there to the ones for the same building on the broker site.

It would take a lot of time and effort (and some money for the copier) but it can be done entirely using publicly available information.

I think Noah would love for someone to do that so his charts would be even more accurate than they promise. Are you offering to take on the task, postdeflation? You would have the esteem and gratitude of many SE posters and I'm sure you could take that right to the bank.

I also wonder about the planned buildings that got caught in the downturn. What do they do? Keep attempting to get a construction loan? Default on their existing loan? I would love to know how many are out there. The one I find interesting is the Extell property between 58/59 on CPS. That has got to be a big tax load to carry. Yet no attempt to start. Will they default? Build? Amend the plans to a smaller building? It will be fun to watch.

Appreciated, but I prefer just to be a heckler and gadfly. I'm here to procrastinate, not do actual work.

I'm also curious about planned but not completed buildings. Even the Crescent Club in LIC was probably around 85% completed, facade all done, and has been sitting there empty for almost a year. The Star Tower last I walked by was still just a hole in the ground. Who knows how it will all shake out . . .

123 Washington Street (W Hotel and Residences): 222 units; 2 sold; 61 in contract (some since November); 21 active listings.

Shadow inventory of 138 (at least).

Tribeca Space: 74 units; 50 sold; 15 on the market;

9 shadow

so what all you shadow people are telling me is that the developers are forced by their lenders to wait for prices to reach a certain higher level before they are allowed to unload any their remaining apartments? Is that right? If not, can you please tell me why the developers have sat on these apts for all these years and have not listed them yet?

malthus, you obvioulsy have done some research on shadow inventory. Can you see my above question.

I just look up the basics on buildings I know or pass by regularly or ones I see news about on curbed. So I don't know much about the UES and that I think is the point of the thread -- to collect anecdotal info on a nontransparent part of the market.

I don't really know what's going on between lenders and developers and I imagine it is different in each case. We don't know the terms of the loans or the position of the lenders or the relationships involved. We also don't know the preferred returns of any equity investors (if I'm making 8% on a sale and my lead investor gets the whole nut, why bother?). We don't know their tax positions (maybe they are figuring their tax rates go up in 2011 and they are expecting gains from elsewhere and would prefer to incur their losses then).

I'd be interested to hear from somebody in that situation but don't hold your breath. And that would only be one anecdote anyway.