Economists Say Slump Has Ended in the City

Buy now OR BE PRICED OUT FOREVER!

tell that to the 3 people we are laying off, last day is today for them.
i think one can pretty much find some economist to agree with any opinion one has.

when did it begin...

have to look at the bright side: for every 3 being layed off, 5 are getting rehired.

Poor stevejhx. Sad that none of his doomsday predictions came true. :(

Him and many others JM. Him and many others. Many of the original doomsayers bought, so you won't see them around here anymore. We now have only a small grouping of obstinate leftover doomsayers whose lord is Dr. Doom.

Which ones are they, Juicy? Equilibrium being at 20x rent?

HAHAHAHA!

You forget this part: “the recovery is likely to be a bit bumpy.”

Prices are already below 2006 levels: http://350bleecker.com/policy/sales.html

On 04/08/10 6J sold for $710,000. On 11/16/06 5J sold for $735,000.

EXACTLY as I predicted would happen. Even your "median price per square foot" - not nearly as accurate as the Case-Shiller method of following the same unit over time (or virtually the same unit as in this case) - shows a fall in prices from peak of around 27%.

And it's not over. Not over till it's over, and it will take years (as I've always said).

Sorry.

stevejhx..everything is bit bumpy just like your ass. Nothing is a smooth straight line up. get real dude.

"EXACTLY as I predicted would happen."

You predicted 6J would sell on April 8th for $710k? That's an odd prediction. Where is it documented?

"shows a fall in prices from peak of around 27%."

This is overstated, it seems: http://www.urbandigs.com/2010/07/10yr_manhattan_median_sales_sn.html
That's 12.3% off peak, if you're counting. Is there more downside risk? Absolutely. But don't start counting your chickens...

Haha, bjw: I predicted that we would fall to 2006 prices - that's documented everywhere - and eventually back to 2005 prices.

I don't doubt the recent uptick in median sales prices, but I don't think it will hold in the longer-term. If you go back just a bit on the chart you'll see that the price level in the prior quarter was just as my example above: 2006 prices.

I believe we will eventually fall to about $750 psf for prime Manhattan, representing a further 25% reduction, approximately. At present levels properties are simply too expensive compared to rents, and compared to incomes, and compared to the financing that is available for them.

This will take time, there will be ups and downs. As steveF so eloquently states: "Nothing is a smooth straight line up. get real dude."

Or down.

Fair enough, Estevao. I thought you predicted 2003 prices, or something like that, not 2006. But no worries. It'll be interesting to watch regardless of what happens.

"I thought you predicted 2003 prices, or something like that, not 2006."

2006 prices are along the way to 2003 prices, no? And 2003 prices are around $750 psf. I sold my apartment in 2003 for approximately that.

stevie, how is your rental website going? must be busy these days, congrats. did you rent julia her studio?

I love hearing this bright "news" from economists who have JOBS and who never lost their jobs in the first place.

Try telling the roughly 440,000 New Yorkers still *unemployed* that the "slump" has "ended".

so until we have 0% unemployment, the economy cannot be considered to be recovered? I'm not saying that things are great right now, far from it, but your logic is absurd.

You also quite famously predicted 75% off, Steve. Last I heard prices were stabilizing at around 20% off.

Your crystal ball is no clearer than anyone else's, not by a long shot.

he's busy booking 100 more julias and w67thstreets renting apt's on his rental website after reading his banter.. the guy's busy okay, easy on him :)

"You also quite famously predicted 75% off, Steve."

Never, ever, ever did I predict that. Not once. Sorry. What I said was 50% off peak, we've been at about 27% off. I also said that it would take years, not months, and that there would be ups and down, and that it could happen through a combination of falling property prices and real price erosion through inflation.

It's not over. Rental prices are inching up, but so are vacancy rates, I think it's unsustainable. I read today that the average salary at Morgan Stanley was about $275,000. Lots of people make more than that, lots make less, but on average, not even at Morgan Stanley do they make enough to afford to buy property in this market.

An economy cannot survive on Goldman Sachs alone.

A deeper and deeper hole steve digs, e-i-e-i-o

im surprised you didn't end that with a link to your rental website, being the great marketer that you are.

does julia enjoy her new basement studio rental or do you not speak with tenants until lease renewal?

I'm not sure I understand the accusation that the bears on this site own rental properties and that's why they are bearish. If steve, w67th, etc owned rental properties they should be cheering for an improved economy, increased jobs, higher sales prices, higher bonuses / incomes, etc, which would all lead to higher rents. If there are people on this board that are bearish because they think it will help their rental income, they clearly have no idea what drives rents and should get out of the landlord business.

hey juice. who says that at least some of the bears aren't fully aware that their own situations would be better with a booming economy, no matter how generated?

I'm a prime example. Our hhi is directly impacted by the economy, I don't want to buy on the city so I don't personally care terribly where prices are headed and I own a house upstate, which would obviously benefit if a third of the employees in Albany were not laid off.

What if we have a double slump?

Juice- I'll take a stab at this: If you are an investor in rental properties who believes that the current P/R multiple of 18x is too high, you could simultaneously wish for rents to move higher and property prices to move lower to hit your fair value multiple of say 12x. Assuming you are a long-term investor, you would want prices to move lower while rents stagnate or improve so that you can increase the size of your portfolio. To take an example, I'm pretty sure that Buffet would like to see the profits of his publicly traded portfolio companies to stay strong or move up while the stock price moved down so that he could increase his position at a better valuation.
I don't see the incongruity at all.

What if we have a triple slump?

or a w shaped slump...

That's just a fancy term for double slump ... you mean a vw-shaped slump.

What if we have a WW-shaped slump?

No A VW is a car

That is a logical argument printer but I would assume these investors would just go find another asset class rather trying to convince a board full of strangers of impending and colossal doom.

My point being, I can't imagine an ulterior motive for bearishness other than hoping prices come down so one can buy (which I respect and appreciate). I believe steve, AR, w67th, swe, etc are bearish because that is what they truly believe, which is all you can ask for here.

I don't believe that Steve, AR or swe are investors of rental properties. Steve and AR both thought they sold at the top of a bubble, only to see prices run up so sharply that even with the burst they are still well above where they sold, so they are still hoping for vindication - totally understandable. swe i think is someone who just thinks prices are too high and would buy if he saw value. w67's issues go well beyond apartment prices in nyc.

i think i misunderstood your prior comment, juice. i can't speak for the others, but i must confess that i am mightily bemused sometimes by comments by the likes of licc that i "want" things to fall apart. when prices adjust some people are hurt, some are helped. from a personal standpoint i think that a city that is more accessible for both purchasing and renting will likely be more vibrant and interesting, as long as we're not talking something like detroit, but that's just an opinion, and has little to do with the price of tea here, there or anywhere.

but that comment by steveF about five people being hired for every three laid off, that's just wrong, on so many levels.

last i heard STEVE lives in Long Island and doesn't own anything in NYC.

he DOES own a rental website and has mentioned that on here before.

steveF, f you. you posted this, presumably you read it, and you still make your assinine comments about employment? here's the text for those who haven't read it. the last paragraph is nice. nice cut and paste job without using ellipses, steveF. oh, and by the way, i don't know if you recall the charts on stimulus distribution, but NYC was one the greatest beneficiaries.

"New York City is gradually recovering from a deep but surprisingly short recession that ended in November, but its manufacturing industries are not pitching in by adding jobs, economists from the Federal Reserve Bank of New York said Thursday.

The economists said it was now clear that the recession in the city that started in May 2008 ended in November 2009, a span of about 18 months. By their definition, the local recession was shorter than the national recession, which began in December 2007 and most likely ended in late summer 2009, though its end has not officially been pinpointed.

William C. Dudley, the president and chief executive of the New York Fed, said economic activity in the city and state had “expanded at a relatively brisk pace since the beginning of the year.” Mr. Dudley added, however, that a slowdown in hiring in June indicated that “the recovery is likely to be a bit bumpy.”

Still, compared with the national economy, the city has rebounded faster than in past recessions.

Jason Bram, a senior economist with the New York Fed, said that after the last two deep recessions, the city’s recovery did not begin for a year or more after the national economy began to grow again.

“This one appears to have been shallower and shorter than the last ones,” Mr. Bram said.

By some measures, the city has been more resilient then the rest of the metropolitan region. The number of private-sector jobs in the city was higher in June than it had been a year before, while the rest of the state and New Jersey both had lower job counts over the year. The city’s unemployment rate of 9.5 percent remains as high as the nation’s and much higher than in the rest of New York State, the economists noted.

New Jersey appears to have stopped weakening, but there are few signs of a rebound, the economists said.

One bright spot in New Jersey has been private-sector job growth in the northern counties closest to New York. Another has been the state’s manufacturing sector, where the number of jobs increased by 1.3 percent from May to June — about twice as fast as manufacturing jobs grew nationally. The opposite has been true in New York State, where manufacturing jobs increased just 0.2 percent this spring.

Another troubling signal for job-seekers came from the New York Fed’s latest survey of manufacturers in the state. Most of the respondents said they did not think that the level of general business activity was any better in July than it had been in June.

Even worse was that, on average, they said that they expected their sales to be 8 percent higher this year than last year, but that they did not expect to increase employment at all."

printer, how droll. i don't care. really. i wanted to spend less monthly, that's why i sold. i also thought we were in a bubble, but i never once considered whether or not i was selling at the top. i don't care about tops, except i don't like to buy during them.

you and licc. i don't need vindication. for what? making a lot of money but not as much as i could have? i think a home is both a place to live and an investment, but that sounds like you think i'd equate housing with the stock market. which i don't. our income declined after 9/11 and i was no longer comfortable with the monthly payments, despite still being well under underwriting limits. i can't understand how people enjoy being house rich and life poor.

don't believe that Steve, AR or swe are investors of rental properties. Steve and AR both thought they sold at the top of a bubble, only to see prices run up so sharply that even with the burst they are still well above where they sold, so they are still hoping for vindication - totally understandable. swe i think is someone who just thinks prices are too high and would buy if he saw value. w67's issues go well beyond apartment prices in nyc.

excellent diagnosis of our remaining bears....they would rather make foolish financial transactions rather than admit they might have made a mistake by not buying back in late 08/early 09. Hey, you made a mistake, so what? live and learn, now you know! make money next time. Reasonable response right? Not with them, they'll respond with the usual venom b/c they just can't stomach the fact that they were wrong and someone else benefitted financially from their errors.....who cares if u were wrong!? get over yourselves. Move on and get the next bus.

speaking of the stock market, does anyone ever ridicule people for selling when they hit their target price? you buy a stock and say if it goes this low, i'm selling, and if it goes this high, i'm selling. that's called disciplined decision making, as long as it is based on some rational criteria.

so where is the scorn coming for someone looking around and saying, hey, i've made a decent amount, and i don't want this forever, so i'm selling at a profit? until right before the crash (and yes, i did get out in time) our money was then invested in equities. i haven't run a comparison, but we probably didn't lose a cent.

A number of the purported bear renters, are in reality just priced out.

made a mistake by not buying in '08, early '09? you're out of your f'ng mind, except perhaps for trophy park avenue properties, which have never been my target.

btw steveF, did you respond to my other comments? you still saying that five people are getting hired for every three laid off? any proof?

rs, and you know this how? another fact pulled out of your ass?

Market bottoms are hard to call. Everyone will claim to have called the bear market six months after it's obvious. In the meantime both the rental and purchase market are firming.

Maybe aboutready's husband can step it up and sue more corporations. If he extorts enough money, she and her husband
will not be priced out of the market.

rs, i don't think so. the purchase market is now starting to show fairly serious stress at the level you usually expect it to show initially, the bottom and the fringe and the small units. these were remarkably resilient, and you saw weakness at the top for a while.

the last couple of months i've seen distress go down the ladder, and if you can't figure out what that means for the move-up market, well, just sit and watch. and this with extraordinary low rates, fha deals, conforming at over $700k, and the tax credit (yes, of course some people bought smaller units in manhattan as a result of the tax credit, humans are stoopid).

maybe julia can get more people to agree to risk pool for her expenses so she has more money and can be less bitter.

sweets, i'm not priced out. but thanks for your concern.

btw, you do realize that my husband doesn't sue anyone? i've been trying to explain this, but you seem too thick to get it. other corporations sue corporations. it's not that hard. you can grasp it, really. just try.

Maybe aboutready's husband defends corporations against lawsuits from lowlifes like you. Lowlife healthcare collectivists like you.

Apartments with decent views,nice finishes and in well run buildings are closing slightly higher than similar comps from a few months ago. But there is plenty of supply so if you have a bad view or are on street level(yada yada yada), then you are still in trouble.

Would be interesting if the brokers chime in.

I think people collecting checks from the government should be bowing down to the top 1% of income earners. They pay all the bills. Start bowing alanhart, watch your leader bowing to the saudi princes, he should be bowing to the producers.

sorry, large one, i don't need anyone bowing down to me. and if you were in the top 1% you wouldn't feel the need either.

you admire the saudi princes? aren't you grand.

Maybe not bowing down, but certainly not complaining that the top guys aren't providing more charity.

I hate people who are obsequious aboutread,. Unfortunately, most of you politically correct, libs fall into that category. Notice how obama goes around bowing to everyone. What is wrong with him?

julialg, if you hate the United States of America so much, why don't you renounce your citizenship and move back to Cuba or Sicily?

"julialg, if you hate the United States of America so much, why don't you renounce your citizenship" You keep on saying that alanhart. Why don't all you parasites leave and let America, be the great country that it was before the era of entitlement and benefits.

i'm fairly certain i've never been called obsequious. probably not even behind my back.

there are whole societies where people believe that bowing is a sign of respect, kind of like a handshake. they are definitely not all politically correct libs. maybe we should quit shaking hands, saying hello, or signing letters respectfully yours. wouldn't want to be obsequious. slavish devotion of any kind isn't positive, whether it be to oneself, obama, or ayn rand.

c'mon aboutready, we are about 10% off peak pricing according to every major real estate media report. Inventory is approaching sub 8k if we haven't hit there already. Sentiment(demand) is clearly changing for the better. You didn't buy when the manhattan clearance sale was happening and now you still don't get it. When the prices for condo studios gradually approach 1 million in the next 6,7 years kindly retrieve this thread.

But the leader of America bowing to the suadi king? Wow... 19 suadis knocked down the towers. Did you notice on Sept 11 2009, Obama's first year in office, he didn't even come to memorial in New York. But, two days latter, he is in NYC bashing the financial industry. Did you catch that alanhart?

the silence with somewhereelse is deafening. I'm afraid she might have imploded at her desktop while typing. This is a perfect SteveF thread to throw her over the edge.

"Sorry steve wrong again", "if you only knew the truth steve", "can you seriously be that wrong steve?" etc etc. I bet her keyboard has barely visible lettering as her fingers smash down on every letter. Plus all the drool from the panting.

No, I can't manage to slog through your broken English. I think it's something about Six Flags Ground Zero and t-shirt sales there, but not at all clear.

I'm surprised that nitwit LICcomm hasn't chimed in by now.

This is a very repated argument, but it does appear the beneficiaries resent the benefactors and vice versa. And it's also true the sense of entitlement is beyond belief.

back in that short frozen market period of late 08/early 09 one of you bears could have bought something from a desperate seller for about half the price of today. Not anymore. However, I'm sure there were some bears on here who had some balls and scored.

steveF, no, you're wrong. you didn't do the math correctly. go back and look at your posts on the correction and figure out where you went wrong. you're strong suit is definitely NOT percentages of percentages.

sentiment hit a f'ng cliff last month, worst in about a year. inventory only hit 9000 in around may, and has still not fallen that much given the time of year. AND they're starting to build again.

largeone, you know what bush did to get the saudi families safely out of the US so that they wouldn't have to be questioned? sure you do. you're an informed, intelligent, sentient being who doesn't just listen to fox news, right? was 9/11/09 an anniversary? the president needs to come to nyc every year on 9/11? get real.

you like the financial industry, julia? why? perhaps you or yours are employed there? that's how you get your lovely health insurance that allows others to pay for the costs of your care?

Hey aboutready, Maybe your husband's firm can sue saudi arabia. There is really a lot of money in that pot and he would actually be doing something worthwhile. What is it like to be perpetually on the dole alanhat?

largeone, you know what bush did to get the saudi families safely out of the US so that they wouldn't have to be questioned? sure you do. you're an informed, intelligent, sentient being who doesn't just listen to fox news, right? was 9/11/09 an anniversary? the president needs to come to nyc every year on 9/11? get real. I know it was a disgrace. Bush is a disgrace. What's new?

on what grounds, lrg one? in what court? legal standing?

lieyers are very creative when other people's money is at stake. I am sure there is some loopholes. However, the regime will prevent it.

Her family are all itinerant laborers in feudal Sicily, and she's happy knowing they're all kept in their place.

What is it like to be perpetually on the dole alanhat?

"there is some loopholes"

yes, go back to sicily where the regime is more suited to your needs. i think health care is even more risk spread there, but i'm not sure.

btw, the regime that helped the saudis avoid questioning? not this one, toots.

steveF, you might want to have a look-see at the mmwc's thread for midtown. the smaller market is getting its gonads shoved down its throat.

ar, maybe people wouldn't care that you sold when you did if you didn't righteously lecture people that they are wrong to own instead of rent, and if your lecturing wasn't full of mistakes to boot. Someone did the analysis on your situation in another thread (selling in 2004 and then renting) and clearly showed that financially speaking it would have been better not selling.

Your analysis suffers from a bad combination of arrogance and falsity.

BINGO! And how it comes across.

aboutready, the smaller market inventory is being gobbled up. In 2 of the midtown east buildings where I own there are no studios left and in another one in Clinton 3 studios just went to contract in the past week.

I prophesized the arrival of LICcomm and his most recent nonsensical nincompoop post, didn't I LICcomm?

ohhh aboutready take it easy with the gonads down the throat stuff. You haven't been made yet. Now go home and get your fkn shine box.

No building is experiencing declining costs of operation. Labor,Energy and taxes are all going up. It's only a matter of tiem before rents reflect this and a reasonable profit. Over the long run that is what one should expect. People want to buy before they get priced out again. They know they have time, but a year or so out, the reality could be very different in terms of what people can afford.

Or rents can deny owners the recoupment of those increased costs, let alone profits, and their owners can torch them for the insurance money and at least get something back.

steve, have you had a look yet? prices below 2005, left and right? not counting renovation costs? they may be gobbled up, but their toast.

really, licc? it was wrong to sell and put my money in equities? how do you know that? really? do you have my brokerage statements? it was wrong to alleviate a monthly situation i felt wasn't comfortable? really? you pay my bills and know what was best financially for me?

fuck you and the righteous raft you rode in on. real estate prices are like a religion to you. to me, they're just one part of life. you clearly are far more invested in real estate prices remaining stable or increasing than i am in them declining.

and you're so fucking wrong. i'm one of the few bears who is generally supportive of people making lifestyle decisions to buy even though i think prices will decline. i wouldn't buy, but as i've always said i can very well understand the desire to buy, and not everyone has the patience to see out price deflation in the face of massive gov't stimulus.

but, i think buying new deveopment today in lic is stupid beyond belief.

sorry, they're toast, not their. i have such problems with you're, your, etc.

oh, btw licc, i thought you didn't care about my personal situation. so ...

What is it like to be perpetually on the dole alanhat? Please tell me. Nothing productive, just wasting away waiting for the next check. How do you handle it? You have a lot of fellow travelers, you all feel nice and safe. Don't think you will starve and freeze. Always someone else to take care of poor little alan.

aboutready forget about the you're/your. deal with the FUs and gonads down the throat thing instead. Not very ladylike.

julia, what is it like to always make unfounded assumptions about other people's lives?

do you reach levels of enjoyment that are obscene imagining alan picking up the mythical unemployment check? because that's what it is, just a middle-aged woman with an overactive imagination.

think of some arts and crafts projects for the kids instead.

steve, who cares? here's a question for you. if a market was down 25% and is now from that point up 10-15% where is it?

ladylike. i think my head is going to f'ng explode.

aboutready
'speaking of the stock market, does anyone ever ridicule people for selling when they hit their target price?'

AR, how about an experiment: Go on an AAPL message board, tell everyone how you bought at $80 and sold at $120, and how stupid they are for holding on. Rant on for 2yrs about the evils of capitalism, all the while you're decadent lifestyle is funded by that great destroyer of value and jobs- corporate law. Bemoan the unjustness of corporate bailouts while you yourself benefit from one of the most unjust subsidies of all - rent stabilization for upper income folks. Do it all in condescending manner, and let us know if anyone ridicules you.

oh, and don't forget to tell them about the U6!

ladylike. i think my head is going to f'ng explode

I have that effect on people :)

"think of some arts and crafts projects for the kids instead" hahahahaha "julia, what is it like to always make unfounded assumptions about other people's lives?" I assumed your husband was a lawyer and i was right. And i know alanhart is on the dole. You can feel it.
He reeks of it. So what. 50 million Americans are on food stamps, Everyone is abusing social security disability insurnce,. The unemployment benefits are what 2000 weeks now. Alan fits in real well.

>steve, who cares? here's a question for you. if a market was down 25% and is now from that point up 10-15% where is it?<

don't try your little tricks aboutready, you snaeky little thing we all know about the down 50% need 100% to break even. My point is the median was down, during the frozen zone, 25% from peak. Now the median is down about 10% from peak with inventory being eaten up and sentiment/economy getting better.

hey printer, you seem to be one of the few who finds me condescending. i've helped numerous people off board do comps and find places. my RS fell into my lap. didn't do a thing for it. so i should move and get rid of it? stupid. i agree with AH also, the estate tax laws are absurd. does that mean i won't take advantage of them as long as i can? duh. and my decadent lifestyle is quite recent. i'm enjoying it mightily, though. particularly since i didn't overpay for housing so i can really have some fun and still save loads of cash.

right, corporate law is the great destroyer of value and jobs. you MAKE ME CHORTLE. still partnerships, still conservatively run for the most part, and not hawking for business trying to convince others to sue. the legal system actually had very little culpability in this collapse. although there is some potential for some interesting developments, but mostly relating to the activities of financial companies.

maybe sudan would suit you? who needs a legal system?

fail. try again.

I'm just really glad that my tax dollars support the men in white coats who are going to catch up with julia, again, and put her away for her own good, again, so that she doesn't endanger herself and others, again.

ar, I've told you over and over- I don't care about you or your personal situation. I commented strictly on another person's analysis of the transaction on financial terms.

Thanks for the cursing again, I'm glad everyone sees your true colors.

And thanks for insulting LIC while you live in . . . Peter Cooper Village. LOL

They'll find her at the corner table in McDonald's with the cup of coffee that she's had on her tray for four hours, along with the four cigarette butts that she found on the sidewalk -- she can get some more mileage out of them, and the filter smokes up good too.

steveF, that was funny.

no, julia, you're wrong. AH is not on the dole. your "sense of feel" is way off.

please, you didn't assume my husband was an attorney. i wrote it. maybe you're having pituitary issues, early dementia?

50 million happy, greedy souls on food stamps. when my daughter grows up i hope she's avaricious enough to be on food stamps. geez.

"They'll find her at the corner table in McDonald's with the cup of coffee that she's had on her tray for four hours, along with the four cigarette butts that she found on the sidewalk -- she can get some more mileage out of them, and the filter smokes up good too."

What is wrong with that? Better than being on the dole.

"excellent diagnosis of our remaining bears....they would rather make foolish financial transactions rather than admit they might have made a mistake by not buying back in late 08/early "

Uh, SteveF, aren't you describing... uh... yourself?
making all these stock trades NOW because you missed out on the stock runup...?

> Now the median is down about 10% from peak with inventory being eaten up and sentiment/economy getting better.

Actually, the medians by size and by ppsf are all still down 20% or more (with the exception of studios, down 18% now)

SteveF's is basing his decisions on data he doesn't understand...

which dole am I supposed to be on: james dole, the pineapple king ... or sanford dole, the president of hawaii?

"Actually, the medians by size and by ppsf are all still down 20% or more"

No, median price overall down 12.3%. It's quite clear: http://www.urbandigs.com/2010/07/10yr_manhattan_median_sales_sn.html