Bloomberg Article on NYC real estate

LOL- but ... but.... the FOREIGNERS will save us here in Manhattan!!! it's different here!!! wall st. implosion and credit market evaporation have no bearing on Manhattan real estate where it can NEVER go down!!!!!

Just like how Florida was oh, sooooo unique (nowhere on the earth like it!).

We're getting close to the end of the 'denial' state here on this board... and when the next state kicks-in, which is fear, we're going to a dry-up of posts by the perma-bulls here. That's when writing spunky's rent check become EVEN MORE FUN!!! YAY!

Happened in so many other regional boards. The Arizona board. The Florida board. Blah blah blah arguing back and forth, with the Bears always backing up their analysis with data while the Bulls cling on to 'history' and misguided hopes that "xxx is unique and different".

Then, the fear sets in, and man, the vociferous perma-Bulls simply go quiet with their tails hanging in between their legs.

Repeat happening here on this NYC board, the last bastion of the excesses in the credit and housing markets of the past decade.

Can't wait till desperation, panic and capitulation sets in. That's when it will get REAL quiet up in here.

digs, the 3250 number are the transactions for Jan & Feb? Correct? I assume this is closings not contracts? So, 6225 would be a four month supply of inventory not a six month supply as some people have claimed?

20-30% reductions in every neighborhood ny the end of the year

MMafia as long as Gold continues to plunge like it's doing today I'm a happy camper.

spunky, what a lame response. can you not admit things are shifting in NYC RE?

Market is slowing - people will find good deals: 5% - 10% decline MAX. That's my opinion.
My gut is that the NY market will see drastic cuts on list prices (currenly, significantly above actual sale prices) but not much of a drop in current actual selling prices. There are plenty of places selling out there - people are just not accepting 20% increases year-over-year anymore -- and that's what palces are listed at.

Lobo makes an important arithmetic point. When you see listings slashed by 20-25%, it looks like Armageddon. But when you consider the ambitious appreciation that was built into those listings from comps in the previous year or two, it's not really such a big deal. 25% off a lot of asking prices doesn't even get you back to 2005 levels.

Current listings here: 6,937 not in contract. Also doesn't include lots of new development - either not listed or inventory held back - + FSBO, small agencies, + temporarily "off" the market because it's been "on" the market at too high a price for too long. So the real number is likely higher: Miller Samuel works for real estate agents, Douglas Elliman pays the bill, so it's in their interest to keep the numbers low.

FYI in the past about 10,000 properties change hands each year in Manhattan. It will be lower now with the slowdown on Wall Street. 6,937 / 10,000 = 8+ month supply. The truth is probably closer to a year. More new construction coming online - or are property bulls going to dispute that? No jobs = a lot of canceled contracts. Happened in Las Vegas, Miami, San Diego. Better to lose your deposit than to saddle yourself with mortgages you can't pay.

Jumbo mortgage rates up 50% in the past two months, if you can get one. 30% down minimum. Co-op loans to dry up because banks don't need the extra risk.

It's a perfect storm. I've said it before, I saw it in Miami in the 80's and 90's, in London in the early 90's, now here.

What foreigners? Low $, right? Alas, to buy in $ you have to borrow in $. The $ is currently at a historic low, and in the long-term it will go higher. So yeah, you get a deal now, but it's a long-term asset, remember? If the $ recovers 30% long-term, that's a 30% loss, plus the nominal price depreciation in a crashing market = only a foreign fool would invest in this market. And in any case, property is deflating there, as well: why would they want to compound their pain.

No, no foreigners to the rescue. That's what they said in Miami.

Lobo: -50%. Rents are falling. That's the indicator that incomes are also falling.

And so I don't get accused of being a doom-and-gloomer again, I am bullish on a lot of other sectors of the economy and the world, just not the overinflated US property market.

Forgot this: MMafia, good post:

Happened in so many other regional boards. The Arizona board. The Florida board. Blah blah blah arguing back and forth, with the Bears always backing up their analysis with data while the Bulls cling on to 'history' and misguided hopes that "xxx is unique and different".

Facts and figures, not accusations. I told my friend in San Diego to sell his place even though the buyer kept on asking for a reduction. He wouldn't do it. Now he's on the edge of bankruptcy.

He didn't believe it. San Diego is such a beautiful place! (And it is.) Population growing, economy growing...

...and one big fat bloated real estate market that you could only afford using creative financing that can only catch up to you in the long run.

Next week I'll report back from the Inland Empire.

In the article it stated the following. Dam it would be nice to see a pull back so more people can buy into this.

"Property prices are continuing to rise, for now. They gained almost 14 percent to a median of $850,000 in the first two months of this year, Heym said. Miller, Terra Holdings and Corcoran will report first-quarter results this week.

Condo and co-op prices rose throughout last year, gaining 6.4 percent in the fourth quarter of 2007 compared with a year earlier"

"I am bullish on a lot of other sectors of the economy and the world, just not the overinflated US property market."

How can that be steve? If everything you say actually happens; incomes, savings, spending, etc. will all be way down. How can you be bullish on other sectors of the economy, when those sectors would drive positive economic growth and therefore prop, or at least sustain the fall of real estate prices? You don’t believe in market balance do you?

"Miller Samuel works for real estate agents, Douglas Elliman pays the bill, so it's in their interest to keep the numbers low."

Oh, that's not a report we should trust then. It doesn't say what you want so it must be wrong. According to that article (that you are so happy to quote in all other areas), there is a 4 month supply of inventory. If the inventory is low for all of those reasons you state, so are the amount of closings. 4 month supply right? Not 6.

Yes, Spunky, that's true: the MEDIAN price rose. Because the only thing that sold was at the top end. If only you understood statistics, and what they mean. I deliberately didn't mention it because I just KNEW you would! But you failed to mention this:

"The median apartment price has roughly tracked Wall Street bonus income since 1997, according to Miller. Employment at investment banks accounted for almost 15 percent of the city's total privately paid wages in the first quarter of 2006, according to the U.S. Bureau of Labor Statistics.

``Any time you lose financial sector jobs that's problematic for the city economy because these jobs are so much more highly compensated,'' said Ronnie Lowenstein, director of the New York City Independent Budget Office. Future real estate gains are in jeopardy over the next two years because Wall Street may cut another 25,000 jobs by 2010, Di Natale estimates."

We're not looking backwards, Spunk: you know, "past results are no indicator of...." You can no more look at it that way than say that jumbo interest rates rose 50% in the past 2 months, so they'll rise again 50% in the next 2 months.

That is a fallacy of extrapolation. Look it up. The only thing you can look backward at is not absolute numbers, but mathematical ratios. I can't say, "Wages rose last year so they will this year." But what I can say is that "Over the long-term wages are highly correlated to rent. Wages are falling; rent will fall with it."

So blah-blah-blah to you Spunkster. We're in the stand-off phase. The deals reported today are pre-Bear Stearns, pre-interest rate hike. Pre-Citigroup layoffs. There's a long lag between offers and closings, especially on co-ops, but most especially on new developments, of which there is a ton. Those numbers are working themselves into the system right now.

Spunkster, you're out of your league.

stevejhx I do agree on all your points but foreigners buying now with a low $ should get a gain if the $ recovers 30% long-term as you said.

here is how I interpret months supply from #s given:

3,250 = # transactions for JAN + FEB

So, lets multiply this BY 6, and get a rough idea of what sales volume may turn out to be based on this trend (although everyone knows transactions in JAN + FEB will likely be much higher than transactions from JUNE onward to end of year, so if anything, using these #s as a constant is overly bullish)

3250 x 6 = 19,500 transactions for 2008 at this pace

19,500/12 = 1,625 transactions per month

TOTAL INVENTORY IS 6,225.

6225/1,615 = 3.8 months supply at this current pace, or 4 if we round up.

**Again, chances are highly likely that sales volume per month at the end of 2008 will NOT be 1,625 per month! That assumes a year round bonus season.

of course Steve does have points when he states:

a) unknown new dev inventory
b) FSBO
c) Small agencies not included in REBNY and/or shared with Manhattan brokerage community

So, we can always question the number! Whats important to pull is the TREND!

Agreed digs, but wouldn't you have the same issue on reported closings for a,b, & c or does that come from a different source?

no, mcap, because let's say they live in Europe. If the $ appreciates against the euro, they lose.

urbandigs, though I respect you much and usually agree with you, the problem with your analysis is the number of transactions: 19,500. Historically, the average yearly number of real-estate transactions in Manhattan is 10,000. The listing figure I pulled from here is for Manhattan. No one knows actual figures - MS is just a survey, and, believe it or not, real-estate agents lie. It's like a self-reported salary survey: everybody claims more income than they have.

And obviously the turnover rate is going to fall. Once the velocity comes down, prices come down. Another economic definition.

I also think that "transactions" means closings, which are historical figures, with a 3-6 month lag. Therefore, we're talking about deals that were done a light-year ago in Manhattan real-estate terms.

I stick by my analysis of supply.

SteveJHX what you are saying that they should of used mean as opposed to median?

I don't agree on the FX argument. Say a foreigner has $1mm EUR to spend now. He/she exchange that into USD$1.6mm and use it to buy property here. If dollar strengthens vs EUR back to say 1:1.3 in a year, even if the property remains the same in terms of USD, it is now 1.6mm/1.3 = 1.23mm EUR.

Having said that, it is those foreigners who have already bought that are feeling the pain of a weakening USD.

where did you find historical average! Yes, that should have been used. Using JAN + FEB is useless and I mentioned that in the comment. Also, what was avg for JAN + FEB for past 5 years or so?

yes, stevejhx, where did you find the historical average?

stevejhx/Slee: Regarding FX, a foreign investor's exposure depends on his down-payment or equity (a USD-denominated asset), how much he owes on the property (a USD-denominated liability), and his stream of rental income and property expenses (USD-denominated cash flows); that's assuming he chooses not to hedge some or all of the exposure, which is actually pretty easy and not very expensive.

It seems that the mean vs. median discussion is about to start up again. In a nutshell, median is much more meaningful (no pun intended) than mean, but it's far from perfect.

Miller Samuel 1998-2007 reports 9,113 average sales per year in Manhattan Co-op and Condo.
http://www.millersamuel.com/reports/pdf-reports/MMR07.pdf

Give stevejhx time so he can look up that historical average in his book titled "worse examples using silly but true outlying numbers that will fool most people" written by BS Artist

9,113/12 = 759 deals a month

Given current inventory of 6,225, that would mean months supply of 8.2 months.

Here it comes. I can take it but Im not sure the spunkman can. I'll watch the rants from the sidelines.

mcap, thanks for posting. Steve is correct, if you toss out 2007, supply would be even higher than 6 months.

I'm fine with any of your numbers Urban.

hey at least we can intelligently discuss this! I wonder, how will all the new dev deals that will close in 2008 (but signed contracts in 2007 at prices at that time) effect future price & price per sft reports?

May be misleading and come as inventory rises and sales volume slows. People always take price reports to be current and reflect teh current marketplace! But in reality, we have thousands of new dev deals that will close at ppsf of $1200+! Anyone expecting near-medium term price reports to show prices falling are going to be disappointed!

Hmm, let me call JM for a quote for a post.

Interesting point digs, also those new dev deals don't show up in inventory but will show up as closed at some point in 2008, correct? So we will have an increase in ppsf but without a corresponding decrease in inventory?

yes we will

wasthe 6200 nyc or manhatten? you are comparing manhatten sales with NYC overall inventory I think

I can't find any general project map for Manhattan construction, but I did find one for downtown. Check out www.lowermanhattan.info for a list of projects that are coming to fruition 2008-2012. There was some article, I don't recall the source, on how the upcoming change/restrictions in the tax abatement program has caused a development push to get foundations laid by (the middle of the year? I seem to recall.) These units are NOT going to be sold, with few exceptions, in pre-sales. They will not be able to seduce the buyers with 5 to 10% of the units being released, with threats of automatic subsequent price increases with every certain number of units sold. 2009, party over, out of time, tonight we're going to party like it's 1929 (thanks to Krugman for the 1929 reference).

mcfm85a, it's Manhattan, and if you consider JuiceMan's comment, which I have been spewing left and right, these numbers underrepresent actual inventory because often new development never entered our equivalent of the listing system. Transparency, hah. Noah, I think Jeff recently opined that there were about 19000 condo units in the pipeline (obviously not counting Hudson Yards and the Solow East River developments, which were only recently congealed (for want of a better term)). We have 6200 units now on the market. I think the demand for luxury condo developments (certainly at these prices) is close to finished, many developers paid WAY too much for land and constructions costs skyrocketed during these times.

Well I'm glad somebody finally agreed with one of my figures and didn't force me to look it up. It was also published in the NY Times some time last year, probably quoting MS, which is where I got it from.

That's a primary point in economics. Increased velocity = inflation. Money supply, anything. We've seen an inflationary bubble unconnected to fundamentals. The velocity falls, the prices fall. One more thing.

I'd like to have more market data - what the velocity was in each year since 1998, the mean and the standard deviation. Then we could determine how much of the increase in recent years has been due to increased velocity: simply more sales.

spunky, no I don't want you to use the mean or the median or anything in isolation. The median tells you the price that half of all properties sold above, and half of all properties sold below. As the median rises, it means that more properties are selling for a higher value. But it can't be used in isolation. You need to add the mean - or average - and compare the two. The mean will give equal weight to outliers, whereas the mean will not since it counts absolute numbers, not prices. You take the mean, median and the standard deviation - how far each individual data point diverges from the mean - and you get a clear picture of how a market behaves along a curve. The final "average" to add - mean and median are 2 different types of "averages" - is the mode, which is, if you took a random property, what would it most likely cost? That is of interest especially when you segment by property type and neighborhood: if I'm looking for an average 2-bedroom apartment in Tribeca, what will it most likely cost? It won't most likely cost the mean or median; it will most likely cost the mode.

Is that okay?

And spunky - if I could use expletives! - how funny is it that you say, "Give stevejhx time so he can look up that historical average in his book titled "worse examples using silly but true outlying numbers that will fool most people" written by BS Artist."

At the exact same time that mcap says, "Miller Samuel 1998-2007 reports 9,113 average sales per year in Manhattan Co-op and Condo. "

Okay spunky, you're dead in the water, like kylewest. Any future stupid thing you say will now be answered with that particular part of the thread. I do considerable research on everything I say before I say it. You, on the other hand, have been reduced to assh*lehood.

It's my new word. Put it up there with the other word that describes the spunk, "truthiness."

West81st, hedging foreign currency is not at all as simple as you say, and it vexes every corporation in the world, because every foreign currency transaction - and all assets - must be revalued on every P&L and balance sheet. Unfortunately for us all, if you own a fixed asset in a foreign currency, you cannot hedge it. You can hedge interest rates and a lot of other things, but there lies the fixed asset in the foreign country and you can't move it so you're stuck: it's only price is in dollars, and it's subject to the change in the exchange rate.

If I buy a property in London for 10,000 pounds and 1 pound = $2 that property cost me $20,000. If that property maintains its value in pounds but the dollar rises in value to 1 pound = $1.50, then I lose 25% in dollars even though the actual property value hasn't changed. Because I bought the property for $20,000, and now it's worth $15,000. If your base currency is pounds (or any other), and the dollar rises, you lose. Couple that with an actual fall in value in the price of the asset in the base currency, and you're dead.

That is a huge amplification that there's no way to hedge. If you buy here because the dollar is cheap, then the dollar rises, the asset here will lose value there. It's inescapable. That's why the "foreigners will save us" mantra is so dumb.

urbandigs, I am making an assumption about houses - not included in the MS figure but included on streeteasy - but your 8.2 month supply is about right. It would be nice to have more detailed statistics, but we don't.

Everybody, there will be a 3-6 (or more) month lag before we see the real state of the property market based on the MS figures. That's why rents are so important, and especially at pure market-rent buildings: they are very, very sensitive to market conditions, professionals do not want an apartment to lie fallow, so they will lower rents till they get somebody to take the place.

aboutready, you're right about the underreporting of actual inventory in the figures. If you look at the building permit statistics, there are about 30,000 new units already approved in Manhattan: a 3-year supply, on top of the usual turnover. Some of them are on the market now, but most aren't, and I agree with the about 20,000 units. Soon you'll be seeing at least a 2-year supply of inventory in Manhattan, just at the time when no one is buying because of the Wall Street mess. And a lot of contracts signed before the BSC mess will not go through. More units on the market.

Most of those units will be turned into rentals, I predict (saw it in Miami, twice), further driving down rental prices.

Guys - bulls, especially - I've been watching the real-estate market closely for about 10 years. I used to go to open houses every Sunday, and see 3 or 4. I've been here, on nytimes.com, individual broker websites. I've researched in detail everything I've said. Right now, you have all the figures: why there's too much inventory (new development), why prices exploded recently (velocity), why rents are falling (incomes), and why property prices have no where to go but down, because you add all that together with no appetite by banks to take on new risk - a.k.a. no or very expensive loans - and there is no amount of wishful spunky/juiceman spin that can change the truth. We are in for a 50% real, income-adjusted decline in the Manhattan property market.

Unless the spunk can come up with more spunk to refute this. Let me plagiarize Mmafia from above:

LOL- but ... but.... the FOREIGNERS will save us here in Manhattan!!! it's different here!!! wall st. implosion and credit market evaporation have no bearing on Manhattan real estate where it can NEVER go down!!!!!

Just like how Florida was oh, sooooo unique (nowhere on the earth like it!).

We're getting close to the end of the 'denial' state here on this board... and when the next state kicks-in, which is fear, we're going to a dry-up of posts by the perma-bulls here. That's when writing spunky's rent check become EVEN MORE FUN!!! YAY!

Happened in so many other regional boards. The Arizona board. The Florida board. Blah blah blah arguing back and forth, with the Bears always backing up their analysis with data while the Bulls cling on to 'history' and misguided hopes that "xxx is unique and different".

I meant, "the median will not."

What? No nasty comments from the Spunkster? Has he come out of denial? It's more than a river, you know, little spunky.

Now you see it: 8 month supply of apartments on the market, based on historical averages. Based on Wall Street we're not going to come anywhere near the historical average this year, making the supply even higher. And that supply doesn't include a lot of what's already on the market (unreleased new development, FSBO, small agencies, contract cancellations, etc.) & what's coming down online in new construction. (I can hear the cement trucks now.) Then jumbo mortgage rates hovering around 8%-9%.

6,941 listings here as of this morning. That is a 9-month supply based on historical averages which are very constant over time: the median is 8,727, the mean - including last year's tremendous blip - is 9,121.

Let's take the median, 8,727. Spunky, press the calculator button, go 8727/12. It equals about 727 transactions per month as the mean since 1998. 6,941/727 = 9.5 month supply of properties on the market if we take the median.

That's a fair estimate of what's listed, because 1998 was a particularly low year (7,646) and 2007 was a particularly high year (13,430). Take the mean of all the other years and you get 8,768 with a low standard deviation of 619 (about 7% of the mean).

So with the prospect of a 2-year or more inventory on the market, what does that bode for the future? Or does the Spunkster expect another $38 billion in Wall Street bonuses this year, leading to property transactions 53% above the long-term median?

Would the Bulls - JuiceMan, Spunkster, Malraux, Kylewest, mh23, mshlee, all of you - care to hazard a guess as to what happens to prices when there's so much inventory on the market. Since you don't understand, dismiss, or ridicule all my reasoning as to why there is so much inventory on the market, now that there is, can you tell me what you predict will happen to prices?

I know! They go up.

People are rightly focused on the implications for Manhattan RE as a result of the dislocation of the credit markets and the troubles being faced by the Wall St firms. A bit of perspective on this, and on the numbers in particular. I posted a portion of this on digs website a few days ago. Thanks digs for the continued insight on this board and elsewhere.

If you review the first quarter results from GS, MS and LEH, the banks actually (surprisingly, in my opinion) managed to post pretty strong results in pure investment banking (M&A and underwriting). Advisory revenues were up, in some cases rather substantially, from 1Q07 and IB revenues weren't meaningfully down. Debt underwriting was down substantially obviously. Now, I will admit that 2Q and 3Q will be harder comparables, but if you look at all three they all generated pure IB revenues at levels seen in all quarters of 2005 (mostly higher than 2005, in fact) and 2006 (at the lower end of 2006), both of which were very, very good years. So to suggest that the banks' revenue streams are falling off a cliff is simply wrong.

Now, moving on the the source of the problems (well, one of them), the credit markets. Two data points to keep in mind. The investment-grade debt markets are still wide open, and in fact with rates low (i-grade spreads have tightened about 30% in the last two weeks - a sign debt investors see more stability and less risk for quality borrowers, and this is playing out for more risky borrowers also, see below), all-in borrowing costs for the majority of corporate i-grade borrowers have declined, and this market is driving much of the debt issuance (and underwriting revenues) we see. Moving on the the high-yield and leveraged loan markets, to blame for many of the writedowns we saw, most people people believe this market bottomed during the middle of February (I am among them). Since then, spreads on even the riskiest high yield and leveraged loans have begun to tighten, March issuance increased and I personally think this market will slowly recover over the next couple of quarters. The bond market is characterized by a much higher level of sophistication than the equity or, in particular, the RE markets, and, at this moment in time, the signs in that market are pointing to more stability, not less (even for lower quality borrowers), and while we will likely see a recession in the form of two very bad quarters in 2008, spreads will continue to tighten in these markets over time, and as a result I think mortgage rates will begin to decline in the second half as spreads on those assets follow non-investment grade bonds. To be clear, the absolute numbers and relative state of the credit markets are both disasterous, but the sentiment is improving in the markets that always, always, lead.

What does this all mean? Mortgage rates down in 2H08, following more stability in the bond markets for high-yield issuers we are already seeing. Investment banking revenues for the large Wall Street firms at or near 2006 levels, which the first quarter numbers for MS, LEH and GS confirm and which Goldman Sachs has indicated publicly. These facts lead me to believe that, on average, bonuses for this year will probably be down 10-25% or so from 2007, consistent with what we saw in 2006. There are a lot of things that will negatively impact Manhattan real estate in 2008 and 2009, which urbandigs has brilliantly documented, but Wall Street bonuses will not be among them, at least not in a meaningful way. Final disclosure: I don't work for a Wall Street firm, but I did up until 2 years ago. And of course, as Dennis Miller used to say, I could be wrong.

No nasty comments and I do appreciate your response. You are very insightful and I was wondering if you can share some of your previous posts and or blogs back in 2005 and 2006. If your forecasts are as correct as they have been for 2008 in 2008 than I am sure your forecasts for 2008 back when you were posting in 2005 and 2006 are equally as accurate. After all you are no Johnny come lately. You are not the type of person that will read todays forecast and then predict what the weather is likely going to be for later in the day.
Please let me know where you have been posting in 2005 and 2006 so I can read your insightful forecasts for 2008 back than. With all your knowledge and the fact you are smarter than everyone else (at least in your own mind) I can't understand why your not a trillionaire.

BTW MMafia if your Gold positions keep continuing their plunge you don't have to follow housing values anymore except for values for the poorhouse.

Spunky, I gave you my response from 2005: I didn't buy, remember? If I've said it once, I've said it a thousand times: I saw open-house lines around the corner and open-cry auctions for properties, and I didn't buy.

That was my prediction then.

You are defeated.

No what I was asking for were your posting back in 2005 stevejhx. If you wrote a fraction of what your wrote the past two weeks than you must have at wrote at least thousand posts in 2005 and 2006. All I am asking where are the post you wrote in 2005 and 2006. What blog site did you use back than. I'm curious about what your predictions for 2008 were when you were posting in 2005 and 2006.

unnamed, even if what you say about the future were true - which I don't think it is and I've documented it elsewhere, your analysis fails to take into account a growing supply. And it fails to take into account the raw numbers demanding: 50,000 jobs cut on Wall Street. And it fails to take into account new regulations.

Never again will there be such demand for real estate, driven by so much leverage. Ever.

Unless you think junk bonds are about to make a comeback, or the dot.coms of the "New Economy" will come back.

There will be new bubbles in the future, but old bubbles never repeat themselves.

spunky I didn't post back then - what does that matter? Before you saw the inventory numbers, I had told you what my decision was in 2005. You said I was stupid.

I also told you when I bailed out of Miami, flipped what I had intended to live in, a property that I sold for $1 million, that now isn't even worth $700,00.

I told you all my actions; you said I was stupid.

You are defeated. A 2-year supply of apartments on the market by the end of this year, just at the time there is no credit and no demand. It is the perfect storm.

Read my earlier posts - I've been saying it since I started to post.

Oh, by the way: that $700,000 apartment I mention in Miami - including the cost of flooring (not included in new development in Miami) I paid $700,000 for in 1999. Because of the bankruptcy of the developer - and you'll be hearing that here, too, soon - I actually only owned the apartment for 2 months. Quite the return on a $117,000 investment, my down payment.

But now it's gone down in value 30%. And falling. Let's party like it's 1999.

stevejhx I never ever said you were stupid. Please just tell me where you posted back in 2005 and 2006.

Great move stevejhx you must of been some master house flipper in Miami.

I told you, spunky, I was not a poster back in 2005 or 2006, but I would have said the same thing as I did. And by the end of this year I will not be a poster here, either. I'm just going to do a few more victory laps.

Nope, spunkster, I didn't intend to flip it. I bought it to live there - as I've repeatedly said - and I got disgusted with the place and returned to New York. Then I had to get rid of it.

Had I intended to flip it I wouldn't have sold my place in New York. I would never buy real estate to flip.

I'm going to do some victory laps myself. Not sure what a victory lap is and for what purpose but it does sound awfully smart. After all you are the smartest person here.

Oh, spunky, you sound like a sore loser!

stevejhx not sure what in the world your talking about and although your the smartest one on this board you may want to cut down on your Prozac med to half your normal dosage

:0

Briefing.com 9:45 "These stocks are actually trading higher on the news, which in turn, is lifting the financial sector to a strong 4.1% gain. Traders are betting that the worst of the subprime mess may now be over, and were pleased to hear that the Lehman Brothers offering had higher than expected demand."

stevejhx...is the subprime crisis ending? Guys who are alot smarter than you think so. Sideline buyers are revving up their buying engines.....they don't want to wait any longer. They want to own already, They are tired of following your wrong advice. They want peace and stability and a piece of Manhattan.

steveF, we already know you're aware of the Manhattan real-estate Ponzi scheme from other threads, and will do anything to talk prices up.

What in the world do one day's stock prices have to do with Manhattan real estate?

By the way, I'm keen on the stock market. And certain that there will be a 2-year supply of apartments on the market by the end of this year, barring significant price reductions or switches to rentals, which will drive down already falling rental prices and therefore drive down prices.

Supply and demand, my friend.

there's plenty of the former, and the numbers indicate not much of the latter.

stevejhx - Miami could come back around -- altho no one can predict when any market has bottomed, it has been said by many observers over the years that just when you think things will never get better, that all hope is lost, that's usually when the market has bottomed out -- Miami has a head start on NYC by a few years

steveF - "guys who are alot smarter than you?" Aren't these the same guys who helped us get into this mess? And you're already buying into their bet that the "worst may now be over?" The stock market's been doing pretty well (relatively anyway) the last 2 weeks or so, but let's not get ridiculous.

lowery, Miami does have a head start, but unfortunately the inventory figures show a flooded market. I hate to say this, but when that $700,000 apartment I bought is worth $350,000, then I believe there will be demand. Rental prices indicate $450,000, but that would mean you need a salary of $100,000 @ 40x rent, and nobody makes that much in Miami.

And I'm serious about that, too. No one has ever seen anything like this in the past.

Stevejhx is still going on and on? Thought he had a vacation planned, finally.

oh hilarious, now the demand for nyc RE is permanently impaired. forever.

you really are the worst doom and gloom guy I think there's ever been on this board.

Im so sorry you missed the boat these last 10 years.

and you continue to lie about rates.

bjw..when you look back at any economic uncertainty the first entity to realize it is the stock market. You know why? Becasue MONEY is involved. When you look back at the "credit crisis" of 2007-2008 you will remember how Wall Street SOMEHOW got it just right. They are in the know, we and especially the MEDIA are not. The media will follow Wall Street and the consumer follows the stupid media. It's predictable human nature.

sorry..realize it has passed is the stock market

SteveF said: "Sideline buyers are revving up their buying engines.....they don't want to wait any longer."

I think you are totally wrong on this point. I'm the epitome of the sideline buyer, and my engine is comfortably idling. The sideline buyer is usually the buyer who isn't quite as wealthy and would have had to stretch especially thin, and the likelihood of price drops vs. the very low risk of increases for most properties has us waiting patiently.

I would also add that as sites like StreetEasy become more popular and buyer education grows, prospective buyers learn about buy vs. calculations and realize they are not throwing their money away by renting, in most cases they are saving, and unless prices are appreciating strongly there is no reason not to take your time and be thoughtful about your decision.

Let's think about Steve in terms of trends. He claims to make about 700k-1,000,000 depending on whether he factors in stock market gains. He also indicates he works from home, for the most part. He has not mentioned a significant other or child or ailing parent that would keep him tethered. So, I have to ask the board. If you were seriously flush with cash, were confortable with your rental and had work that was portable: would you sit almost all day and night analyzing real estate, dicing data about a market you have no intention of buying into, and generally trying to sound like the smartest person on a completely anon. board? Somthing is off. I think that something is that Steve does not have nearly as much money as he indicates, hopes the market drops so he can buy and is on a fascinating campaign to cause the change. I can't think of another reason for his behaviour.

Should have been "buy vs. rent calculations"

ten...he who hesitates is lost simple. The procrastinator for some reason never gets there. Always hemming and hawwing about this or that. Sure you are saving but your savings are getting eaten away by inflation. Unless you have the b*lls to tackle Wall Street for some real money plus hair pulling anxiety your next best investment is real estate. Slow, steady wealth producer with tax writeoffs, appreciation, principle writedown and a nice place to live in. Good Luck remember "the younger you invest the better"

Oh eah, you do make me laugh. I never said I made $1,000,000 or even close to it. I'm sitting in my office at home right now, working. These little excursions to this board make me laugh.

ccdevi, no one ever said "permanently impaired." Just impaired for a long time!

And the mortgage interest rates are the advertised rates. Go check for yourself.

"When you look back at the "credit crisis" of 2007-2008 you will remember how Wall Street SOMEHOW got it just right."

You're absolutely right. That's why they're writing all this garbage off.

But you're wrong about the stock market. It moves up and down on earnings and earnings expectations (in case you didn't know). Financial companies are only a part of that. I'm very bullish on the stock market in the long-term.

Hey guys, you're doing it again: instead of refuting what I say with real, verifiable numbers - like that 9+ months of supply we see - you attack me!

Ha-ha!

yes, steveF: "he who hesitates is lost simple." That's what everybody who rode the dot.com boom all the way to the bottom kept on saying.

Jump in!

tenemental: I actually think there are 2 kinds of sideline buyers, those with discipline like you and those who are sensible but also anxious to buy like me! I would really like to believe "slow and steady wins the race", but sometimes it is hard to believe!
SteveF: I largely agree with your sentiment....

Tenemental: I'm a sideline buyer too, and I second your post above, completely. So there are at least two "sideline buyers" who are in no hurry at all. That's enough of a trend for a front-page article in the Times real estate section, or a cover story in New York Magazine.

In the actual market, our reticence/patience may not mean anything, and I'm completely aware that small-fry like us are much more likely to be wrong than right if we try to time a market bottom. I just think it's absurd that the marketing machinery of the real estate industry keeps trying to weave stories about how eager people like us are to "own a piece of New York".

Honestly, most of us don't care that much about owning it; we're aware that ownership and tenancy each have their advantages and disadvantages. We just love New York and want to live here - as owners or renters - with a home we can afford and be proud of, and a school/neighborhood where our kids will thrive. About that much, stevejhx is right: most of us "sideline buyers" are capable of finding happiness and fulfilment in our lives, even if we never score the perfect Manhattan condo.

MMafia I hope your not paying your landlord off in those silly Gold Coins you got tucked away in the coffee cans under your landlords ratty kitchen cabinets If you are you may need to empty a few extra cans out for Gold is caving in today. I'm concern about you scraping enough gold coinage to make your rental payment. Maybe your ass kissing buddy stevejhx can help you out.

Spunky has been reduced to making trite, spiteful quips that have nothing to do with anything anyone is talking about. Really quite sad, desperate and pathetic.

Steve, I wont go back through your old thread but you did claim, at one point, that you made 700k. I am sure I could find the post.

But I am glad to see you're getting close to admitting you're just priced out.

Makes your motives clearer.

eah I said I made that last year with a 60% gain in the stock market. That's not my salary, and I don't expect to make it this year, unless I do.

I'm not priced out of the market at all. I could certainly buy something. But why would someone buy a studio when he can rent a 2-bedroom for the exact same price? Why would he buy a 2-bedroom when he can rent a 4-bedroom for the same price?

For no reason.

Perhaps you could give us your opinion of the current 9+ month supply overhang in Manhattan. It will all be cleared out, I'm sure, by eager Wall Street bonuses, who will make so much money that they'll be buying entire buildings, right?

I think Steve's motives became clear after his fifth message on this site. The only reason one would spend hours per day furiously crafting the volume of messages he has is because of a fundamental dissatisfaction with their situation and a burning desire to see things change to their advantage. What is disturbing is that I think he truly believes that the more he spams his doom and gloom message on these forums the more likely it is that he will influence the market.

He reminds me of a short seller getting squeezed.

Again cranky, twin brother of spunky, give us the raw data....

We're waiting!

Tee-hee-hee.

iMom and stevejhx are twins as well. Both joined at the head and enthusiastically negative about Manhattan Real Estate.

Steve I never disputed your calculations of rent vs buy although I do believe you are spreading misinformation about the state of the mortgage market, as multiple others here have also said.

I simply commented that the obsessive way that you take every opportunity you can, in every possible thread, to write a monograph with the same information is indicative of a burning and desperate desire to influence the market to your advantage.

Well I am off on Vacation as well----- tootaloo

cranky, you've got to be kidding! Little old me influencing the decisions of over 8 million New Yorkers just by posting on this board? When steveF says they're a lot smarter than I am, too?

I'd have better luck standing in Herald Square with a megaphone.

Spunk, I'll be watching out for your posts on other threads ... because I'll miss you!

"Spunky has been reduced to making trite, spiteful quips that have nothing to do with anything anyone is talking about. Really quite sad, desperate and pathetic."

BWAAHAHAHAHAHA!!!!! So true.

And of course, spunky can't get through his thick skull what I've been telling him all along, so many times in so many other threads. Sell a portion on price spikes, accumulate more on dips. If you are a day-trader, this won't work. But of course, we are not day-traders here (at least, I'm not).

If you follow that mantra, you would have sold some Gold positions when it breached $1000, and you would be accumulating more shares now as it has pulled back temporarily.

The Gold market is highly manipulated by the Central Banks as they try to keep its price down. There are also many Funds that are cashing out on gains on Gold (as its one of the few thing making the Fund money) to bolster their cash flow and ability to meet margin calls. These represent great accumulation opportunities.

But ENOUGH of Gold. This board is about the NYC real estate market, and now that the DATA is showing what we have been telling you will happen, stop trying to change the subject to something else and refocus back on NYC real estate, which according to you will NOT go down and NOW is as GOOD a time as any to BUY, right?

OR are you willing to change your stance on that in the face of data staring at your face and end the denial phase, only to begin the fear phase?

I said influencing was your desire, not that it would happen.

Otherwise, why do it?

khd, I thought of you as I was posting. I know I can't possibly speak for all sideline buyers, but I do think a line like "Sideline buyers are revving up their buying engines.....they don't want to wait any longer" is, well, silly.

SteveF, I don't think procrastination is the right term. Being patient and thoughtful regarding the most important purchase of my life isn't procrastinating. As for my "investments," you're right, thanks to recent Fed cuts my "high yield" savings isn't so high yield, but I save money every month rent vs. buy, and my 3.5% apr is much better than a declining real estate purchase.

West81st, that was a great post, but just to be clear, I don't expect to pick the perfect bottom quarter, as I've said on other threads. I've simply seen negotiability in my part of the market improve considerably since late 2007, and the direction the market's moving in gives me confidence it'll keep getting better for me over the next 6-18 months. I can and will buy, but as you said, I'm enjoying my life in NYC from my rental, and I will buy when the unit and price are right for me, and it won't require a collapse of the market.

cranky and everyone else — hopefully if stevejhx's rants are not responded to (encouraged), he'll dry out on his own. Let those hyperventilating imoms and steves vent away. Otherwise, all these boards lose interest the minute they hijack them.

Steve, I think I've been pretty clear that I also expect prices to drop. That's what I expect to happen to the overhang. However, I do not see price drop as a bad event and, once again, am wondering where you believe we disagree? The only difference I see is in investment strategy - I buy regulalry whilst you seem to want to time it perfectly.

You're on the shady side of 40. Get off the sidelines. I hope for your sake the market does drop and you buy.

cranky, to annoy you!

inquirer, hijack a thread on the bloomberg article by talking about the bloomberg article? LOL! Hijacking seems to you to mean anyone who takes a realistic view of the market based on raw numbers, not "well it's gone up in the past so it must go up in the future."

In fact, the more things have gone up in the past, the less likely they are to go up in the future.

tenemental, the only revving engines I hear right now are a garbage truck. And I agree that a collapse of the market isn't necessary to buy, it's just inevitable that it will happen.

I think a price drop would be a grand thing, but what does my age have to do with buying? Except that if I overpay, I'm stuck with it till I retire in 20 years. Wait...19 years now.

You age has everything to do with buying. If you had bought at 30, you'd be sitting here, looking at the numbers with mild interest, and a lot of money and equity in the bank. Yes, yes, Steve, I know..you HAVE a lot of money in the bank. But, you still rent and at your age/income level that is kind of sad.

eah, why DO you judge? In fact, had I purchased when I was 30 I'd still be living in London, so that wouldn't work, would it?

Renting in Manhattan allows me to enjoy the benefits of a vacation home which I own and could not otherwise afford at these ridiculous purchase prices. I'll buy again when they become sane. And given my thus-far luck in the stock market, maybe I will in fact purchase in cash. Or if I go back to the financial services industry, perhaps I'll get a big fat bonus and buy myself a skyscraper. :0

Residential real estate never made anybody any wealthier they wouldn't have otherwise become, in the long-term.

Statistically proven.

In fact, it makes them poorer.

Dear God Steve--if you had purchased in London at 30, you'd be in even better shape.
Ownership makes one poorer. Huh. OK. Makes total sense to me!

I jusdge because I think most of your tone comes from the fact that you're staring down 50 in a rental.

Fact remains..if you had purchaes in London or NYC 18 years ago you'd see this in a very different light.
But, you didn't and now you're forced to blog about how smart you are to rent. Talk about reverse engineering.

I just dont get it - why is staying in a rented place sad? it's so very liberating. no ball-n-chain of mortgage payment. no turning down better jobs in a different city if your house is underwater. ability to explore expat life in foreign country without worrying about real estate market. can take a year off and travel around the world without having to worry about renting or mortgage payments.

eah, i think buying and missing out on life's opportunities because you owe more on your house than its worth is so much sadder! the only thing even sadder than that is having to move to your parents basement because you cant make your newly adjusted mortgage payment!!

I'll take renting any day!

"But, you still rent and at your age/income level that is kind of sad."

Typical judgemental comment from an owner. Clearly insinuating that owners > renters.

Wow, wasn't that like, soooo 2 years ago????

Sorry, but those kinds of judgemental comments perpetuates some of the negative stereotypes of owners.

eah, "forced to blog"? I'm not forced.

You see, my psychic told me that I was going to be famous and move to Los Angeles, so I decided to take her advice and rent. Then she died. Guess she didn't see that one coming.

All seriousness aside, I may very well retire to Palm Springs. I'm going to check it out next weekend. So why would I want to buy now in NYC if in 10 years I decide to move to Palm Springs. All I'll have done is paid a lot in interest, virtually no principal, get stuck with an investment worth no more than it is today (the last boom took 10 years to recover from) that I might not be able to sell, since I don't know what the market will be like then.

Most of the world doesn't own real estate, eah. Maybe that's why.

steve, you did not use the words "permanently impaired" but you did say "Never again will there be such demand for real estate, driven by so much leverage. Ever." I took that to be a permanent impairment.

As for rates, the absurdity of going by advertised rates is just unbelievable, it colors every other word you say on these boards. Its just a fiction and you know it and you use that fictional data to further your agenda.

"no turning down better jobs in a different city if your house is underwater. ability to explore expat life in foreign country without worrying about real estate market. can take a year off and travel around the world without having to worry about renting or mortgage payments."

cartman, that's all very nice and if that's you great, I'm glad you feel free and renting is for you.

what % of the population do you think those things affect. A large majority of people in nyc have no wish to move to a different city for a better job or otherwise, no interest or no ability in exploring expat life and no ability to take a year off. And when I say no ability twice in that sentence, I don't mean because of the "ball and chain" of mortgage payments but rather because of things like ya know kids, family, jobs, etc.

ccdevi, I'm not arguing with you about advertised rates except to say that it would be illegal to advertise rates that were wrong. I do not use any fictional data; show me data that diverge from what I've published. They don't exist.

eric, how is renting any more flexible than owning? Most of the NYers I know that rent here feel the same pressure to hold their rentals when they do all the things you mentioned (travel/take a job elsewhere) that owners do. Primarily because they're terrified of losing their rent rate and having a market rate when they return. In fact, I think renters feel more pressure because each year their landlord is more and more eager to get them out. When my renters travel they always come to my property manager with a plan and want assurance their place will be there when they return. So, where this foot loose attitude comes from, I have no idea. Unless you rent in Ohio or somewhere where rents stay stable year after year. The fact that you think that buying precludes opportunities in life pegs you at a very specific income level...I suggest you stay renting.

Most of the world doesn't own real estate Steve. This is true buddy. But most of the world also has unclean drinking water and exists on a dollar a day and so on.

MMAfia, owners have stereotypes? Just with renters.

"Residential real estate never made anybody any wealthier they wouldn't have otherwise become, in the long-term.

Statistically proven.

In fact, it makes them poorer."

Stevejhx - how do you interpret the Federal Reserve's survey which compares the net worth of owners and renters. Seems to me like owners come out way ahead. I've read elsewhere it's partially chalked up to forced savings.

www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf
(table on page 8)

wyndcliff, the net worth of owners and renters proves one thing: that owners are wealthier. It doesn't prove that owning property made the wealthier, merely that they are. And they would have to be, since they would need to put down a down payment.

You really have to think about the obvious.

"But most of the world also has unclean drinking water and exists on a dollar a day and so on."

Actually, as a percentage, about 4x more people own property in Spain than they do in Switzerland, on a percentage basis. The Swiss have cleaner water.

Is it obvious? You said above, owning makes people poorer, that it's statistically proven. Yet, more wealthy people own.

thank God wyndcliff isn't involved with the sciences or making drugs for the sick... clearly has no understanding of correlation and cause/effect when it comes to data. we'd have medicine that would make you sicker with that kind of shallow analysis.

actually, wyndcliff should work for the NAR under that moron Yun. SPIN SPIN SPIN up up and away!!!