What are your predictions for 2009?

And finally,

8. Julia admits that prices are down

9. Rufus realizes that Chicago is a dump and moves back to NYC

10. Either Morgan Stanley or Goldman Sachs is acquired through a merer or acquisition

1) Inventory will hit 11,000 by 3/31/08. 14,000 by 12/31/09.

2) Conforming mortgages hit 5% due to govt intervention. Jumbos stay where they are or go higher in anticipation of higher inflation that hits in 2-4 years due to ridiculously low fed rates.

3) Rents decrease 10-20% (I live in tribeca doorman building and the rents in my building have already decreased 5% vs 6 months ago and they're offering one month free - so effectively 13% decline).

4) Prices drop 50% from peak - so another 30% if prices have already dropped 20% from peak.

5) Unemployment hits 10%.

6) Stock indices drop 20-25% from current levels once Q4 2008 and Q1 2009 financials are disclosed - it's much worse than the consensus thinks.

7) The economy starts to recover in 2H 2010 but not quickly.

"3. Rents INCREASE as the number of sales fall"

Rents will DECREASE as the number of new development condos that can't be sold skyrockets, and buildings are converted. 1,300 new units in Silver Tower alone, on the Far West Side.

Rents are already collapsing before that, though.

"6) Stock indices drop 20-25% from current levels"

Stock indices rise to Dow 11,000 as the effects of the write-downs wear off, and all the new liquidity added into the economy takes hold.

I will freely admit that I have no idea what will happen in 2009, but I will pose a question:

When looking for a rental, I called a bunch of buildings from Gabriel's Guide, which used to be the bible for no-fee rentals. They stopped publishing it a few years ago, so I was using a 2005 edition, printed in 2004. I was shocked how many of those formerly rental buildings had been converted to condos, ostensibly all in the last 3-4 years. I didn't do a scientific study, but it seemed like easily 20-30% of the total.

What effect might this have on RE market? Rental market?

Steve - I agree with most of your posts but I disagree with your view that the indices will bounce back - I think most people will be shocked at how many public companies go bankrupt over the next year. If they don't go bankrupt their cost of (debt) capital is going to increase by 50%+ as they deal with covenants and maturities, crushing free cash flow and restricting future growth.

NYC, I don't think stocks will recover to last year's levels, but I think they'll recover to pre-Lehman, which is back to a standard bear market, 20% down from peak. Not 55%.

Don't forget that stocks fell 40% in 3 weeks, and they are vastly oversold by any measure, including diminished forward p/e's.

Once we get over the Rick Warren slap in the face, when Obama takes over in a few weeks there will be a huge change in policy. Conforming mortgages are down to 4.5% in some places. Money is free, and there's lots of it. It will start to trickle down shortly.

1. S&P 500 rallies to over 1100 (20%+) as business conditions begin modest recovery beginnning in summer months as a result of the massive stimulus program currently underway. Emerging market stocks score 30%+ total return gains due to their current very depressed levels and expectations that the emerging markets offer good long term growth while developed markets will remain lethargic. (Eventually, they will be the next bubble.)

2. Long government bonds - today's bubble - head south due to inflation worries and massive government borrowing. Intermediate-term investment-grade corporates score 15% total return as spreads tighten from current record levels.

3. New York City real estate inventory continues to rise and hits 12,000 by March, 2009 and 15,000 by June, 2009. Prices continue to fall through the year and by December are off 30% from peak 2008 price per square foot Manhattan Samuel Miller coop/condo levels. Transaction volume remains very light throughout the year. Price cuts on new construction becomes increasingly widespread as builders come under increasing pressure from bankers to pay off loans.

4. Commodity prices bottom out and begin very gradual recovery - but don't score really big gains until 2010 as the current ZIRP (zero interest rate policy) begins to jump start world economies and inflation worries reappear.

Oops...penultimate paragraph should read "Miller Samuel..."

Topper, I fully agree except I think prices will be 50% down by EOY 2009 b/c of the effects of future Wall Street layoffs, principally Merrill Lynch and WaMu.

Oil at a more reasonable $60 a barrel.

Unemployment in NYC 10%.

NYS / NYC will attempt to raise taxes on the rich people who no longer live or work here.

Someone, someday will have to take hard decisions, decide that cops don't deserve $57,000 a year tax-free pensions after 20 years, kindergarten teachers don't deserve "tenure," and Medicaid is unaffordable at these levels.

That, though, will require taking on the state and municipal unions, but if it doesn't happen, we'll be right back to the 70's.

I'm also predicting that we will see lots of condos in foreclosure, perhaps even some new ones that were bought as get rich quick flips.

Alpine, you mean like the Caledonia?

I think we will see lots of condo foreclosures downtown in FiDi.

FiDi = Suicide Canyon.

No sales in BPC either, because of the ground lease. Ground lease = no mortgage.

"Someone, someday will have to take hard decisions, decide that cops don't deserve $57,000 a year tax-free pensions after 20 years, kindergarten teachers don't deserve "tenure," and Medicaid is unaffordable at these levels."
Steve, you're thinking too logically & reasonably

"That, though, will require taking on the state and municipal unions, but if it doesn't happen, we'll be right back to the 70's."
Now you're being realistic

kindergarten teachers have tenure!?! AARRGGG! Our tax $ at work!!! The crap we pay for is unreal.

i hope everyone is correct regarding lower prices.

I think that city & state employees deserve good, competitive salaries. But their fringe benefits are outrageous.

Medicaid exists in New York to keep people employed. California has twice as many people on Medicaid, spends half as much.

New York spends more on health care and education than any other state, and has less to show for it.

Paterson's budget calls for 512 layoffs out of 200,000 employees. They closed the New York State pheasant farms.

Yes. The state had pheasant farms.

Bitter renters will stay bitter renters, because their decision is not financial, but emotional.

Well, Steve, I hope you're correct about 50% by YE 2009.

I think 50% is a reasonable target, but I think things will take longer to play out. Lots more denial to come - and "I'll just wait this out." So I think that 50% figure is more likely by YE 2010.

stevejhx
about 3 hours ago
ignore this person FiDi = Suicide Canyon.

You are TRULY a REPUGNANT Human Being. Repugnant. I don't know how you can possibly get along in society with attitudes and statements like that. You are unbelievable and repugnant.

VideoVault: How do you really feel about Steve?

Property value will continue to decline
Rent will decline
More supply (inventory)
Less demand
Too many foreclosures
Jobs losses in record numbers
Unemployment will not cover those after 9 months of unemployment and unemployment will skyrocket. The city will see two huge layoffs next year
More crime in the city
Mayor Gloombird will lose the mayoral election
A M-ASS LOL exodus out of NYC
The amenities at these luxury building will be obsolete.
A lot of low income people will move on up to the east side
MTA will be a mess
Luxury condos will ask for a gov't bail out
Bernard Madoff will do 6 months in a country club prison
The Domino Sugar Factory and the Atlantic Yard ground will be broken to begin construction
President Obama will be the best president of the USA yes we can Mr. Black President
Barbara "Bob" Corcorcan and I will continue to say buy now or be priced out forever in NYC, now is the time to buy in NYC and go to that sale opps rent office and catch that falling knife for sale opps rent.
I pray that NYC will be safe all jokes aside.

nyc10022 what do you think?

1. Manhattan down 20% more. The smart money sells as prices won't stabilize for another few years.
2. Rents decrease even more which increases the price to rent ratio. Techie continues to spout his nonsense that buying 5% off the peak of a bubble was an awesome idea.
3. Treasuries rallies, dollar rallies, Yen rallies, 1 or more BRIC currencies crash, the Pound crashes, the Euro looks weak
4. Monetary/credit deflation results in 2-3% contraction in the CPI.
5. Stocks take a huge hit in Q2 after even the CNBC pundits stop talking about a recovery in 2H 2009.
6. Unemployment hits 9% in Q4
7. Taxes (especially real estate) increase as NYC fiscal problem get much worse.

I believe he is repugnant. This isn't about him being a sad personality or grumpy or attention-seeking or whatever else annoying characteristic that he and many others have to some degree or another, but he is talking about people committing suicide and that is repugnant and really represents an absolute low on the order of being a serial murderer or rapist. Repugnant.

1) Manhattan real estate takes a big hit on both the rental and sales side as prices for each go down dramatically and inventories rise to alarming proportions.
2) Erosion in quality of life in Manhattan becomes noticeable, leading to the beginning of prices stabilizing for medium to high end homes in the suburbs (e.g. Long Island, Conn. Bergen County).
3) Beginning in Q1 money will start to flow into muni, corporate bonds and some MBS' narrowing the spreads.
4) Beginning in Q2 money will start to flow back into equities leading to a rally around 11k.
5) Unemployment will continue to increase through Q4 where it will top out at around 9.5%
6) National Housing market will show first signs of beginning to stabilize after 2009.
7) Manhattan will still have a solid tourist industry as our dollar remains somewhat weak, and Obama re-brands the USA as "sophisticated and progressive" and Manhattan becomes rebranded again as "Bohemian" or "Artistic."
8)Commercial real estate in Manhattan nosedives as many companies either abandon, or dramatically reduce presence in Manhattan.

jgr, you think rape, murder and suicide are funny? you are really low.

"their decision is not financial, but emotional"

That would be stupid - but that's what bubbles are.

"You are TRULY a REPUGNANT Human Being."

Thank you. It means a lot coming from someone I don't know or care about.

I agree with mh23's first 6 predictions, though the timing business is difficult. Equities should return to pre-Lehman (normal bear) market levels, though at this point, since with all the actions by the government we're seeing a bottom form, I'd rather get in early than wait, as the rise in the markets back to more appropriate levels should be rapid.

What the other 4 boroughs, the state, and the federal government are going to have to get used to is they can't bleed Manhattan for tax money anymore. That's especially true for the rest of the city & the state. Downstate, including Manhattan, is in for a downturn worse than anything we've ever seen. We got drunk on the excesses of Wall Street, to the point that it imploded and has basically disappeared.

Moved to Charlotte.

You are repugnant and ought to be chased out of this town. Encouraging suicide is beyond low. You should really do some serious introspection.

"Encouraging suicide is beyond low."

Now I'm encouraging it?

Read the dictionary: "suicide: a course of action which is disastrously damaging to one's own interests."

What did you think I meant?

Steve has been the most insightful, and accurate, blogger on this site. You, VV are out of line. Steve has contributed forecasts and insight to this site, all you do is repeat the word "repugnant" like the Little Rascals episode where the kid keeps saying "Remarkable".

Where's spunky?

oh ok, encourage people to kill themselves all you want. you too mh23

Where's spunky?

Oh, come on. This is just silliness.

why is suicide silly? The talk is repugnant.

"FiDi = Suicide Canyon. No sales in BPC either, because of the ground lease. Ground lease = no mortgage."

That's what I said.

Literally, within the context of real estate. It is suicide to buy real estate in FiDi. If you think it means jumping off buildings, then so be it. But if you do, you're really, really odd.

Now, where's spunky?

VV, you're being too literal. Steve is an insightful and interesting contributor to the board. Knock it off.

stevejhx is the biggest underachiever on this site. Claims to have 2 undergrad degrees from 2 different universities and yet is an UNEMPLOYED translator. If he were so insightful, do you think he would be giving his opinion for free on SE 24/7? No. He doesn't have what it takes in the real world, so he has created his fantasy world online where he envisions himself as the all knowing, all powerful. But if he really were, he would be charging you $500/hr for his advise.

mh23, I would be surprised at your praise of him. He has been crying for over 2 yrs that RE would fall. That doesn't make him insightful. That just makes him the same negative, bitter lonely old man he has become. I will start saying the economy is getting stronger now so that in 2 years when it finally does, you can give me that same "praise and insightfulness."

Be wary of your sources.

Where is the insight into suggesting a whole area of Manhattan is where people should commit suicide? And if that isn't what he meant, he could have stated that his words were inappropriate and clarified. But he's continued with his repugnant attitude and stands by his pathetic anti-human language.

No, e2, I have 1 undergraduate degree from George Washington University (Economics) and 1 graduate degree from Columbia University (Spanish).

The rest of the comments, by you and VV, are just to inane to warrant further comment.

to inane = too inane.

b/c the truth hurts. you are a small man in a big world.

P.S. all this talk of unemployment trends as of late by you.... do you include yourself in those unemployment numbers?

"He has been crying for over 2 yrs that RE would fall."

Wait! This is worthy of comment, as well: I think my first post here was in January 2008. Not two years.

At the time - besides being pilloried by all and sundry (where's spunky?!) - I said that property prices would fall by 50% from their (then) peak levels, because they were out-of-line with comparable market-rate rentals. They've fallen about 15% - 20% since then, and they continue to fall.

I'd look for a temporary rally, the highest the dow reaches in 2009 is 9,500, and the low will be 4,900 or around that level.

It is impossible for Obama, the Fed, and everyone else to overcome 25 years of credit expansion, the largest T-bill bubble ever in the history, on top of scary, astonishing deficits to think that we'll re-emerge within 1 years.

2009 will be the heart of the crisis, where the pain will be far more severe than 2008. It is not until the year 2010-2011 that we see some light but it will still feel like recession/depression as growth will be 1% level for years.

I agree with emerging markets, they'll likely be flat +/- 10% in 2009. But U.S. and UK have no way of not entering the Very Great Depression that will emerge in Q3 of 2009 as unemployment spikes.

If anyone wants to place a bet i'm calling Dow 5,500 within 6 months.

I am embarassed for you, that you continue to defend yourself and continue to be so repugnant.

"do you include yourself in those unemployment numbers?"

Because I own my own company I pay unemployment insurance but cannot receive benefits.

I don't comment on ad-hominem remarks.

Real estate in Manhattan will fall greatly over the next 2 years. Ask a broker at Corcoran how the market is today. They'll tell you off the record that it's "HORRIBLE", worse ever. The problem is if 2008 is bad, then 2009 will be a "NIGHTMARE".

People, analysts, commentators are completely delusional to this crisis. Deep in the heart of Bernanke and Paulson they know that this is the mother of all storms, they're trying to have a long contracted 10 yearish recession rather than just letting the house of cards directly collapse.

The problem is that foreigners may run out of patience soon. I would not be surprised if someone in the summer of 2009 pulls the plug on Tbills, or just stops buying them flat out.

Also the U.S. triple AAA credit rating in on the line. Imagine waking up and finding out that AAA rating is gone, that'd criple Manhattan Real estate further as foreigners, who have helped prop up this market the last decade would run run run...

counciler, if your prediction comes true it will be worse than 1929. It is not worse than 1929. Indeed, it didn't even have to get this bad except for the Lehman fiasco.

There is too much money being pumped into the economy for that to happen. We got into this mess because the idiots in charge failed to learn the #1 lesson from the Great Depression: never let a bank go bankrupt. The result was that the credit markets froze, and the world's economy just stopped. It will take a lot to get it going again, but the new kids on the block are far smarter than the old ones. Too bad we can't get rid of Benjamin Bernake.

U.S. markets should follow Chinese markets. Down 75% or so from peak. This is a solid indicator.

Agreed on real estate, but foreigners will not stop buying treasuries because they can't. If the Chinese (the principal owners) did that, it would cause their primary export market to collapse, when that's exactly what they don't want to happen.

stevejhx, completely disagree. this crisis is indeed worse than 1929. The U.S. did not have the sort of debt we have today in 1929. U.S. in 1929 is like China in 2008, direct collapse but eventual recovery to join superpower status. we are not as fortunate this time.

best thing would be just to declare bankruptcy and start over.

additionally, Bernanke and the Fed cannot comprehend the effect of a potential currency or CDS default crisis.

In this event, DOW 2-3K cannot be ruled out. Japan, even as creditor nation saw it's Nikkei drop 80% from it's high. Dow 5000 for years and years is not ruled out as U.S. consumption levels will decline over the next decade and our people focus more on savings.

Dow 5K until 2020 is of good possibility. it's called L-shaped economics.

or what some refer to as "the lost decade"

I'm also pondering the bull case for convertible bonds. They've been pretty badly beaten up this year as the convertible arbitrage hedge funds have faced big redemptions. Perhaps a bit early, but you get a nice yield while you wait.

counciler, that would lead to an international revolution. Won't happen. Can't happen. Thanks to Keynes we understand the evilness of deflation.

Here's a very simple reason why: the money the Fed is currently "printing" it's not really printing. It's either selling debt or buying assets. That liquifies the economy, but there is another way to battle deflation, the Latin American way: simply deposit money in banks without issuing debt or buying assets.

The Fed has yet to do that, but it's the fastest way in the world to create inflation. It's wise that they haven't done it, but they can. It has a very different effect than borrowing from one party to lend to another. It's just printing money.

"the bull case for convertible bonds"

I'd be leery - any government investment would be senior to those bonds.

Japan took record actions to stop insolvent banks and companies from failing and look what happened to them:

1) Nikkei still only 25% of its peak
2) Residential real estate that still has not reached its 1990 peak in urban centers
3) Commercial real estate that will never ever reach its 1990 peak
4) 10 years of deflation and soon more years of deflation

The money that the Fed is printing is going into paying off debts and being recycled into Government securities. It's not making its way into the money supply because to do so would open the banks up more defaults.

the money the fed is printing is going into bank reserves, being hoarded, to recapitalize balance sheets of technically insolvent banking institutions. Look at chart of monetary base and look at chart of reserves at depository institutions. We are in the REPAIR BANKS phase so that we dont become Japan. Japan is what the fed is avoiding, a lost decade, and if banks come out with writedowns for another 5-6 years, that is what it will be. This is what the fes is trying to avoid right now. Its not all reaching the system, unless the fed starts buying assets and treasuries directly from primary dealers

Three differences with Japan:

1) It is not a consumer-led economy. It is a producer-led economy. Huge difference.

2) ZIRP in Japan did not lead to an increase in the money supply. That's why the Fed is re-liquifying.

3) Banks were not forced to write down their bad assets. That's why we implemented mark-to-market.

The Fed is going to drive the interest rates for buying treasuries to below zero, making it too expensive to keep money safe. That's the next phase of their strategy

they already said that Steve; its known by the markets and being priced in.

the next phase is going to be to rid the big banks of the toxic portions of their balance sheets, in my opinion. Not just allow these assets to be used for one of feds lending facilities. I think a TARP 2 or a RTC like structure will be formed to take on the transfer of toxic rmbs, cmbs, cdos, etc.. from the big banks (and their merged partners) to this new entity.

FIRST - recapitalize, since the banks have exhausted their other means of re-capitalizing. TARP round 1 used so far, and in my opinion, TARP round two will be used again for same community reason with general injection to entire group minus say 50-100Bln for unexpected needs

SECOND - set the system up so the banks can make money and private sctor interest in riskier assets with higher yields than ultra safe treasuries

THIRD - transfer junk assets from banks to either fed or separate entity (TARP 2 or RTC like structure)

So, this is the model I think makes most sense for the recapaitalization phase of this credit crisis. I nevered compared us exactly to Japan. Just that fed is in REPAIR BANKS mode, and it likely has multiple phases, and that a lost decade due to troubled banks for 5-6 years is what they need to avoid. Get it out now, in a orderly fashion, provide liquidity to all other debt markets, and cushion the blow to real economy as the process plays out...

"1) It is not a consumer-led economy. It is a producer-led economy. Huge difference."

OK. But I'm not sure how that changes the deflation picture in 2009. If anything it makes it worse as unemployment increases and wage freezes become more common place. Japan also had savings to cushion the blow, Americans are tapped out.

"2) ZIRP in Japan did not lead to an increase in the money supply. That's why the Fed is re-liquifying."

I agree. It did nothing to combat deflation. Just as the Fed "re-liquifying" will do nothing to combat deflation. We reached Peak Credit in late 2007 and even with a flood of new printing from the Fed, credit is being defaulted upon and being retracted at a much greater rate. Excess capital the banks have is going directly into treasuries and other safe investments. Any further lending by the banks to consumers or corporations will just lead to more defaults and more writedowns.

"3) Banks were not forced to write down their bad assets. That's why we implemented mark-to-market."

For all the banks have written down, I would argue there is a lot more to come. There's a lot of bullshit that is being hidden in L-3 assets and financial engineering.

" The Fed is going to drive the interest rates for buying treasuries to below zero, making it too expensive to keep money safe. That's the next phase of their strategy"

agreed except Quantitative Easing was tried in Japan and it failed.

jgr - that's correct. Neither a ZIRP policy not massive quantitative easing had a significant inflationary impact on the Japanese economy, except that it probably helped to offset (to some degree) huge deflationary pressures. When lenders won't end or borrowers won't borrow, monetary policy has little impact. In other words, you can't push on a string. I firmly believe that while we're in a "lenders won't lend" moment now, we will soon be in a "borrowers won't borrow" situation. The vast majority of borrowers will be (1) cash hoarders or (2) refinancings, neither of which adds to growth nor inflation.

Many economists argue that it was actually Japan's aggressive fiscal policy that worked to ultimately forestall deflation, and when Obama says that all of the economists he's consulted are pushing for aggressive fiscal spending, Japan is EXACTLY where that lesson comes from.

Monetary policy / quantitative easing won't get the job done, in my opinion. It simply won't be enough.

Here's another fun observation - if someone told you tonight that the Fed was going to cut the Fed Funds rate by 450 bps tomorrow, what would you do? My guess is you'd buy gold with every last dollar you have, expecting the most extreme inflationary reaction to an unprecedented monetary stimulus. Well, that's exactly what the Fed has done since October 2007. And gold is basically where it was back then.

sorry, should be "Neither a ZIRP policy nor massive quantitative easing"

"Well, that's exactly what the Fed has done since October 2007. And gold is basically where it was back then"

yes, but we went through massive periods of deleveraging and equities are down 40% and some commodities down up to 65%! Relatively speaking, that performace is excellent considering the 'sell everything no matter the price or the asset to raise cash' perios we have been through so far...telling!!

in other words, you would have NOT lost a lot of money! Capital preservation

I hope we don't become another Japan. That would suck!

stop the attacks...it doesn't add to the dialogue

"Many economists argue that it was actually Japan's aggressive fiscal policy that worked to ultimately forestall deflation, and when Obama says that all of the economists he's consulted are pushing for aggressive fiscal spending, Japan is EXACTLY where that lesson comes from."

I don't agree with this statement, but perhaps thats because I don't subscribe to Keynesian theory that most economists are in love with.

Japan had numerous attempts at large fiscal stimulus packages - lots of bridges to nowhere that did nothing but throw away good money. The problem with Government fiscal stimulus is that it's never a very efficient use of money. It gets bogged down in politics (paying union wages, building in rep X's district) and take far too long to be effective. Obama is talking about a massive infrastructure project, but it will be 2011 before any of the money from that project can get into worker's hand. He also wants a second "stimulus" package to put money into middle and working class hands. That's just shifting money from the rich to the poor - not creating new wealth.

"I believe he is repugnant. ...he is talking about people committing suicide and that is repugnant and really represents an absolute low on the order of being a serial murderer or rapist. Repugnant."

BWAHAHAHAHA!! You said the same thing about me, you stupid old fool! You didn't like my comment about the nazi-like behavior of certain dogmatic realtors ("Buy!Buy!Buy!"). You resented the comparison. But now YOU say someone is "on the order of being a serial murderer or rapist". You pointed out that realtors didn't actually kill anyone. Well, Steve doesn't actually kill or rape. You are a COMPLETE fool and a hypocrite.

"Stock indices rise to Dow 11,000 as the effects of the write-downs wear off, and all the new liquidity added into the economy takes hold."

Uh oh.... did Steve just give up on his "definitive" dow to 6500 prediction?

Does this mean the bear market rally is over, and time for us to duck for cover?

Isn't Steve the person who lost all his money this year? He saved it all by renting and not buying, and then lost it all in brazil, china, india and double long financials. Great person to take advice from, he doesn't even have a job!

"you would have NOT lost a lot of money! Capital preservation"

I don't disagree with that at all. Relative to stocks, of course gold was a better investment. My point relates to the effect of aggressive monetary policy, where you would look at the performance of gold relative to CASH - i.e., the dollar. Who cares how gold performed against other asset classes? Wrong comparison.

gotcha

Never wrestle with a pig - you get dirty and the pig likes it.

Hey Eunich - Steve does have a job as a translator. You may or may not like that job, but people pay him money for his services. (That is, I believe, the definition of a "job"!)

Steve also correctly predicted the real estate crash when shills like yourself could only say "BUY! BUY! BUY!". So, on the whole, I'd have to agree with jgr.

Isn't Steve a freelancer, not employed with a steady paycheck? That is pretty risky in the marketplace, certainly understandable not to want to commit toownership in good or bad market.

Back to the topic of predictions:

I have many similar to ones above:

1. Inventory hits 10,000 - 13,000
2. Mortgage rates hit 4%
3. Rents continue to fall
4. Gov. Patterson never saw a tax he didn't like (pun inteneded)
5. A terrorist attack on U.S. soil
6. Prices drop 40% in 2009 (and another 25-40% before its all over in 2011).

In addition, I have a few more:

1. An enormous back-lash against the real estate industry - realtors, mortgage brokers, etc - takes root.
2. A large regulatory and legislative response against the real estate industry occurs, sort of what Sarbanes-Oxley was to the accounting scandals of a decade ago.
3. Several prominent real estate brokerage and mortgage brokerage industry executives occupy prison cells next to WorldCom and Enron executives.
4. The word "realt-whore" enters the public lexicon in much the same way "hoover-ville" became 1930's slang. Realtors are despised world-over. Sons are disowned from good famililes for marrying former realtors. Signs appear in store-front windows that say "No dogs or realtors".
5: The MLS and similar tools are declared "public goods", brokerage commissions are capped at 1% for either side of the sale. FSBO sales outnumber brokered sales when people realize they can do most of this work themselves.
6. Their so-called profession in shambles, former realt-whores are forced to do something they DESPISE doing: Showing up at work at 9am and following other people's instructions, like the rest of us.
7. With little in the way of "skills" except a phony smile and large breasts, many realtors live a meal-skipping existence as secretaries and escorts.

Dude, your mom must have not loved you or something.

But it is interesting, #6 really shows your jealousy.

In any case, good luck going through day after day being so angry at the world.

And not that my occupation changes your serious issues, but I'm not in the real estate industry in any way nor is my family.

Vandalay: LOL. #6 doesn't show my "issues", it shows my biases: I grew up in a family of people who really valued industry, who valued WORK. And realtors are some of the laziest people on earth! The reason I know this is that they tell me so. Some people I spot as realtors for obvious reasons - they are unintelligent, vacuous, soulless people who could do little else but leach off of the transactions of others. But the occasional realtor who struck me as somewhat bright or charming, I would typically ask "So why did you become a realtor instead of, say, going to law school?". The answers, uniformly, were:

1) Too much studying, too much work.
2) Want to make my own hours. Not a morning person. Don't want to be in by 9AM.
3) Don't like having to follow other peoples instructions.

In other words, sloth.

You are right, we needed more lawyers.

Wot is you bangin' on about, Vandalay?

alot more layoffs on wall street...that's 2009. on a daily basis ny will have far more tourists than bankers come q3. how times and cities change...

Their so-called profession in shambles, former realt-whores are forced to do something they DESPISE doing: Showing up at work at 9am and following other people's instructions, like the rest of us.

WAIT, Admiral....I thought you were the principle of your firm??? If so, then why do you have to follow other people's instructions? Don't you also have MANY "professional degrees", as you called them? HA!
Also, I don't know anyone that starts work as late as 9am anymore.
Admiral...this just proves the point that you are an unemployed (hence all the time to write pages and pages of posts) liar! You are on this site to simply throw around insults to other people who are simply posting their opinion (what blogs do), but if someone disagrees with you..well then they are, well I am not going to get into the things you have been calling me.

I think as a group we should all not respond to any of Admiral's posts so he can get off his parents computer and get back out there and look for a job.

Sorry Admiral, you are too rude to be in real estate...so skip over those ones.

"realt-whores"

LMAO.

Ignore the personal attacks, I do. But just to set the record straight:

I am a freelance translator with my own company, I've been doing it for 16 years now so I guess I must know what I'm doing.

I did NOT lose all my money on the stock market, was never invested in India, and I've never been double-long on the financials. I bailed out of Brazil 50% ago. I still kept plenty of cash.

"Admiral...this just proves the point that you are an unemployed liar"
"I think as a group we should all not respond to any of Admiral's posts "

LOL. And this proves you are a 7th grade girl (shaming language, trying to ostracize). What's next, will you claim:

- "You have a small pen!s"
- "You can't get a date"
- "You are gay"
- "You live in your mother's basement"
- "You have issues"
- "You are jealous".

Sorry, StreetDumb: I'm none of the things you've alleged! I just think real estate brokerage is an unethical profession that needs total overhaul. I've been lied to by nearly every realtor i've ever dealt with, going back 20 years, on transactions where I was renting, buying, selling, and letting. They are, quite simply, the moral equivalent of used car dealers. Although at least used car dealers KNOW something about cars. Most realtors i've known were completely clueless about the real estate industry, and genuinely BELIEVED prices could increase 15%+ a year, indefinately, while income growth averaged 3%. LOL.

Got it, Street Walker?

whats happening here?

Streetwise and I are calling each other names.

> "Stock indices rise to Dow 11,000 as the effects of the write-downs wear off, and all the new
> liquidity added into the economy takes hold."
> Uh oh.... did Steve just give up on his "definitive" dow to 6500 prediction?
> Does this mean the bear market rally is over, and time for us to duck for cover?

See, Steve calls up this weekend... and we're tanking again...

commercial real is starting to meltdown. not good not good. according to bloomberg a 5% decrease in price of rent could trigger mass defaults.

is NY's nickname Madoff, a giant bubble where the entire city is built on credit? Worse yet is it not just the u.s. but the entire Country?

I do fear that we are in for a rude awakening in commercial RE...

once caveat, though... long term leases.

I would be curious to know the percentage... but a lot of buildings locked in some tenants. Of course, the margins are what will define this market. But, hopefully its only a small share on inventory coming free right now...

nyc10022, I don't think the mayor is worried about companies renewing leases and lower rents. I think he's worried about companies filing for bankruptcy, Circuit City, Lehman, Drier (lawyers) etc... My prediction is that lower aggregate commercial rents will be due to bankrupt firms vacating space and hence breaking their leases.

I meant to say that a long term lease turns into a vacancy when the tenant files for bankruptcy. Many more bankruptcies coming in 2009. Especially since the TARP money was used to pay bonuses and not to lend to ailing companies.

There's nothing wrong with credit. It's necessary. What's wrong is there was too much of it (before) and then it suddenly stopped (Lehman).

Of the two, the latter is the worse because it causes prices to fall, and deflation will kill any economy far faster than inflation. Why buy today when it will cost less tomorrow?

> My prediction is that lower aggregate commercial rents will be due to bankrupt firms vacating space
> and hence breaking their leases.

I agree with you on that... my only point is that when "market rate" is pushed down, we have a partial buffer in those long-term leases... so only the resigns (due to expiration or bankruptcy) get affected...

nyc10022, don't be so certain. Back in the 90's Morgan Stanely, Goldman, NY Yankees and other big players demanded concessions on leases if they didn't get them they were going to move to Greenwich or NJ. he city caved in. The big firms lease multiple spaces at different time horizons for maximum flexibility. I doubt that companies who pay too much rent will continue to stay in business by paying too much rent. In '06 the game was "lower my rent or we break our lease. OK, you break your lease, I sue you and replace you with a North Fork/Chase/Commerce/Duane Reade". In '09 the game is for landlords to keep whatever cash flow they can get.

"nyc10022, don't be so certain. Back in the 90's Morgan Stanely, Goldman, NY Yankees and other big players demanded concessions on leases if they didn't get them they were going to move to Greenwich or NJ. he city caved in."

and the city continued to do that through the 00s as well (hell, 2 of the 3 got concessions).
They may have spread the leases out, but you're still talking about only a portion of space that will be on the free market.

Absolutely, the market will get crushed... but I think less so than the residential market could, perhaps, given mostly 1 and 2 year leases.

nyc10022, all 3 got concessions. Goldman set up a trading floor in Jersey City before 9/11 and said they were moving traders. They got a deal on downtown space. Morgan got 1585 Broadway plus the outdoor ticker facade (originally 15 minutes delayed). Lehman got to build bigger on 7th in exchange for funding the new Alvin Ailey studios on 55th. The Yankees got a new stadium with a taxpayer subsidy. NYU is doing whatever it feels like. Same with Columbia. Anyone who pays rent and employs workers who have to pay city taxes (commuter tax) will name their price. Or leave.

yes, you are making my point. This happened in the 90s, this happened in the 00s. And, will always happen. Its part of the market. Treating it as a new factor would be a mistake...

We're moving Manhattan to Charlotte.

Not necessarily...

http://www.thedeal.com/dealscape/2008/12/is_bank_of_america_getting_rea.php

Cuts will come from all over.. to think just staff in NY will be cut is an over-generalization..