Foreclosures May Hit 1.5 Million as U.S. Housing Bust Deepens

Declines will 25% to 30% by 1st quarter of '08 and an additional 30% decline by 4th quarter of '09/1st quarter of '10. The time to start buying again will be 3rd quarter of '10.

Maybe your rent will go done to as well. Good luck in hoping your crash and rent deduction will come soon.

Obviously no one wants a crash...but the housing market in manhattan is insane and maybe this will be a correction.

This national trend has little bearing on the NYC market, which is dependent on Wall Street (still doing very well overall) and international tourism (booming due to the weak dollar).

I think know one knows what will happen (i.e. can predict the future). I am skeptical of people on either side who are so certain of future outcomes.

The subprime lending debacle should have little effect on Manhattan real estate as co-ops (85% of the bldgs here) do not approve sales to people with bad credit. They also require 20% down to ensure that equity does not disappear with rising and falling real estate prices. Therefore, there will be no widespread foreclosures in the city. I agree that prices may dip, but crazies like #2 who predict that prices will fall by 60% in the next 3 years, have no reason to post other than to scare people. Wall Street will need to shed thousands of high paying jobs to make an impact.

Poster #6 you are completely wrong. I do know the future, and this is why I am called an oracle. I can tell you for 100% certaint, no ifs ands or buts, that the Manhattan real estate market will decline by excatly 24.56% by mid 3rd quarter 2007.

Poster #2 is partially correct.

Perhaps that's what you're called to your face!

#6 you are a moron. You think "know one knows!?" Well guess what, that doesn't make sense, didn't you learn anything in elementary school?

People, stop calling each other morons, what ever happened to civility?

dork...moron... pathetic loser... psychotic... auditory and visual hallucinations... yeah! I can see why #8 needs to see a psychiatrist.

Poster two - if you're so sure that Manhattan real estate will be down the way you say, here's what I'll do:

I just bought a really nice brand new build penthouse condo in the prime Village that I'm closing on in about a month, and I'll bet you ANY amount of money (how does $10,000 sound?) that on 12 March 2008, the new condo I'm about to close on will NOT drop by 30%. If it has dropped in value 30% or more on 12 March 2008, the $10,000 is yours. If it drops LESS than 30%, the money is mine. And just to make the wager even sexier, I'll promise this:

Assuming I win (and I'm pretty sure I will), I'll then go DOUBLE OR NOTHING with you for another year until 12 March 2009 from 12 March 2008, betting that the price of my brand new place will not drop by 25% from that point on 12 March 2008. If it has dropped in value from that point by ANOTHER 25% or more on 12 March 2009, you get ALL THE CASH. If it doesn't, you pay up ANOTHER $10,000. www.streeteasy.com can hold tour money in an interest bearing savings account.

Are you ready to rock n' roll, bigmouth?

I think a lot of people who just bought in the "dead cat bounce" are starting to get scared again (rightfully so)....let's be civil though.

poster #13 here:

I AM being civil - I could not disgree more with poster #2's 'doom and gloom' assessment - Manahttan real estate DOWN 30%, and then ANOTHER 30% of that, all in 30 months - which means that average real estate will be 49 cents on the dollar. So that means, if I understand it, that in 2010, you'll be able to buy a one bedroom in an old average coop building in Murray Hill (an average central Manhattan area) for $310,000. It means you'll be able to buy a 1850 s.f. penthouse two bedroom two/half bath in 2010 in a higher end neighborhood like the prime Village with a 1,550 s.f. wrap terrace, fireplace, and excellent views for $1,400,000.

REALLY?

I AM being civil. And I'm certainly not concerned about what I feel is a nonexistant 'dead cat bounce' If poster #2 is sooooooooooo sure of his/her ridiculous assertions, then all I'm asking is for that poster to put his/her money where their mouth is. Just because someone challenges you, doesn't mean they're not being civil - there's no name calling going on here....

Poster one-same bloomberg reports record profits yet again at MS/GS/Leh-1st quarter net income

I know who will get killed with the subprime crisis-the foreign banks, who were late to get into the business and have not had the return on equity.

Poster 15 - honestly, those prices seem about right to me (I'm not poster 2 though). Things are just out of control right now. Prices appreciated 100% in 5 years. I don't think seeing a 50% drop over the next 5 is out of the question - this happens with bubbles.

poster #17:

Look, even though I don't agree with you, I can say that 50% down in five years is just as possible as 10% up in five years. Five years is a very long time frame, and ALOT can happen.

But 50% in basically two years? If that happened, the situation would be so disasterous that the market would be in total, absolute freefall - we're talking about '1929 crash' hysterics. We're talking interest rates at 15% (or higher). We're talking out of control inflation. We're talking a total economic meltdown.

Now, granted, if there were a head on terrorist attack on Manahattan again, then of course, the gloves are off - ANYTHING could happen. Same goes for a Tsunami-like act of god. But assuming that there is no massive terrorist attack or level 4/5 hurricane New Orleans shitshow in the next two years, do yoy really, honestly forsee this kind of extreme economic meltdown in the US in general and Manhattan specifically?

I mean, a slowdown? Sure. Could real estate prices fall in Manhattan? Of course! But 51% in basically two years? I'm willing to put hard cash on the table that says 'no way.'

i disagree with 50% decline, but more like 25% is "probable" as Greenspan would say in 2 years. Again, 50% decline would mean a masssive recession, increased Fed funds rate, and perhaps another middle east crisis (war with Iran) or a terrorist attack. Either or combined items as such and 50% maybe a slight chance but i certainly hope not. Alot of people would be horrified.

I know alot of people in Manhattan that have only put down 10% and have interest only mortgages, alot of them reset in the Fall of 07', i'm sure that when montly mortgage jumps from 2500 to suddenly 3700 more stuff maybe on the market.

By the way who's buying Real Estate at this point? Rent is just fine considering the nationwide decreases. Seems like there's NOOOOOOOOOO good news coming from developers or sellers...

Amen brother!

Will all the subprime borrowers out there please sit down!

I'm no economist but I do keep asking myself one question. Where is this $2 billion a week that we're spending in Iraq coming from?

I love pumpers who think 100% appreciation signals a perfectly sane market but a subsequent 50% haircut would mean the four horsemen of the apocalypse were saddling up. *BARFS*

umm.. the $2 billion comes from our taxes. The government takes in approximately $1 trillion in taxes per year. There's also US bonds etc etc

#19: Please note that there is no such word in the English language as "alot." I believe what you meant to say (twice in fact) is "a lot." Note the difference? Poor grammar detracts!

Interesting I had a friend who owns an apartment in the city that he just rented. He told me that there was one person ( potential renter) who saw his apartment who was very angry because they felt the rent he was asking was to high. This angry person was yelling at him saying the market is so overpriced and outrageous. He also told my friend not to be so smug because he sees a crash in the housing market in not so distant in the future.
I believe that renters are hoping for a market correction while owners are hoping for appreciation . May sound simple but when I see a post of someone predicting a decline in the market they must be renting.

I own and see a decline coming....its all part of the real estate cycle that keeps on proving itself every couple of years when people say it wont

Are you 100% sure a decline in Manhattan housing prices is coming. Hope you are right I will be waitng for one in the GV and tribeca area so I can scoop a nice deal up. Can't wait for the decline.

Let's all just agree that a 100% decline in Manhattan housing prices is imminent.

spunky... my simple advice to your friend would be to kick that person out the door... no idiotic owner should ever rent an apartment to anyone who is confrontational at the first meeting. This just shows their character and how they will eventually act as a tenant. Your entire life would be tarnished with complaints after complaints... and maybe even withholding of the rent due to their inability to pay or their psychotic control freak behavior. Such tenants should be avoided at all costs as they may end up being a tamper to your reputation as an owner.

If it was me... I would have said bye! The number of rental properties available are not plentiful considering the number of individuals planning to relocate to Manhattan each summer. Most of the nice properties are usually rented out by May of each year. Thus, people ending up paying more for a piece of dump with slumlords thereafter.

Cool...Free Manhattan apartments. I'll take a penthouse on CPW!

Post #30- You hit the nail right on the head.

But it took D.R. Horton Inc. CEO Donald Tomnitz to put a fine point on the actual situation.

"I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year," Tomnitz said at an investor conference last Wednesday.

God to admire the verbalization skills of some of these CEO's in the Housing sector

DR Horton building in NYC?

As to percentage decline predictions: I chose to sign a two year lease rather than by a 2mil apartment because I thought the probability that Manhattan would correct 4% a year is high. My prediction is that a 2mil apartment in Aug '06 will go for 1.844mil in Aug '08 - does this seem totally unreasonable to anybody? If this does occur the rent I've paid until Aug '08 will be a wash. (Also, I don't benefit from mortgage interest deduction because I have another mortgage.)

Obviously all the renters on the sidelines are the ones rooting for a decline, but in a way, that's good for us owners as there should be enough buyers to cushion a fall. Let's all collude and keep raising rents to force them into the game... oh wait. :)

#35, I got the same strategy, but I'm predicting a more significant drop - something like 7 to 8%.

i doubt a significant drop in the sales price. nyc is relatively different and i predict a stability with little to no change in the sale price. The US dollar is definitely weaker than other foreign currency this week than estimated. With this trend, it will attract more foreign investors paying 100% upfront cash for their condos. That's what drove the market to skyrocket over the past year... big bonuses in wall street plus foreign investors.

I agree about the cause of the run up, but what happens when bonus $$ dry up after a bad year on wall street?

Bonus season was awful 4 years ago. What happened to real estate prices? Even when fomer MD's were managing GAP's and J Crew's in 2000, what happened to RE prices? People, it isn't only the bonus babies. Lots of people want to live here, especially empty nesters and foreigners.

Also if you read the NYtimes - many rich parents also fund their kids purchases. . .they have many stories like that in the Real Estate section on Sundays. . .that isn't helping.

Dam rich parents are keeping prices higher.