Things getting better?

i was hoping for something a little more upbeat. doesn't it seem that the current admin has some responsibility to respond to this statement? seems like we're in a situation where the powers that be (and were) are convinced that the truth will somehow make all of this worse so they keep hoping the whole thing will disappear. another version of the endless national security argument.

Upbeat? Futures are up.

aboutready: not to defend hank/tim but lewis is insane and a pathological liar so i wouldn't go by anthing he says.
cc: the only difference between previous admin and this wrt to economy is hank was corrupt but competent, tim is corrupt but incompetent (except for being a very skilled bureaucrat, when it comes to that he might be as good as greenspan was)
http://www.portfolio.com/executives/2009/04/22/Treasury-Chief-Tim-Geithner-Profile
compared to everything else we're paying for, the education of geithner must be a good deal

se, i know. and he's a bit too fond, rumor has it, of happy hour as well.

i read some commentary on the portfolio article that mentioned the number of people unwilling to speak about Geithner, and how that's changed in only a few months.

interesting article but not doing much for my confidence. and certainly not change we can believe in. i agree with jack welch's take on leadership not being about pointing out the obvious, but setting a direction and getting people on board with it. it does feel that best case geithner is moving stuff from the inbox to the outbox. no doubt, it is a huge problem years in the making .... but, tell me what has been done to address the problem.

Some gallows humor, but a couple of them made me laugh:

http://www.bloomberg.com/apps/news?pid=20601039&sid=aMUsbB7BswMM&refer=home

Wow - I know it's a bit late, but Printer kinda worked all of you. Great post, Printer.

CC - what is your day job?

no, printer doesn't get to me. he's droll.

Might be best to hold out for a bit...

More sellers slash home prices in NYC than elsewhere

Thu Apr 23, 2009 10:47am EDT

NEW YORK (Reuters) - Right now, somebody in New York City is probably contemplating what used to be unthinkable: cutting the sale price of their home.

As the housing bust finally bites the Big Apple, more sellers are slashing prices in the U.S. financial and cultural capital than in any other big city in the country, according to data from real estate website Trulia.com.

Currently, prices on 39 percent of New York City's homes for sale have been cut, Trulia said on Thursday.

The average cut is 14 percent, or $295,194, to bring the average price to $2.1 million.

Los Angeles sellers took second place, with 33 percent of listings cut by an average of 13 percent, bringing the average price of $1 million. In Chicago and Houston, about a quarter of the homes listed for sale have had their prices cut.

Until recently, New York seemed to be immune to the housing downturn that has battered other major metropolitan areas for the last three years.

Average prices of 20 metropolitan areas are down 29 percent from their 2006 peak, according to the Standard & Poor's/Case-Shiller index.

Over the same period, New York's prices have fallen only 16 percent compared with 46.5 percent in Las Vegas, 43.4 percent in Miami and about 40 percent in Los Angeles.

Those cities experienced frenzied overbuilding, speculation and price appreciation during the boom.

Nationwide, more than one in four homes on the market have had their listed selling prices reduced, Trulia said.

Price drops in New York are accelerating due to job losses and wage cuts on Wall Street.

"The financial crisis has hit the New York real estate market late in the cycle, but extremely hard," said Trulia chief executive Pete Flint.

"There's been a dramatic increase in the number of price reductions over the last six months."

Some of Manhattan's most storied neighborhoods have been hit the hardest, according to Trulia.

On the Upper West Side, 35 percent of the apartments on the market have taken price cuts averaging 15 percent.

Of listings in the East Side's tony "Silk Stocking" district, prices on 34 percent of listings have fallen an average of 13 percent. On the Lower East Side, 40 percent of apartments for sale have been cut by an average 12 percent.

http://www.reuters.com/article/newsOne/idUSTRE53M42120090423

OTNYC - thanks for the compliment - I clearly struck a nerve with upperwestrenter - he got out his pitchfork and started to stab his Tim Geithner doll....
Columbia, your comment about NYC is a total non sequitur. The NYC housing market is substantially different from that of virtually every other locality in the US - to start with, the %age of people who rent vs. own here is virtually the opposite of the rest of the country. 2nd, I think only Santa Montica has anything approaching our rent-stabilization laws. 3rd, the prevalence of co-ops and their ownership/financing rules. Now, those differences may not prevent us from falling as much as the rest of the country, and they could even lead to our falling more than the rest of the country, but to say that there aren't unique factors to our market is disingenuous.

but, i guess you would agree that ultimately its about incomes. up until about 6 months ago, incomes in NYC were huge and rising. now they are in freefall. seems the conclusion is obvious. by the way, i do not think this will turn nyc into a crime infested ghost town. assuming that the political will can be found to keep the muni unions in check, everything will be fine; prices for apartments will be substantially lower which is a good thing unless you happen to currently own one.

Printer: I never said that nyc RE was the same as the rest of the country.
I simply said that you're a douche

Point match!

In what way is geithner corrupt? I'm no fan, but, what do you mean by 'corrupt'? Taking payoffs?

who said he was corrupt? check out the article above from portfolio. make your own decision. he is in the second most important job in the world. is he impressing you?

He cheated on his taxes, that's a healthy start...

upperwestrenter - the quality of your dialogue and vocabulary are impressive. keep up the good work

great....lets get to the real essence of the discussion. geithner did cheat on his taxes but far more relevant to nit pick poster's vocabulary.

cc, in the nasty news thread I posted about a Moyers interview tonight, regarding a potential Pecora-style investigation, that you might be interested in.

dwell: here's a number of definitions, i believe several do apply, although 'payoffs' specifically have not been alleged. esp see the last one - that refers to good old USD$

transitive verb1 a: to change from good to bad in morals, manners, or actions ; also : bribe b: to degrade with unsound principles or moral values2: rot, spoil3: to subject (a person) to corruption of blood4: to alter from the original or correct form or version intransitive verb1 a: to become tainted or rotten b: to become morally debased2: to cause disintegration or ruin

http://baselinescenario.com/2009/04/23/fun-interview-with-simon/

Heh, check out the first comment: think that's our Steve F., endlessly expounding upon how housing is/was/remains the best thing ever despite mounting evidence to the contrary?

printer's arguments

1) Wall Street companies have become banks - that means they can leverage up 'only' 12x capital not the usual 30-40 - that is good for their solvency but means they would have to increase volumes and/or margin by factor 3 ??

2) newsflow
Indeed I don't pay much attention to actual economic news reports
esp when these figures are seasonal adjusted
just study the monthly Employment Situation Report - it's a huge joke.
Based on it's seasonal adj there all still jobs created in the construction industry LOL, finance LOL etc
To get the real picture in the economy, watch the revised figures - they will tell the 'real' picture

HT: correct, look at latest MS quarterly earnings to see what deleveraging did to them.

HT1, the B/D model, all birth, all the time.

3) NYC is maybe 6 months away from rampant crime, homelessness, and general Blade-Runner like conditions.

Agree - that will not be the problem but cutbacks in services will happen due huge budget deficits in NYS and NYC. Why did e.g. Bloomberg not set aside huge amounts in the fat years???
You can exchange Bloomberg with any Politician
There will be tough fights with the NYC Unions to push through cut backs in employment, salaries, health insurance, pension plans (most of Public PP are in bad shape but PP payments are guaranteed???),
retirement age - you name it

4) Tax deductions are illusory - your actual tax bill may be less after you deduct your mtge interest, but I assure you that is not really the case.

Schedule A I believe is that.
The amounts high-income people can deduct is already limited and will be further cut-back.
Maybe the deductibility of mortgage interest expenses will be eliminated totally - we will see.
To go long RE to save taxes is a stupid argument - aah I get you, you believe one can deduct the losses off the tax bill? Only for investment properties I believe LOL

i think the unions represent the much larger issue than service cutbacks. i don't believe that 10% (made this number up) fewer police necessarily results in 10% or any other increase in crime. just as picking up garbage every 4 days instead of every 3 (again made up) results in significant quality of life deterioration.

mta is a different story in that i think increases in cost lead to decreased ridership which cannot be offset because of high fixed costs.

bloomberg's legacy will be all about whether or not he in conjunction with state officials (god help us!) can get the unions on board with what is inevitable. if they can't and costs stay constant and spread across lower tax base, then houston, we got a problem.

5) It may appear that certain properties are indeed closing, but that is just broker-spin. If you adjust for the buyers whose IQs are below 40, have just come into huge windfalls, and are under the demonic control of said brokers, there are zero sales happening.

There a F E W closings and most of them in the small potatoe range = under 1mn/studios/1BR

The current crisis for Manhattan RE is playing in the upper levels - there is almost NO activity.
Or as The Hamptons go so goes Manhattan ;-)

6) NYC is in no way, shape or form different from any other market in the United States. The overall wealth, co-op financing rules, vacancy rates, long-term crime trends, demographic changes and appeal to foreigners have no impact on our market whatsoever. We are all no-doc, 100% leverage, neg-am flippers.

Manhattan is an island - case closed. That means limited space BUT it also means there are no guarantees that the RE bubble will not deflate. It's happening right in front of your lying eyes LOL

I have seen reports about CEO's of major companies which faced margin calls on their portfolio.
I believe there is much more leverage in the system on all kind of levels then you and I know about.

7) Only on the very day that Columbia, Steve, NYC10022, etc. sign contract will the market have reached its absolute nadir. Prices will remain at that level for approximately the 2 months it takes for their contracts to close, and promptly soar 20%.

NOBODY is able to time the botton/top of the Manhattan RE market - NOBODY

I believe we will experience a L shape recovery - but it will be streeeeeetched out over years.
No quick recovery so no reason to get nervous on the first green shoots ;-)

That the great thing about a RE crash... you don't have to time it perfectly.... you have time even after you miss it to find someone desperate. L shaped recoveries rule for vultures!

"i think the unions represent the much larger issue than service cutbacks. i don't believe that 10% (made this number up) fewer police necessarily results in 10% or any other increase in crime. just as picking up garbage every 4 days instead of every 3 (again made up) results in significant quality of life deterioration"

Difference is the garbage all gets picked up in the latter case.

This is NOT the case when you remove cops. Yes, 10% fewer doesn't necessarily mean 10% more crime. It can mean 20% more crime. A lot of factors at work.

It CAN mean 20% more crime. Of course if we want to use ACTUAL data instead of hypothetical data, you'd see that the NYC police force peaked in 2000 and has been declining ever since. And crime has been declining all along. And before you cry 'that's because the economy was strong', crime has been increasing in most major cities of the US since before the recession began, while it has been declining in NYC. Which I guess means that...NYC IS different after all

Hi All: I enjoyed reading this string. There's lots of intellectual ideas, but how about good old fashion SUPPLY and DEMAND. I notice there are 14,801 apartments for sale in Manhattan according to SE (the "inventory"), and that it goes up by about five apartments per day. Surprised none of you talk about that. Can anyone tell me what the Manhattan inventory was, say December, 2008, September 2008, etc.? What is the average inventory in Manhattan? The name of this string is "Things Getting Better? Wouldn't you look for a reduction in the inventory to preceed things getting better?

come on: somehow you think that the number of police has been set up to some how perfectly minimize crime. that is logically unsupportable. my guess (unsupportable) is that crime is a function of many things, least of which is police. everyone is afraid of ? having lived here a long time, its all about attitude and precaution...sure, its better now than in the 70's but to me the same rules of attitude and precaution prevail.

In Harlem there is a lot of the inventory going off the market:
19 new listings,
30 no longer available
in the last 7 days
Why? Because they are not selling. But they were not accepting lowball offers neither. Is the majority of these cases sellers that can sit and wait for an upturn?

We all know contract signings (negotiations, due diligence, buyer and seller signatures, etc.) here take up to 3 weeks to get done. Add the time it takes for a broker to change the listing to "in contract" status and we potentially have a 3-4 week information delay.

Inventory numbers on SE therefore are trailing (by about a month).

Being on the front lines of real estate, there has most definitely been an uptick in accepted offers and contracts going out. Apartments which was sitting on the market, are now getting multiple offers (albeit at 10- 15% reduction). The bulk of these apartments are below $1m reflecting the demand coming from first time homebuyers and other sideliners jumping in with prices down. Rates below 5% and the tax benefits are appealing to these homebuyers who have long been priced out of the market.

Whether this is a false positive or temporary spike, only time will tell.

Personally, I was secretly hoping for further price corrections before I would jump back in but these last few weeks, have made me reconsider.

Whatever the future brings, the desirablity of owning in this city was underestimated by me. My underestimation of this came in part from reading the overwhelming negative posting here on SE.

I am beginning to think everyone here has an agenda. From a broker who wants to talk up the market to entice buyers or talk down a market to encourage sellers to reduce prices or a self serving buyer wanting a huge drop so they can buy at reduced prices or one looking to unload their overpriced apartment.

Bottom line for all SE users is beware of any bear vs bull analysis done here by posters, you never know their hidden agenda.

anon10 there are lots of posters that simply give their opinions. Believe it or not, I experienced a lot of generosity here from very knowledgeable people. As anonymous as we are, there is some kind of unique quality in the tone of the poster that perspires, and we are sensitive to it. There is much more here than pure speculation.
Since you are in the RE trenches, can tou answer my question?

i found my agenda, I know everyone wanted to know what it was and it is:

"self serving buyer wanting a huge drop so they can buy at reduced prices or one looking to unload their overpriced apartment."

don't all posters, by the fact that they are moved to post somewhere, have an agenda?

that's sort of an existential question. at a very basic level the desire to make a joke, share information, become informed could all be considered an agenda. but to think that this board could move markets on its own is a bit silly. it could definitely be part of something that gains momentum under certain circumstances, but as a catylyst, not so much.

there are many people here who try to be helpful. and we seem to have some self-moderation that isn't found on alot of the mainstream boards. it's rather impressive, actually.

"I am beginning to think everyone here has an agenda. From a broker who wants to talk up the market to entice buyers or talk down a market to encourage sellers to reduce prices or a self serving buyer wanting a huge drop so they can buy at reduced prices or one looking to unload their overpriced apartment."

Isn't that sort of the definition of a democracy? Everyone looking out for their own interests? I don't see this as a bad thing at all. I mean, whose interests should I be representing?

evnyc, that's obvious, my interests.

I'm not saying looking out for your own interest is necessarily a bad thing. All I am trying to say is be cautious when you read these bull vs bear analysis because not all of it is objective or truthful. Many here have their own agendas and are advocating them as a their "true opinion of the real estate market", which is total b.s.

Anyone working in real estate knows things are getting better at the present time. How long and will it be sustainable is questionable. BUT very few people here are acknowledging the general improvement, they just continue to deride the market.

I guess by virtue, the people on this website are often times buyers looking for an apt to buy. Therefore, if they can say how bad the market is, in theory, they strengthen their price negotiation position. But obviously, how impactful posters on a real estate board is to the market is debatable.

For me, I hope prices drop another 25% so I can get back into the market. But lately I'm questionning this ever happening. But unlike some of the posters here, I'm at least being truthful!

Prove the uptick is real beyond seasonality and exists beyond the low-end that is most sensitive to low rates and the tax incentives, and you'll be right about your hopes for a long-lasting recovery.

I don't doubt there is some elasticity from the government actions and a sharp 20% fall in prices in the last 6 months - I would readily say any rate of decline will fall, quite possibly sharply for the next 6 months. I just think the direction is still down with nervous sellers still adding to inventory and failing to equalize supply/demand near-term.

anon10, wow, uptalk, downtalk, i wonder if you'll buy this talk.

"Anyone working in real estate knows things are getting better at the present time."

You're not talking to the people I know in real estate.

aboutready - I know for a fact it is getting better. And it is not just buyers looking around(like Urbandigs is stating), offers are being made and contracts signed. Whether it holds or is a temporary spike is another debate. And it is concentrated in apartments priced under a $1m. This means not all brokers are busy. But if you ask around, you will find this to be truthful. Inventory numbers should start seeing some improvement BUT only if it is not outweighed by more apartments being added on the market for sale because of the job losses/economic downturn.

The thing to remember is that the luxury market was driven primarily by Wall Street buyers, which of course got decimated with the financial sector downturn. There are plenty of other occupations in the city that pay relatively well ($100k - $200k) which were affected but to a much smaller degree. With the low conforming rates, recent price correction and increased tax benefits, it is easy to understand why this market is showing strong improvement.

Generalizing the Manhattan real estate market in these times with all that is going on is fruitless and ineffective.

anon, you're out of your f'n mind. we're in the 800k to 1m income range, and i wouldn't touch anything.

If you can con new buyers into the market using reinflating bubble mechanisms supported by our gov't, well, i'd say good on that newly reinflated bubble, and how long do you think that will last?

And, I'd say i'm very sorry to those who felt that they should take advantage of the low rates to get screwed.

I know this market, almost as well as any broker. I follow it just for fun, and i've done so for years. Go away, you're hurting people.

I'm a "wall street" buyer. Sort of. I just want to point out that a $100-200k salary barely allows one to buy a studio in this city. Several friends in the $300k to $500k income range have lit out for cheaper pastures.In my experience there's just the remaining $300k earners wondering whether it's worth being locked into their jobs to purchase tiny 2-bedroom apartments way out in Brooklyn. Strong improvement? I'll believe it when I see an uptick in the number of apartments I'm watching going into contract. Until then I call BS.

I am afraid to say that the 2 apts that I liked the most (seriously considered buying one of them) got in contract last week. Both in Harlem, where nothing, but nothing, is selling. This means something is moving. I bet they sold because they were new in the market, well priced (considerable lower than 2008 comparables 4 weeks ago), have low monthlies, nice views and light, and some character. The rest is still there. Looks like people started dancing, and they are doing it with the prettiest.
This being said, I foresee many more opportunities coming along. The last 2 quarters of the year have a lot of variables in favor of a further correction. I believe inventory will keep growing.

I meant in the market since 4 weeks ago, considerably lower than 2008 comparables

mimi, i have seen the same. some product is moving, definitely, but only at a great discount. there are something like 600 properties that have gone into contract the last 30 days. if that weren't true, we'd be in a major depression. this is prime buying season, brokers should be telling their clients that if they need to sell, now is the time to play ball. and for many people who have been looking, things seem, if not cheap, much cheaper. this is normal, there will always be people who feel like going in at certain price points that are comfortable for them.

perhaps i overreacted to anon's comment. but that is the problem when a comment contains both the truth and not the truth. things are not "getting better." adjustments are being made and the market reflects that. but, as evnyc points out, to suggest that this is an appealing market for those earning $100-200k is inaccurate (and to me insulting). Inventory will probably dip (although the new developments may be forced to put units on, offsetting that dip), and many will probably call the end of the correction. But it will just be seasonality.

aboutready - you need to relax and get over yourself.

You are not the market or the great oracle of real estate.

And if you read my comments, I did not tell people to buy or not to buy (unlike you).

All I am stating is that the under $1m market is showing strong improvement PRESENTLY. It is an observation from being in the business. Whether it is sustainable or not is something I am NOT making a judgement on. That is up to the individual. Maybe you should try that for a change.

I would love nothing more than the market to drop another 25% so I can jump back in but the reality is the current uptick makes me nervous as it probably does with a lot of buyers. Have we settled on a price point? I hope not, I still think it's way too expensive here but unfortunately, the market determines this.

And if you don't think someone making $100k - $200k cannot afford an apartment priced between $400k to $500k with 20% down at an interest rate of 4.875%, I suggest you get a mortgage calculator.

I meant if you don't think someone making $100k-$200k CAN afford an apt priced between $400k-$500k, with 20% down at 4.875% interest rate, then you need a mortgage calculator...

And keep in mind, $100 - $200k salary is per person. In a 2 family income, that likely would be $200k - $400k.

but you keep saying its getting better: "showing strong improvement PRESENTLY." What does that mean? That some people are buying apartments (most sub $1 million) at considerable (20%?30%?) discounts to peak? I guess if you set the expectation bar low enough, anything looks better...but so what? as i have said repeatedly, i don't understand buying in an environment that is not up in the air when rentals abound almost always at a lower monthly cost than the equivalent purchase.

anon, you're a realtor, and the market is not improving. If anything, prices are falling just as fast or faster than they were 3 months ago. Yes, more units are closing, but that's due to two very obvious factors: seasonality and steeper price cuts and concessions from sellers. I mean, reality is sinking in. We're obviously closer to the bottom of this, but that's only because, you know, time flows in only one direction, so we have to be. But please, just tell your clients to lower their prices and stop trying to pose like a scared prospective buyer, which is an oximoron. What can you be scared about? rising prices? bidding wars? We have at least 1 more year of deep recession and 2%-4% more unemployment coming our way. Tell me how can that live alongside a new NYC RE bubble, please...

"And if you don't think someone making $100k - $200k cannot afford an apartment priced between $400k to $500k with 20% down at an interest rate of 4.875%, I suggest you get a mortgage calculator."

Anon, that IS my financial situation. No, you canNOT afford it, and $400-$500k is still what a wee studio or a minuscule 1-br costs in this city, not a 2-bedroom in which one might be able to consider starting a family.

"evnyc, that's obvious, my interests."

Aboutready, ha! Sorry I missed that earlier.

anon, the oracle is in omaha. piss off.

check out this thread for confirmation of my point #2:
http://www.streeteasy.com/nyc/talk/discussion/10497-nyt-after-an-off-year-wall-street-pay-is-bouncing-back
and of course it also proves point #1 as well.
and this thread we're on now is confirmation of point #5.

you bears are way too sucked into your negative feedback loops - you know, when you have to contort every single positive item that comes out to fit the thesis, you need to start examining the thesis itself.

I just found out that of the 2 properties that I posted in this thread as being "in contract" one is actually being rented, they couldn't sell it. When I called about the ad, the broker said, sorry, it's already in contract...and today I asked him to elaborate. The ad wasn't a multiple listing, and had 2 ads: 2 prices, 2 different pics, no floorplan and no address. Shady tactics confuse everybody and can be misleading, in this case, I took this rental as a sign of an uptick.
So of all my saved sales (quite a bunch) only 1 is in contract. In a couple of weeks we'll see if the uptick is reflected in contracts signed.

mimi, when I was doing the rent/buy comparisons I noticed that frequently brokers list the square footage slightly differently on the two listings, clearly trying to create confusion. (i.e., for sale listing at 1078 sf, for rent at 1083 sf, same unit)

You have to have the financial acumen of a 2 yr old to buy in manhattan today. Rents are down 15-30% (which means prices need to decline at least that much more IF you assume prices have declined enough for price/rent ratio to be in equilibrium vs pre-collapse rents which they haven't). Mortgage rates are only going up from here (they can't go any lower), which will push prices down even more.

From the NY Mag article linked on the SE main site:
"After all, only a decade ago, the average cost of a Manhattan apartment was merely $500,000—less than a third of what it is today."

http://nymag.com/guides/opportunists/56291/

I realize that averages are a skewed way of looking at real estate, but really? You think this bubble isn't gonna pop like a big zit, printer? I'm not bearish for the fun of it. I'm bearish because of the actual numbers I see.

"And keep in mind, $100 - $200k salary is per person. In a 2 family income, that likely would be $200k - $400k."

anon, shouldn't you price in some chance of losing one of those salaries? or is it "let's hope for the best" type of strategy? imagine if that indeed happens, if one in the couple gets fired. nyc is not the kind of city where you can live comfortably on one salary, pull off a mtg taken counting on both salaries being there ... i think there might be a change for living on ramen noodles if that happens.

hey, that's in part why prices go down during periods with higher unemployment. is not only about higher defaults and force sales. it's also the higher risk premium of more employment uncertainty that has to be given to the buyer by the seller.

evnyc - the question isn't "is the bubble going to pop" - clearly the bubble has popped - prices are off 20-30%, with the vast majority of that coming in just the past 6 months. The question is how low are prices going to go. And despite the multiple signs that we have seen improvements in the macro environment during the past 2 months - particularly the credit markets (Libor is pretty much back to pre-Lehman levels, for just 1 example), and that Wall Street had a very good quarter (will it continue? who knows, but it's been a very good start to the year), and that sales volumes are picking up (off of very low numbers, its true), and that retail sales are stabilizing, I don't see any signs that the bears have adjusted their views at all. Does it mean that we've hit bottom and its only up from here? I doubt it. But their is certainly reason to believe that the worst case scenarios are off the table (reflected in the stock market). Yet the bears, instead of taking in this data and re-thinking their stance, choose to ignore the data, or worse, contort it 10 ways to make it conform to their view that we are in the middle of armaggedon.
Stubborness is not a virtue - anymore than it was when the bulls ignored, or twisted the data during the bubble to make valuations seem reasonable.

unemployment?

lets keep it simple. what would you estimate the number of 100K + a year jobs that have been or will be lost on Wall Street? how much of that job loss has been absorbed into pricing of nyc real estate so far?

I did a little exercise for fun. I kept it in an area that I've followed for a long time. This thread got me thinking.

I searched for 2 bedroom properties in Manhattan, but excluded upper manhattan (arguably I could have included Morningside Heights, but I didn't), for less than $1m. Many such properties are really one bedroom units, glorified, so I added the requirement of at least 1.5 bathrooms, which will minimize that effect. I pulled up over 550 properties, a whole bunch of which were listed recently and have no price cuts to date. If you've been looking for awhile, this might mean something to you. Both up and down cycles are affected by momentum.

It isn't stubbornness to take into account that notices of default are skyrocketing in California again, that the Wall Street numbers were massaged and untrustworthy at best, that banks still have loads of these assets on their books, that credit is still frozen, that people are still losing their jobs in droves, and that no one has produced any trustworthy data on this supposed uptick in contact signings. It is equally stubborn to insist that this definitely the bottom and we'll start ticking up from here. All of the leading macroeconomic indicators are still dismal, and I am not convinced that we will not fall further as a national economy. You disagree. Fine. But calling a reasoned disagreement with your analysis is just as stubborn.

"But calling a reasoned disagreement with your analysis [STUBBORN] is just as stubborn."

Oops. Shouldn't eat and type.

See - perfect example "the Wall Street numbers were massaged and untrustworthy at best" - when you don't like the data, just claim its faulty. Fact is, underwriting volumes in fixed income markets were very strong (fee income), trading volumes were up substantially as well (essentially fee income), and spreads have contracted substantially. Could spreads widen out again? of course they could, but the fact is that in the 1st quarter fee income was up sharply, and spreads narrowed allowing WS to both reduce risk and recored gains. "Credit is still frozen" - really, you really believe this? Then how to explain the large amount of new issued in the investment grade (and somewhat better numbers in high yield?" What about the massive amount of residential mtge re-fi's going through the system (more fee income)?
And we all know that in NY in particular, there is a long delay between agreeing on price and going into contract, and a longer delay in getting the contract closed, so there is no such thing as real-time data that would already be reflected in the market.
Also, hedge funds have had a pretty good quarter. From my anecdotal surveys, firms that had decent '08s (-10% or better) are pretty much back to the water marks, and are able to raise new money. firms that had bad, but not catastrophic '08s (-10-20%), have made it a good chunk of the way back to the water mark, and some have been able to raise new money. places that had bad '08s (-20% or worse), are still hoping to hang on.

printer, when you can show me some evidence somewhere that something is getting better that is not related to massive redistribution of monies to the banks, i'll feel a bit sunnier. 6 out of the 10 leading economic indicators were negative, quite negative. The four that weren't: money supply, the stock market and two others I can't recall but I do recall that at least one of those was a number that wasn't indicative of a broad improvement but a temporary function of the government's money.

sorry to be a broken record, but what about all of the jobs that have disappeared forever?

i was wrong, the stock market will make April's numbers look better. from econoday, the economic calendar on Bloomberg:

The Conference Board's index of leading economic indicators, down 0.3 percent in March, offers no signals of improvement for the economy. Components show wide declines including indicators on building permits, vendor performance (which is quickening), the factory workweek, and jobless claims. One of the largest declines in March is in stock prices, which however is one component that is very likely to show improvement in next month's report for April. Showing improvement in March are the interest rate spread and money supply, two indicators that reflect active government intervention to stimulate economic activity. The coincident indicator fell down 0.4 percent in the month, a deep decline but an improvement from prior months. This recession has been long with no end in sight though whether it is deepening in intensity is still uncertain.

Thank you, aboutready, I didn't express myself well above and you were much more clear. As for printer, I think that for now we're just going to have to agree to disagree.

" crime has been increasing in most major cities of the US since before the recession began, while it has been declining in NYC"

In case you didn't notice, the rest of the country saw RE prices tanking and folks losing jobs for the last two years.

We just started here.

So, point is, we're just a couple years behind them.

" I don't see any signs that the bears have adjusted their views at all."

Only because you aren't paying attention to what they're saying...

If you actually opened your ears...

I'm getting really tired of the boneheaded comment that "Manhattan is an island, space is limited" --twice in this thread alone! Guess all those former gas stations in Chelsea and the far west side that suddently became 20 story condo buildings didnt actually add to the housing supply. Not to mention the 10 gazillion new units on Riverside Blvd alone. Oy vey.

Why have the jobs been lost forever? We've gone through busts before - I keep pointing out that Wall Street lost 20% of its jobs following the dot-com bubble, but only 5 yrs later it was back to the peak levels. The IPO machine came and went, but other areas picked it up. The securitization bubble has come and gone, but something else will pick it up - what, I'm not sure, but I'm pretty sure that Wall Street will find new ways to separate people from their money. Wall Street JUST showed you this quarter that it is still able to generate large profits - even the most bullish among us would never have thought that this quickly we'd have such a good quarter.
This is what happens in recessions - jobs get lost, and then we have a recovery and new ones are created. One of the best lines I've heard during the past year - "The world only ends once - its a trade you have to time exquisitely"

so...your evidence/argument is based on ...."I'm not sure, but I'm pretty sure that Wall Street will find new ways to separate people from their money." well, now i understand....very encouraging analysis.

That is a great line. I have no doubt that there will be a recovery. I just don't think we're there yet.

I'm not at all surprised that Wall Street made a ton. My cynicism is growwing daily. But I'm hoping that what this guy posts (pay attention, printer, to the last paragraph) has some truth.

http://baselinescenario.com/2009/04/26/guest-post-too-big-to-fail-and-three-other-narratives/

I don't think anyone thinks we're there yet (maybe SteveF). My point is, the worse case scenarios on the macro side are not playing out, and that should cause bears to re-assess where they think prices can go to.
Even if you personally never believed armaggedon was upon us, the fact that others did had to play into your forecast. For instance, it is very difficult to time RE mkts, and there are steep transaction costs (both money and time). So if someone thinks the most likely scenario is that prices are going to drop 50%, it would be worth it to sell, rent and buy back in. But if you now think that a 20% drop is the most likely scenario, it isn't worth the headache & risk (assuming you like your current place and weren't otherwise planning to sell). If you have a job, but were very worried about keeping it and finding an equivalent, it might make sense to sell. But if you now feel confident that you'll keep your job, your not going to sell. This reduced supply (both immediate and future) has to impact your forecast.

OK printer, you seem to be trying to play ball rationally here. I am quite possibly one of the most negative people here. But I don't think I'm pulling this out of my nether regions.

"the worse case scenarios on the macro side are not playing out" well, hell, I should hope not. $4 trillion, the banks being treated like an ADD child no one knows how to medicate, every major player in this crisis being told they're too special to fail (GM's just got to be pissed). how long can they keep this up? they need asset prices to rise, and quickly, but if they manage that, they've just created another bubble with the taxpayer's money doing the inflating. during the first go around the people went into debt semi-willingly, now for the second round we have no option. there still has been no creation of REAL wealth that merits asset prices anywhere near what's on the books.

This is looking like it has the potential for a second huge wave down, or at best, a Japan ending. If you can convince me that I am wrong, I would be very grateful. This perspective sucks, especially as I tend to think rather alot about the little people, not whether or not John Thain will ever land a decent position again.

Aboutready, I love Baseline Scenario. He is a great critical thinker and writer.

I disagree with you, printer, that we need to reasses where prices might go to. People are losing jobs and many will not be able to sell their apartments at the prices they paid. Once prices reset, many people are going to find themselves camping out in small apartments that they vastly overpaid for. At some point, some of them will want to get out of that arrangement. Either way, prices are going to fall further. It has nothing to do with armageddon scenarios; it's pretty basic economics. Job losses=distressed sellers=lower market prices. Prices just got so completely out of whack with incomes. Until that problem is rectified there will not be a recovery in real estate.

> instance, it is very difficult to time RE mkts,

Nope... was pretty simple for anyone paying attention. Tons of folks here did it right.

something that the entry market has against it is that during the last 3 years a lot (according to pros) of transactions involved down payments provided by mom&dad. many times parents wanted to compensate low levels of retirement savings with that sure bet called real estate. i could bet the farm that this source of down payments all but disappeared. both due to shrinking of parents nest egg and due to acknowledging that RE is not such a sure bet.

Why have the jobs been lost forever? We've gone through busts before - I keep pointing out that Wall Street lost 20% of its jobs following the dot-com bubble, but only 5 yrs later it was back to the peak levels. The IPO machine came and went, but other areas picked it up..."

Point you keep missing is that we just went through an unprecedented bubble of profits based on leveraged principal trading (half of goldman profits). Not to mention the hedge fund scam.

Yes, Wall street will find a way back, and bla bla bla. They'll figure out some other way to make money.

Difference is, finding something else doesn't mean a return to the bubble levels.

Just as getting past the dot com bust didn't bring dotcom stocks back, Wall Street recovering doesn't mean a return to bubble profits.

And without bubble profits, you don't get to keep bubble real estate prices either.

There will be recovery, sure. But pretending recovery from a bubble means getting back the bubble.

Well, thats just nonsensical.

about - i think the disciplined 'little people' are profiting from all of this - look at the affordability indexes in CA - people are buying houses, financed with 30yr fixed mtges, at 25% or less of their gross incomes.
I don't understand what you mean by 'real wealth' and that asset prices are too high - are you saying that you think all stocks and real estate are currently overvalued?
I'm seeing some great things happening that will set us up for a nice expansion. We're in an economy where final sales are stabilizing, production has fallen, and thus inventories have decreased. In huge areas of the economy like homebuilding and autos, we are at unsustainably low production #s. This is shaping up like most other recessions (excepting 2001/2). We are finding the bottom, and once things stabilize (which it already is - see durable good #s), we're in great shape for a solid rebound. All this while seeing the savings rate go back up to sustainable levels.
Will it take more time for the banking sector to repair balance sheets - of course (particularly CRE), but the steepness of the yield curve will expedite that process.

This is NOT shaping up like other recessions. Usually recessions are caused by the Fed hiking interest rates in response to inflation. Credit/financial crisis recessions are entirely different beasts.

i don't respect the "disciplined" people theory. the cards have been so extraordinarily stacked against all but the wealthy that I'm amazed anyone has a decent credit rating any longer. do me a favor. please go to my thread on important economic news and watch the Elizabeth Warren presentation at Boalt. it's an hour, but if you watch it and you can come back and tell me that the "little people" are profitting from all this, i'm not certain what I'd say.

re: But pretending recovery from a bubble means getting back the bubble.

Best comment I've read in a while

re: in CA - people are buying houses, financed with 30yr fixed mtges, at 25% or less of their gross incomes.

The CA real estate market correction is way ahead of most of the country. And even with the buying, the buzz now is all about the 'shadow inventory' amidst continuing high foreclosure rates. No one I know is calling a bottom in San Diego County for example, even though things are still selling there.

"a solid rebound. All this while seeing the savings rate go back up to sustainable levels. "

what does solid rebound means is the 64k question. a better labor mkt doesn't rule out a continuing deflation in asset prices, like housing. the deleveraging might keep on going across the board.

pay attention to that savings rate, in great part is due to households paying down debt. don't confuse that with traditional savings, they are not putting money aside, they are improving their balance sheet though.

"re: But pretending recovery from a bubble means getting back the bubble.

Best comment I've read in a while"

Thanks. I've been saying that for a bit, but someone posted a longer take on specifically this point that I found really good... but I can't find it. It makes a few comparisons... including the price of cisco.

But that is the HUGE mistake printer and others seem to make.... that, recovery, when it comes, means the return of all the things that were illogical before the crash....

This is national data, but it's informative nonetheless:

http://www.calculatedriskblog.com/2009/04/q1-2009-homeownership-rate-at-2000.html

Check out the estimates of inventory. The increases in home ownership of the last eight years just disappeared, but the increased inventory didn't.

Hey 10022, is that the article your reasoning was referring to?
http://www.oftwominds.com/blogapr09/housing-not-coming-back04-09.html?ref=patrick.net

sledgehammer, I was surprised at how little response that article got. I was just about to post it for 10022.

Yeah, that was it.... good article. Not a complete overview, but some very good specific points.

Here is the part I was talking about:

"1. Bubbles do not re-inflate in the asset class which just popped. It is simply a truism that bubbles never reflate, ever. Tulip bulb valuations did not rise to stratospheric heights after the Tulip Craze popped, and the Nasdaq dot-com bubble did not reinflate, either, for the very good reason that bubbles are never based on rational valuations--they are based on the psychological state of mania which cannot be reinstated once lost.

Consider tech stock Cisco Systems (CSCO), a well-managed "real company" which continues to make profits providing real-world goods and services. It currently trades at around $17.50 a share, down from its dot-com bubble valuation of about $81/share.

To "recover" its bubble-era valuation, Cisco would have to rise five-fold. That's not going to happen. Now that the mania has dissipated, Cisco is valued on more rational metrics like earnings, profits, etc.

The speculative mania always moves on to a new asset class. After the dot-com bubble popped, the speculative bubble moved on to housing. Now that the housing bubble has popped, the mania has moved to the bond market. When the bond bubble bursts (it's guaranteed that it will in the next two years, losing 50% or more in the process) then the only asset class which hasn't already been blown into a bubble is precious metals/gold.

In other words: those wishing to catch the next speculative mania should be buying gold and silver, not stocks, housing or bonds. "

This is a great article! It makes a lot of sense.

nyc10022 - where did I ever say that recovery means the return of all things illogical? My well-laid out thesis (stated here - http://www.streeteasy.com/nyc/talk/discussion/10062-where-were-going-from-here-the-bullish-argument), wouldn't have peak prices returning till about 2019 - so 12 yrs from the peak.