So, I just got back from Florida...

I think bank-owned condo buildings will be the 2010 story in Manhattan.

Cash will be king!

topper it might take a couple of years before you can put your cash to work for you in bank-owned condo buildings.

i live near three or four new developments that broke ground in 2008. cranes still craning, workmen still working. it's lunacy, of the lowest and highest orders.

SO, I JUST GOT BACK FROM FLORIDA...and, boy, are my arms tired. buh dum.

I'm not a kool aid drinker, but fla has that kinda history. Massive kash 4 keys will not occur in NYC.

Tenemental, I'm with you. The scariest part is that there's so much incentive to hide and obfuscate these numbers that I'm not confident that anyone has a real grip on what's going on. Meanwhile, everyone's whistling past the graveyard. The same thing seems to be going on in California. Given their unemployment numbers, how are people going to be able to continue paying their mortgages?

http://latimesblogs.latimes.com/laland/2009/05/default-notices-drop-in-april-foreclosure-sales-up.html
Highlights:
"Notices of Default, the first stage in foreclosure, fell by 18% in April from March. There were 42,675 Notice of Default (NOD) filings last month....Housing market watchers have lately noted a growing backlog of foreclosures – defaults had been rising, but the number of homes actually foreclosed dropped. It’s unclear whether lenders were overwhelmed by the volume, were deliberately delaying foreclosures to either continue trying to work out deals with borrowers or were trying to keep from further flooding the market with foreclosed homes for sale. It looks like April showed signs of movement in clearing the backlog. Whether the backlog clears promptly and in an orderly way remains to be seen."

dwell, three times I typed that punchline, then resisted. Discipline, dwell, discipline.

"cranes still craning, workmen still working."

AR, to be mid construction now really sucks. But, what can they do? Worse to leave it half built. I'd hate to be in their position, but, what can they do? Timing stinks.

Master Alan,

I have strayed. Please have mercy on grass hoppah.

So, I went to the men's room in Paris & the light bulb was out, so I said "Garcon, john dark".
Sorry, Alan, girl can't help it.

some of them don't have any structure yet. still working below ground.

the banks continue to lend them money because they don't want to write off the amounts they've already spent.

I figure all the buildings that were started mid-2008 (for tax abatement reasons) should be finished by the end of this year. I should think that by the end of 2010 things would start to unravel big time.

Is my timing off?

Sounds right to me.

AR,

I hear you. But, what's the best choice? Stop now or go forward? Either way, they're screwed, no?

The problem, dwell, is that it seems as though in the end we're screwed, you and i, because we'll have to cover the bank's losses, and they'll likely be higher if they continue.

topper, it's usually two or two and a half years from breaking ground, but the banks and the lawyers always have to muck things up with those bankruptcy proceedings. and then i wouldn't want to purchase for awhile, until the building is somewhat full, for many reasons.

about - as in west 76th & Broadway perhaps . . . ?

lp, i'm trying to visualize, but it's not coming to me. help my ancient memory out here.

re 76th & Broadway:

http://www.observer.com/2008/real-estate/upper-west-side-building-trades-36-5-million

and

http://a810-bisweb.nyc.gov/bisweb/JobsQueryByNumberServlet?requestid=4&passjobnumber=110359727&passdocnumber=01

Even before they're out of the starting gate on construction, the developers have plonked down $111.5 million for what is in essence the land to build less than 250,000 sq ft, i.e., $450 per sq ft.

What's the cost of construction per sq ft and at what price do they have to sell to recoup their investment?

onthemove, thanks.

some were trading as high as $1000 psf (although that was a conversion, so the structure was already built). i don't have the details, but i recall a few that traded for close to $600 pbsf.

the cost of construction used to run about $300 psf pre-bubble, depending on quality, but i think it went way up 2004-07, and even more so when everyone had to become luxury "high end" apartments. costs are generally less for the bigger apartments (only one kitchen and fewer baths per sf), which is one of the reasons all those family-sized apartments started springing up on the uppers. and why downtown apartments have those assinine one wall kitchens. cabinets are expensive, just get rid of some of them and call it trendy.

downtown the land was bought earlier, and much more cheaply. they could often afford to do smaller apartments (with those stupid kitchens). before the sales price bubble occurred, the land price bubble hit us. that's why i got out of dodge in 2004.

the problem with "moratoriums' on foreclosures is the usual "irony" (strict definition). When you declare a moratorium on foreclosures, you're telling everyone "no matter what you do, you can't be foreclosed on". A very common result is that people who actually were paying their mortgages, even though with pain, stop paying and spend the money on other things. Then, the moratorium eventually gets lifted and now they have a "balloon" of the payments they skipped, which they CAN'T pay even if they wanted to. So now, people who wouldn't have gotten foreclosed on are in default as well as the one's who were already. Big mistake.

It's similar to a situation we saw a lot when Coop owners rent their units out and then try to sell them when the market goes up. So they give a rent break to the tenants for the hassle of showing and/or moving on short notice. But odds are since the lease is at least a little old and the market is rising, the current tenants can't find anything to move to which is anything like what they are currently in for anywhere near the (double discounted) price they are paying. So, rather than greasing the wheels of an easy sale, they dig in and try to hold the owner up for various things (lump sum payments to actually move when they promised, etc.). The owner intended to make things easier by lowering the rent and making life easier on the tenants, but the result was the exact opposite. My bet is that moratoriums on foreclosures will end up exactly the same (and if there is one thing which I am truly an expert in, it's the psychology of people who have gotten themselves in trouble with home loans, having dealt with literally thousands of them over the years).