NYC properties going down?

"RE kept going way south (-40%)til mid 88..NYC RE hung on the lows til early 91."

I'd like to know where these figures are coming from, because they certainly do not reflect what happened in Manhattan RE in that time period.

"Just for kicks, take a look at this list:

http://www.sdlookup.com/Foreclosure_Results-29+0-La_Jolla"

Actually, I'm surprised at how SMALL that list is.

Better yet, go here: http://www.mbaum.com/SJB/viewSalesSchedule.do and pick a start date of today and an end date of 9/17/2009 and see how many foreclosure sales are scheduled by ONE SMALL FIRM for this summer. now this is just a small portion of all the foreclosures already scheduled because, as i said, this is just one SMALL firm. Figure they have ?5%? to ?10%? (and I may be WAY on the high side there) of the foreclosure business in NY.

"AR - remember that almost all coops required people to put 20% down and many require more than 20% down. If you have owned your coop for 5 years you have also paid down the mortgage a bit more. To say that quite a few coops bought from 2004 on are underwater is just not accurate."

But you have to add back in everyone who did a cash out refi (or second mortgage), which is NOT an insignificant amount. There's is a foreclosure sale currently scheduled for a unit which was bought for $350,000 and cash out refi'ed for approximately $725,00 when it was worth $950,000 according to some appraisal and now (obviously) isn't worth the approximately $740,000 plus closing costs it would take to get rid of it. (Sorry, it's too integral a part of my biz to disclose more than that). And NB the "according to some appraisal" part because on sales, even if you can get an appraisal of double what you are paying, your laon amount is constrained both by the bank and the coop to whatever their LTV/cash requirement is. but on a cash out refi, there's no definitive number (i.e. sale price) so whatever you can get everyone to go along with is the number. And in the "bang bang" 2000's, lots of Coop boards thought it was great that values were going up so much in their buildings that they ignored a bunch of appraisals which were "obviously' too high because they though somehow it meant values in their building would be up.

this is certainly the case in our building and anecdotally from many friends. many, many people who bought years ago owe substantially more on their apartments than they originally paid. i have mentioned before that the managing agent of our building convinced the board (much to my personal chagrin) that our central mortgage was too low; a lot of money was borrowed at much lower rates than previously but much of those dollars were spent in cosmetics that began aging immediately.

never underestimate the power of the unrealized yet not unfactored in gain.

"The long term real estate owners, such as those who haagen suggests, won't be selling so quickly. The other buyers who bought to flip or to rent out at high prices, as long as they themselves aren't in distress, will likely hang on and rent them out cheaply. Which all means that there will be a lot of condos on the market for rent, at some really good prices, probably making the rent / buy equation, for the short term, very very attractive."

Sorry to be rude, but.... DUH!. Long term holders of RE who didn't sell when prices for sale went up 500% but instead kept renting their units aren't going to turn around and sell now that prices have come down? I'll alert the media. (again, sorry for the sarcasm, but........).

The other buyers who bought at high prices to flip will hold and rent out cheaply as long as they aren't in financial distress? Well, yes, BUT who among them isn't going to be in financial distress? When you are carrying a unit at $15,000 a month and you are "renting it cheap" at $7500, who isn't going to be in financial distress just by losing $90,000 a year? Sure, some people won't be, but an awful lot more will.

I'll tell you something else that is going to bite a lot of people in the ass that I haven't seen anyone talk about: owners in distress will rent out their units for less than it costs them to carry, pocket the money, not pay the carrying and recoup some of their loss that way. And then when the unit gets foreclosed on, those "lucky" renters who got those "great deals" will find that their leases aren't worth the paper they are written on. And if you think that this situation is far off, I just got a call today from someone asking me what to do because someone had rented a Coop unit, the first month's rent had gone to pay the coop maintenance arrears so the coop would approve the sublet and the tenant is moving in and everyone just found out that the unit is up for auction this month.

that sucks....

very interesting....none of this brings out the best in people, does it?

"Geithner's rent doesn't cover his nut"

You don't know that.

"Why are sellers entitled to triple 1990s prices?"

Because the 1990s, more specifially, the early 1990s, were nearly 20 years ago. EVERYTHING has tripled in price sine then. Gas. Food. Entertainment. I remember when I vistied Florida around 97-98, I paid 98 cents for a gallon of gas. I remmber in 2000 being able to buy 10 lemons for $1 in Chinatown. The subway fare 20 years ago was $1.25.

f'n alpine... it's circular... housing prices goes up => increase wages to pay for that => MTA needs to raise fares for their salaries = > grocer rent goes up => charge more for lemons....

The bitchin part is anyone that can charge more and make it stick will (i.e. taxes, MTA, docs, bk lawyers etc)... everyone else sitting on debt and depreciating assets getz their financial ruin handed to them by the bucketfulls!

deflation, then inflation with a whimsical f'n up of allocation of winners and losers.... just like in the RE bubble yrs.... it's not too late... position yourself... sell your f'n 6 salad shooters and stop eating at McD...

"CBS reports that a condo developer in bklyn just signed a deal with the city to turn his unsold units into a housing shelter...he'll get $2700 per month, per unit from the city. Apts. include granite counters, etc..."

Does anyone remember when Trump was trying to empty out the Barbizon Plaza Hotel so he could turn it into Trump Parc so he said he was going to put homeless people in the vacant units and was slapped with a tenant harassment suit?

Have wages tripled too since the mid 90's Alpine ? I doubt it...

w 67th: interesting as always...first there was inflation proof, then there was recession proof, now, what will be deflation proof?

as you said:

1. taxes
2. other kinds of taxes like mta fares
3. anything else for which there appears to be no choice.

p.s. not real estate purchases--particularly with rental options.

u said it brother (CC)...

Alpine you dope, I do know his rent doesnt cover his nut because it was in the article you posted...but apparently didnt read though.

alpine does well for a 12 year old new jersey girl.

back to w 67th: must confess I am always trying to figure out the business angle....what else would appear to be deflation proof?

certain commodities. particularly in times of tight credit, and of course you know that this time of "repaired" credit spreads hides the fact that few can get the credit they need.

or you could just short the piss out of the ten year.

can you through out a few examples?

CC.... in general terms... all of the economy is going thru a bit of the deflationary period so its a little more of not lowering prices as much as your competitor... relatively speaking some of the REITs that have at its core long term leases w/ medical and/or gov't as the bulk of its tenants (like HRP.. fair warning.. I've been in and out of this a lot... and in fact over-smarted myself and missed the 20% in the last 2 week)... but like the 10% div.... even if they cut back 50%.. you are at 5%....( but watch it awhile... it may pull back -shrug- but who knows :) )

I also like some of the medical technology space that can and will bring efficiencies (electronic data mgmt etc.)... (one I cannot mention... will explain over a beer at some time hopefully)... Obama is gonna throw a wad of cash at it.

But generally, like in all downturns.... things that a salesman can go to a customer and say buy our stuff and your COGs (cost of goods) goes down 2% or 5%.... it can be in farming equipment or more efficient jet engines....

But CC, I am almost 95% in cash..... this rally just doesn't smell right to me.... and whereas you can almost never time the equity mkts (I know I know... isn;t that what i'm doing? haha), I'm a RE guy at heart ... and believe there will be tons of opportunities all over in the next few years...

Pls... it's an anonymous board and if I cared about you.... I wouldn't give you any financial advice...... :)

i'm sure many are better at this than i am, as i don't have the opportunity to do anything with this info. i'll poke around and see. there are a couple of decent agg funds(soybeans maybe, on an sole commodity level, but that's based on old knowledge). i'd look into mining stocks. investment in energy resources, is, paradoxically and yet not, cratering. i'll try to find some better quality arguments on the energy issues, but there may be some short to medium term plays there that would do you well. and there are some very savvy REIT funds that could do you some real good going forward. there is always opportunity in disaster, it just might take awhile. start looking at emerging market funds, but not necessarily China. Look at funds that invest in Africa, South America, those that missed this boom, and those asian countries that did well but didn't have tremendous leverage or an economy highly reliant on exports combined with relatively high employment costs.

if you wish to do a bit more of the day trading, i'd follow the TA people on www.ritholtz.com. a bright group, not every one is right every time, but they've got some pretty impressive records. and some hugely interesting commentary. andy t is great, but he's as bemused as hell (my supposition) so he hasn't been around much recently.

and there's always shorting the piss out of the 10 year. a blended muni fund might do ok for you, particularly now that so many munis aren't doing so well. the yields should be getting better (haven't been following) but the risk is also. anyone who thinks some municipalities won't start defaulting (unless too big to fail) is deluded. be careful, stay nimble.

with all due (and continuing) respect:

was not going to invest based on this...was just curious to hear thoughts. you raise interesting points which get me thinking. real estate has always been a hobby/obsession. brings out the voyeur in me...know you're getting older when you're more interested in pictures of houses than naked women (not quite there yet but merely the thought that there is something beyond naked women is a sure sign of increasing age)

have done ok with starting some businesses...always looking. more fun to start and move on (at least with business!)

of course not, cc. just wanting to get some ideas of market thoughts. and w67th, i respect cc's intelligence. not trying to lead anyone anywhere. unlike some real estate experts.

posts crossed...was responding to w67...

and i'm 100% in cash, if you also count term life insurance as cash.

cc, he likes nice golf clubs and pretty boats. but got it.

we're getting there. to cash, that is...except for large RE committments.

cc... i have a wild RE venture that I was thinking about... like to hear your thoughts.... shoot me an off line email... w67thstreet@gmail.com

Yeh, I know what you mean.... starting a business is the fun part :)

It might take me a few days to get back to you, but :)

maybe AR can chime in :) also....

will do.

w67th, right now i'm a pessimist in terms of conventional investing, but the cash is building up. might be interested in something different (as long as it wasn't christened positive carry).

Positioning for inflation? I guess no one watches or understand the markets these days...

You guys are so out of it, it's not even funny. No wonder you guys spend your whole day in a message forum.

L...a...te...r...z....

wait...you promised to leave...

Chorizo, not even a random link to post to back that up? I'm surprised
You're getting lazy(ier)

Alpine you dope, I do know his rent doesnt cover his nut because it was in the article you posted...but apparently didnt read though.

hahahahahahha

Just last week i was arguing with you morons about signs of inflation in this economy. All you idiots (AR, CC, 64WhoreStreet) were crying about how the deflationary forces are still in play and there's no sign of inflation anywhere.

How a few days can change so many things.

"wait...you promised to leave..."

Just got home from a long day of work unlike you fat, hamburger eating, tran fat loving, obese couch potatoes...

what do you think you're saying?

p.s. why are you back?

that's not nice chorizo

but why did you come back...you went off with a big swich in a huff. wish you would stay there.

Want to hedge inflation...

How bout open a brokerage account that you can trade future contracts and pick up some CRB futures. You can't play inflation by only one sector boys and girls. If you're going to roll..you'll have to roll with all of them.

http://stockcharts.com/h-sc/ui?s=$CRB

the only thing i want is for you to make good on your promise

ericho lied? NOOO. i thought he was a person of integrity.

hey, give the guy a break. It is hard to leave websites. It's like giving up alcohol or tobacoo. But it can be done. In December, I left Zillow after posting there for 18 months, making me the #1 poster there.

our loss, their gain.

stagflation. i never said there wouldn't be commodity inflation. if you will recall jerkico, i have always said that due to the government's inability to allow deleveraging, there's plenty of cash looking for a place to rest. bubbles. i myself don't invest in bubblicious things, when things go wrong it can get so ugly. i'd really like to be a day trader. but i can see where if you don't day trade the bubbles might be where the income could be made. and some trades are, of course, ery short term. you are an imbecile.

let's follow this through. we had high food and energy costs last summer. inflation? not so much. what will be the consequences of high commodity costs, the ten-year puking, and rates going up? some agile traders will make a lot of money.

but the average american consumer, who spends much more on necessities than the wealthy? they'll be eating beans instead of meat and only leaving their homes to travel to work, if they still have a job. that's the recipe for sustained growth. and rising real estate prices.