Manhattan buyers are smart. They saw the bottom before the stock market.

LMAO!
Congrats February buyers, you'll be underwater in 6 month!

sledge...the odds are sooooooooo against that buddy. The odds are sooooooo in favor of increased home equity gains. Inflation(with higher wages), the falling hard dollar, Q3 economic growth, and hordes of more available bank cash all are against you.

Congrats for overpaying, while we rent the same place for half the price. LOL!

Boy you bears just knock the sh-t out of me with all your hardcore reasoning and facts! I'm just getting up now. whew.

what about the 13,700 buyers that bought in 2007, the peak, that saw volume go parabolic? You think these guys are happy or upset that they purchased? Now of course you cant generalize, and many people buy a home they can afford and dont care if it depreciated 10%, 15%, or more, but in general, I bet most of these buyers, especially new dev buyers that signed contracts in 2007, only to close in 2008 or 2009, would rather have that move back!

oops, I lied, 13,430 people that closed in 2007 and Im sure many more that signed contracts but didnt close until 2008 or 2009. Im a big liar.

and their 30%.

Noah, when fear sets in people faced with choices, freeze up. Some however cannot. Some sellers have to sell but ALL buyers can wait. So, as the months drag on and buyers volume drops off a cliff, as it did, some sellers get panicky and just slash the price to get it sold. So what you have is 15-20% price drops on 75% lower volume. 75% lower volume! That is astonishing! So now bears say "Price drops! but that's ridiculous. 15% price drops on normal volume now that means something. But that is the nature of real estate buyers wait, have-to-sellers sell and when the worst has past buyers get back in and inventory gets sold. Like right now. 2007 buyers? Now that the worst has passed and pent up buyers are returning, equity appreciation will march higher quickly as it has done over and over in the past.

just like the stock market...big gains/losses on very weak, let alone 75% lower volume, is meaningless.

the worst is not over thats the thing. unless these green shoots are sprouting new investment banks to replace the 3 that are gone and the other couple that are crippled, sorry sport..manhattan RE best days are long gone and the rental market is screaming that. facts are facts and you cant deny what the rental market is showing. manhattan RE is slowly but surely deflating. thanks for playin!

steve, have a look see. msn no less.

http://articles.moneycentral.msn.com/Investing/CompanyFocus/coming-a-3rd-wave-of-foreclosures.aspx

oh good lord, i just realized what the title was. i'm beyond amused. yes nyc buyers are so smart. particularly those...

actually, usually you're harmless. in this instance you're a bit of a fucktard. please don't try to convince people to invest in risky endeavors, unless of course you'd be willing to cover any potential losses, and/or you are a CFA who is legally able to give truly shitty advice, but then give your name please. and if you're not a professional and don't need disclosure, just shut the hell up because your advice right now could hurt a bunch of people. hopefully they'd see you for what you are, but as we've discussed, americans can be deluded.

easy...i'm studyin for level 2 as we speak.

It's all good, marco_m. You pump, I dump.

Wow AR! That MSN article is breathtaking! If that's not a perfect storm, that's a Hurricane for the RE market!
I really hope for any buyers who just bought this season that they know what they're doing. I can't help but picturing them unloading their Penske truck, happily moving everything into their house, then barricading their doors and windows and praying ...

macro_m, i might let you sell me some shit and what not, depending. not depending on you, necessarily, mind you, but on the market. i'd never let alpie or stevef near my not-so-ill-gotten gains, ever.

oh and marco, best of luck. and sorry i always flip the letters and call you macro. that's probably not even close to freudian, but who knows.

"just like the stock market...big gains/losses on very weak, let alone 75% lower volume, is meaningless"

not necessarily steve. i view this as slowing momentum as the market tries to find a floor. this is an airless event in any market and when volume picks up it usually goes in the prior direction-in this case down, hard and fast. sellers almost always blink first. massive eye flutters and tears coming this fall.

steve,

i'm curious: given that you denied that the real estate market ever declined, how can you now claim that it bottomed? do you moonlight as a 'reporter' at the NY Times Real Estate section, which seems to have made the same call?

i really don't know where prices will be in six months. but i know where they are now, and they are way down from the peak. given that you have consistently denied the fall in prices, how can anyone take it seriously when start crowing about a recovery?

Are any of those online gambling sites which allowed you to put up a wager on ANYTHING still active? If yes, it's time for people to put up or shut up. I'm in for the first $500 for lower prices next February if someone can find an active site like that.

LMAS 30yrs... iwas just thinking that.. I was gonna go $1000.

AR, I usually flip Marco's name and call him Macro too. My sole instance of dyslexia, but there you have it.

In his weird way, Steve is sweet. He likes Manhattan and wants to pump it up. Delusional, but hardly the worst on this board.

evnyc, i know. steve usually just presents as an optimist, but he has his darker side, and was foolish the other day. not big of me to hold a grudge, but i'm still holding it a bit. actually, i have him on ignore, but once in awhile i have a little look see.

i wonder if they have thought about this.

http://www.ritholtz.com/blog/2009/06/job-openings-vs-unemployed/

hussman's on a good rant. he's in the short-term deflation, long-term inflation camp.

http://www.hussmanfunds.com/wmc/wmc090601.htm

Presently, however, the debate about the long-term economic fallout from this defense of bank bondholders is anything but academic. I recognize that I have been on a virtual rant about it in recent months, but the reason is that it is literally the most important fiscal and bureaucratic event that we are likely to observe in our lifetimes, and is very possibly the precursor to enormous future economic difficulties. You simply cannot have an economy lend out trillions of dollars in bad debt, and then make the lenders whole with public funds (while still facing a massive second wave of probable mortgage defaults) without destructive repercussions. There is very little chance, in my view, that the current downturn is over. We have enjoyed a nice reprieve – if over a trillion dollars in redistribution could not accomplish even a reprieve, it would be a surprise. It's clear that investors are hopeful that we can simply return to rich valuations, debt-financed economic expansion, and abnormal profit margins based on excessive leverage. From my perspective, this hope is as thin as those that we observed at the peak of the internet bubble, the housing bubble, and the profit margin peak of 2007.

nothing goes in straight line and there will be deals at every price. There is a difference between a countertrend pickup in activity embedded in a longer term adjustment process and a sustainable recovery. For 5 months on on UD, I have publicly acknowledged this counter trend (as in action pickup up after a move down) pickup in activity, and I also discussed how it has picked up steam as equity and reflation rally takes place in stocks, bonds, commodities.

people know where I stand on the bigger picture, and know that I am way less bearish than I was 18 months ago, yet not ready to get bullish for a sustainable recovery or that bottom is in. Im not trying to pick a bottom, let proctologists do that, just voicing my feelings on macro fundamentals and the less sexy new world we are now in. Brokers out there truly believe we are on the path back to peak levels, and Im not joking here.

happy..i never said anything about a real estate recovery I'm talking about an economic recovery and you are right I have never said prices went down. Whatever that means. My studios are higher than 2006 comps and flat versus 2007/2008.

envy I'm sweet and goodlooking.

SteveF, Economic recovery? do you live in NYC? I think it is good for you to get out of your studio once in awhile and get a reality check.

tell the retailers about the recovery, i'm sure they'd love to hear it.

The retailers, the travel agencies, the hotels, the restaurants, the coffee shops ...

Maybe the ship didn't roll over, but it's still a pretty bumpy ride out there. "Recovery" implies a return to previous highs. Not happening anytime soon. More like a slower tumble.

Are there reasons to step back from the ledge? Yes. But economic reasons for the average NY homebuyer to start splurging on real estate? Nyet!

When the Waldorf Astoria offers rooms for $199/night, you know something's wrong with the hotel industry in new York...

UrBandigs,

When does a counter trend become a real trend? At what point would you conclude that the bottom is in?

such a complicated answer, with so many variables due to unique nature of this recession. Honestly, something I just cant hammer out now, with 101 fever. I even had trouble doing a simple buy side analysis yesterday. Basically, I want more clarity that unintended consequences will be contained, clarity that rates wont surge and overshoot to upside, deficits are addressed, fed massive stimulus is reined in without major bumps, banks balance sheets are cleansed, jobs market shows strength and unemployment declines (we are still rising here), excess from boom is purged, local budget issues are addressed and how taxes are affected and where we are at that time, perceived quality of life here in city from major slowdown remains high or at least is not that affected, price/rent ratio getting more in line with norms,and prob a host of other variables. usually in boom/bust cycles, the parabolic period is retracted and prices revert back to mean. So that means what, 2002 levels or so?

Its just not a simple answer and one I certainly am not smart enough to answer. Ill change my tone again when there is more clarity on a number of the above items. I wont hit bottom, but ill get bullish when I feel bulk of adjustment is complete...after that I think we will muddle. problem is, many just assume we will rise back to peak levels, and Im not a believer in that

If people worried less about appreciation potential and more about calculating their rent/buy decision in an intellectually honest way...they wouldn't have to worry as much about when we are recapture the highs.

SteveF, you need to understand that Manhattan real estate, the US economy and the S&P 500 are not technically all the same thing. Stocks can be great which real estate is shitty...and vice versa. History has seen both...but you don't seem to let yourself get distracted by history.

Good point. If the real estate market works the same way as the stock then the bid and ask would not be 30% apart. In that case the listing prices on an average is probably at least 20% too high.

Agreed Rhino86. There are some of us that buy properties because we want to live in a certain place. I could care less about whether my apt appreciates or depreciates ... to me, it's all UNREALIZED GAIN/(LOSS). As long as I chose a sound place with good living fundamentals, I'm happy and glad to go about my living. R/E historically was never an aggressively growing asset (I think around 2-3% annually), so to all of you that are trying to make a killing in the Manhattan R/E market, keep renting and get your money into a riskier class of assets.

H units at grand millennium at peak $2.875MM... today (ask $1.875MM), NYC RE HAZ becomezeee the riskiest asset class (and I love risk/reward)... OBTW don't forget, plenty of people are sitting on infinite leverage (i.e. no equity cushion on the margin).

Meaning the schmuck who bought H unit at height (even if he/she paid $1MM down), is sitting on 0 equity, 100% debt. And if the schmuckie did 20% down ..... well welcome to the DEAD zone... where mkt is completely frozen until the mighty hand of CASH FLOW comes and smacks that buyer right onto the street......

If this market reverses price trend over any apreciatable period of time I will truly be gob-smacked. I'm not a RE historian but could such a reversal be possible in the absence of real macro economic behavioral change? What happened to the presistance of trends? Did that vanish last night while I dreamed of impending RE doom? I slept good but was not hibernating. I think the big RE circus is over but a lot of us are just milling about the tent. If the train realy left the station, how far could it get given the fuel? This should be the slow grind that was the late 80's-early 90's. Could their really be a rush to action? After the pent up demand is satisfied...what next? RE stagnation?
It's still too expensive to but for investment purposes. The buying, I'll bet is all primary residences. Have we forgotten that people buy homes because they need a place to live? I'm renting for the moment and can't wait to make a purchase. I have a great apartment (2Br.) in a hood I love at an ancient rent. Still want to buy, still going to OHs every week, still don't care if this is the most effective way to utilize my cash. We missed out on the giant home buying, remodeling, know my way around Home Depot, phase and, still envy the joy our friends experienced converting what ever they bought into their 'Barbie Dream House'. We are ready. The last few years and our superior intelegence forbaid us from diving in but, did little to extinguish our disire. We want our own walls so that we may pay contractors and artisans rediculious fees to forefil our designer fantacies. By then I'll find myself on some home renovation web site shitting all over contractors. (If I'm Nothing...I'm consistant) The problem we have here is we have the clear critical reasoning mixing with desire. I remember this issue when I was single. That desire thing is strong. Clear critical thinking does not always take the back seat...sometimes it gets locked in the trunk. The action out there (IMHO) is the people who wait but, have been waiting a long time. That desire thing sure is powerful.

ManhattanKing is making a good point. However, if you have to sell because of divorce, job loss, mortgage reset, relocation...etc. then the mkt is not going to be as kind as two years ago and the worse has yet to come for NYC Real Estate.

falco, not again my friend.

if this market were to miraculously turn around it would be because of the reflation efforts of the US gov't. that would just be another bubble, not any sign of a healthy or rational market. and i stay away from bubbles, particularly in illiquid markets.

but what will happen when unemployment hits 10%? next year when taxes on everything from wine (how dare they) to water to taxi rides to state income to federal income hits, and hits the higher earners harder? when the CRE and credit card loans spin massively out of control, and the MBS woes spread further and further into prime territory? personal bankruptcies just hit their pre-2005 levels and seem inclined to increase quite a bit further. who do you think will pay for the truly necessary costs associated with the health plan? we're broke, falco, we have just borrowed some money to keep the band playing a little longer.

falco, yes buyers have waited a long time since the credit crisis started in July 07. That's 2 years of pent up DESIRE. The Humans can only hold out for so long :) Now that this depression is not to be, people must have intense anxiety and desire buildup. Just like you. The only diff is they bought or are buying.Good Luck.

Pent up desire is an ASSUMPTION on the demand side. Inventory has gone up by a considerable amount on the supply side and that is a FACT!!!

AR said it best: "we're broke." we as a society have run up bills that we cannot pay. we don't have the political will to cut back. so either we go bust or we find ways to raise taxes that sneak in everywhere. this is not the end of the world....it is the end of a part of our way of life that hasn't made sense for quite a while.

six salad shooters anyone?

"and know that I am way less bearish than I was 18 months ago"

This is serious question, I'm not just busting your balls: where were you 18 months ago and where are you now that makes you say this?

"SteveF, you need to understand that Manhattan real estate, the US economy and the S&P 500 are not technically all the same thing. Stocks can be great which real estate is shitty...and vice versa. History has seen both...but you don't seem to let yourself get distracted by history."

Especially when, at least for some people, it is an absolute "one or the other" investment decision. That is, people pull their money out of the stock market and put it in RE when they thing the RE market is good and the stock market is tanking and vice versa.

Don't forget how most people buy the residences: they do extensive research into neighborhoods, schools, the economy, price trends, buildings and their financials, loans, interest rates, resales, Sponsors, price per square foot, etc., etc., etc.

And then they buy the pretty one.

and these days (at least 6 months ago!) it was all about the stupid amenities. who cares if the apartment is tiny...there's a playroom, a lounge, a pool room, etc. i will never understand that.

cc, i once posted that i was completely and utterly convinced there was a bubble sometime around 2005 (had suspected one in 2004), when a new development in Manhattan Valley was selling at around $1000 psf for 9'x10' bedrooms or some such. insane.

30yrs : "This is serious question, I'm not just busting your balls: where were you 18 months ago and where are you now that makes you say this?"

what do you mean? Have you been reading urbandigs since mid 2007? If so, you should know exactly what that statement means. But if not, I dont get the question? Right now Im sick at home.

Oh, i think I get it.

Ok, let me try to answer this way, and I guess I should have said 20 months ago:

18-20 MONTHS AGO - S&P was at 1500, Manhattan was trading at peak levels. I was VERY BEARISH and described in detail, almost daily on UD, the reasons why I thought this credit crisis was not contained, and why it was way way worse than many thought. I thought stocks were wrong, way overpriced, and not discounting what was happening in credit markets. Fed started to act, stocks loved it, and people yelled DONT FIGHT THE FED as they cut 100bps by end of 2007. I thought a severe correction in equiies was ahead of us, and that Manhattan prices were not reflecting the major problems on wall street or in credit markets, yet they continued to trade near peak for a few quarters. Although I noticed low ball bids in mid 2008 and cold feet and a slight drift down, the market didnt really drop until after Lehman and bids disappeared.

TODAY: Tiered adjustment based on price point with high end way more affected. Stocks down about 60% to lows, and about 40% today from highs even after the 40% rally. fed/fiscal/monetary stimulus went BESERK! Money printing like mad! bailouts galore! Accounting rule changes to benefit banks! 19 facilities to help banks and counterparty bailouts to help banks! System engineered to recapilitize banks! We saw major correction in equities, uber major stimulus, major pain on wall street, and major adjustment so far in manhattan, especially in higher end that so many once thought was impossible (yes, stevejhx and I argued relentless in late 2007 and early 2008 even before prices started to fall that it was coming and arguments from bulls were fierce and emotional - hi spunky!). Since process started and to see the crazy stimulative moves made by fed/govt to stop deflationary spiral, I am LESS BEARISH than I was when S&P was trading at 1500 and Manhattan trading near peak levels.

not ready to get bullish in the sense that we have a sustainable recovery ahead.

does this explain? my head is all cloudy so I hope I made sense

a)"Have you been reading urbandigs since mid 2007? "

I've been reading urbandigs since about 5 weeks ago and then only when it's linked to here (sorry). it seemed easier to ask for a synopsis than go read 2 years of blog posts ;).

b) "does this explain?"
Somewhat, but I'm not sure I follow the conclusion you reach from the statements you are making unless you're simply saying something like "I thought the market was going to go down 50% last year. It's gone down 25%. now I think it's only going to go down 25% more".

c) feel better.

well, your not going to go and read back to all that stuff, but:

a) read this from OCT 2007 (only 1 piece, but probably the clearest statement on equity concerns from credit market dislocations that I discussed in detail many times before this):

http://www.urbandigs.com/2007/10/credit_crunch_part_ii.html

b) again, I guess you need to go back and read my stuff. I cant recall offhand what post I described for the impact on Manhattan, but I never discussed any specific target adjustment range, just the nature of the crisis and why I thought it was so severe and will ultimately hit our markets. But, yes, you kind of hit it that I think a good portion of the adjustment is now behind us. Wait a few months, you will see some high end deals, classic 6s, 7s, 8s, closing for prices that are 35-40% below peak. Not all of course. Not every seller hit a bid.

c) thx! signing off

30yrs, you must read UD. A lot of what you post is very related to it. I am surprised that a smart realtor or RE consultant didn't get to read UD until a few weeks ago...really...

"30yrs, you must read UD. A lot of what you post is very related to it. I am surprised that a smart realtor or RE consultant didn't get to read UD until a few weeks ago...really..."

Alternate explanation: I don't need to read UD because 2 reasonably smart Realtors withe the same access to information come to mostly the same conclusions? i don't know how to say this without it sounding like I'm putting down Noah, who appears to be a reasonably intelligent and nice guy, but i really have yet to see anything on that blog which I thought was "news" **TO ME**. I get all the same data (if i want it) and more, and in a from that I can do what I want with it because I get the raw data, not charts. And I can't fault Noah, because if he wrote what I would find challenging, it would be so far over the heads of his average reader, he would be cannibalizing his own readership. In addition, he's CONSTRAINED from talking about a lot of stuff which I have knowledge of, which really hinders his ability to talk a bout a lot of stuff which I might find challenging. Plus I suffer from the same malady that just about anyone who has been in RE for 30 years does: no one can tell any of us anything about RE, period. We're old dogs and we are immune to learning new tricks. An attorney/developer friend of mine recently came up with a good term for it "The inability to come out of the basement" and i instantly kne what he meant.

Old time closings on buildings used to devolve (always, it seemed) into arguments about how much No.2 heating oil was left in the tank with the seller saying that's what's in there and the buyer screaming :fine, pump your sludge out and keep it). now, even though things are much more expensive, lots of landlords are still used to having mostly rent stabilized tenant paying below market rent and looking to squeeze the last nickel out of every building by running the boiler a little low, etc (that's where the 'get out of the basement' phrase cane from)

I don't think you should read it Noah's blog to be informed, no doubt you have your own smart conclusions. I think that UD means, together with SE, a change of paradigm: more power to the buyer. I feel he is a big player in a community that has being formed, and time will tell how he is going to articulate his abilities in a new format. Also, Noah has an ability to be liked. Your posts are full of valuable info that I appreciate, but you come across a bit more full of yourself...Please don't take this wrong, I like your posts a lot, but I don't like the way you stated: "where were you 18 months ago and where are you now that makes you say this?" to Noah. I think that any RE person that keeps informed knows about his blog. It is an important part of RE culture now that it's getting more open and transparent.

> Congrats to you savvy Feb buyers.

The last 10 sets of "savvy" buyers Steve pointed out lost their shirts.

He's like perfitz. Whatever call he makes, do the opposite. Steve seems to be a perfect inverse indicator.

Steve, were the all time peak number of buyers "savvy" for buying and then losing 25% in a few months?

Actually, define "Savvy for us. Does it mean the same thing as "stupid" in your book?

Wait, didn't Steve admit he was one of the idiot buyers in 2006 and 2007?

And suddenly he knows when the right time to buy is?

Sucker.

"I like your posts a lot, but I don't like the way you stated: "where were you 18 months ago and where are you now that makes you say this?" to Noah."

Wow... talk about being sensitive.... all I did was ask a simple, direct question. If I can't ask someone something like that, one of us is on the wrong site.

And look, I know everyone likes Noah and from what I have seen, he seems like a nice guy and i like him, too. But to be blunt, if we're talking about reality (even though I hate using alexa because their data ain't the best) this gives you some idea of how a statement like "I think that any RE person that keeps informed knows about his blog" looks as far as actual traffic is concerned:

http://alexa.com/siteinfo/urbandigs.com+curbed.com+propertyshark.com+streeteasy.com+corcoran.com (you may have trouble finding the line for urbandigs.com because it only shows up as a few little blue blips along the bottom). And there's no need to get in a tizzy because "I'm attacking Noah". I'm not attacking Noah. Just simply pointing out that just because a certain fan group religiously follows some blog, it doesn't mean the rest of the world does.

nothing wrong with you asking...look, all I have been doing since late 2005 is blogging about how I feel about economy from macro standpoint, markets, tips & tricks for buyers/sellers, credit markets, trends, etc.. all with hopes that people can get a REALITY CHECK in an industry that is known for sugar coating and babbling about only going up and never going down. Thats all. Whether you choose to read is your call and I certainly am not the smartest guy in the world, and dont pretend to be. The blog is a window into what I am thinking on any particular day, nothing more.

By now, the hope is that people at least have some trust that I what I discuss is not fraught with any agenda in a very sales oriented industry.

Noah, did you see the price break to $1000/ft at one of the Avonova apartments at 219 W 81? What are these condos less than 50% sold going to do in this financing environment?

no, I didnt...been so sick here. finally feeling a tad better, but this has thrown me around for almost a week now. brutal. Ill check it out later, thanks. Not sure what they will do, be flexible on pricing is only option.

30yrs, you can't compare Noah's blog to a search engine like SE or a top broker's site. Obviously the amount of visitors will be minuscule compared. Noah is well know to SE users, which you also didn't "discover" until a few weeks ago, like many other brokers. Again, I like what you write, but most of the stuff you are posting as per market fundamentals has been posted here for years now, so the tone of "where were you 18 months ago" sounds a little snotty. If I didn't read SE or UD, I would have bought a year ago. I am very happy I didn't. If you were posting back then, you might have saved people from making a big mistake too.

Also, a small group religiously listened to Roubini 2 years ago, but the great majority didn't. If they did, maybe we all would have been less hurt.

Or Shiller.. .who has been right several times now.