We could have 6.5 Million Foreclosures by mid 2011

sorry to disappoint you, but those 6.5 million foreclosures (an overblown figure unlikely to come true, IMO) won't be in Manhattan and will therefore have no affect on prices here. Of those 300,000 foreclosures, what percentage do you think are in Manhattan? I'll give you a hint; the number looks somethign liek this:

0.00000000000000000000000000000000000000000000000000000000000000000000000001%

No I see why so many people block your comments Alpine292. Your posts make no sense and bring nothing to the board. I know you're obviously a miserable human being jealous of anyone who can afford to wait until the market continues to drop to buy but why not get some therapy for that instead of wasting your time posting here? I am now included in the list of people who block your posts. I gave you the benefit of the doubt but they're right. Nothing you post is worth reading.

Here's another way of looking at it: there haven't been many - almost no - foreclosures in Manhattan - yet.......

If there are 6.5 million, odds are that there will be at least a significant gross number of them here. If you think there has been downward pressure on Manhattan apartments already, add a few hundred foreclosures (.003% of 6.5 million) and see what it does.

nobody here blocks my posts first of all. But if you want to filter out all the mean miserable people who disagree with you, go ahead. And sorry for telling you info you don't want to hear. Because of the lack of speculation and the strictness of co-op boards, Manhattan has traditionally had a very low foreclosure rate. Even if the prediction comes true and there are 6.5 million foreclosures, very few will be in Manhattan. And as far as waiting, what are you waiting for? For interest rates to rise? If you look at the national data (Case Shiller Index), it is evident that the bulk of the declines in housing values has occurred.

"lack of speculation"

So, Alpine, all those people who bought condos with the intention of flipping them weren't speculators? And while historically coops have been the majority of New York housing stock, during the boom years there were a ton of condos built. Those are a big chunk of your possible/probably New York bankruptcies, and coop boards have zero control over them. Interest rates will continue to hammer prices. National data doesn't apply to New York, unless you consider that the coming ARM problem is going to further kneecap the banks.

true, but some condo boards are restrictive. Some have a baord approval process, while most of them require 10% down. In fact, about a year ago, there was an NY Times article about condos becoming nearly as restrictive as co-ops.

30 yrs & evnyc I totally agree with you. In the video footage attached to the link I originally posted here, Rick Sharga, vice president of marketing at Realtytrac, addresses both of your points. He also explains why we shouldn't be optimistic by May's foreclosure numbers. I'm so grateful I'm in a position to wait before I buy.

Realty Trac is a company that profits off of foreclosures. For this reasn, Realty Trac will be the very last people on Earth to be optimistic about foreclosures since, the more foreclosures there are, the more $$$ they make.

Foreclosure figures overstate crisis

The Atlanta Journal-Constitution Published on: 10/14/07

A California company recently reported Georgia foreclosures had jumped by an alarming 75 percent from June to July, branding the state with the nation's second-highest foreclosure rate.

But there was one problem: The numbers were wrong.
RealtyTrac, one of the nation's leading sources of foreclosure statistics, reported 12,602 July foreclosure actions for Georgia. But that total counted more than 2,000 properties twice, and sometimes more, The Atlanta Journal-Constitution found in a review of the data.

There is little dispute that Georgia faces a foreclosure crisis, but the company's July report overstated the magnitude of the problem. After a preliminary investigation, the company said Friday that its data show foreclosure filings in July actually rose by 14 percent — not by 75 percent.

A RealtyTrac executive acknowledged the mistake in an interview Friday.

"What we're doing isn't perfect," said Rick Sharga, the company's vice president of marketing.

"It's the best we can do, and we keep trying to get better."

Sharga said the Irvine, Calif., company would correct the Georgia numbers and determine if a similar problem has skewed its statistics for other states.

Problems with RealtyTrac's statistics didn't begin or end with the July report. The Journal-Constitution also identified problems in the company's more recent Georgia data.

Last week, RealtyTrac reported 11,926 Georgia foreclosure actions for September. But the newspaper found that count included more than 2,200 duplicate entries.

Sharga said the problem appeared to be linked to its use of a new data provider.

"We don't minimize the responsibility of issuing these kind of statements," Sharga said. "We try and be as diligent as we can."

Economists and some state officials have questioned RealtyTrac's methodologies before. Even so, the small California marketer remains the national media's go-to source on foreclosure statistics. Even Congress, as it tries to quell the nation's mortgage meltdown, relies heavily on the data.

That's because no one else offers frequently updated foreclosure statistics that drill down to local areas.

"There are very few sources," said Israel Klein, spokesman for the Joint Economic Committee of the U.S. Congress.

RealtyTrac said it also provides data to the Federal Reserve, the Federal Deposit Insurance Corp. and the FBI.

At a time when mortgage failures top the public agenda, no one knows the precise scope of the problem.

No government agency collects nationwide foreclosure statistics. The Mortgage Bankers Association reports quarterly on delinquent mortgages and foreclosures, but its survey covers only 80 percent of mortgages and does not include a breakdown below the state level. Other organizations use credit files and lender surveys to produce estimates.

Some experts worry that the media and lawmakers rely too heavily on the company's data.

"Their numbers do overstate the level of activity, and it's affecting public policy," said Douglas Duncan, chief economist for the Mortgage Bankers Association.

Mark Zandi, chief economist at Moody's Economy.com, said the government should track foreclosures itself, because available data are "completely inadequate. ... It's impossible to make good policy if you don't have good data."

Zandi said lawmakers need more than simple foreclosure tallies; they need to know what types of loans and borrowers are failing.

RealtyTrac purports to capture more of the nation's foreclosure listings than any other source. That requires a massive data collection effort from thousands of courthouses and newspapers.

"It's a very difficult thing to do well and get right," Zandi said. "They are dealing with 50 different states, all with very different foreclosure processes."

A foreclosure is a process, not just a one-time event. Lenders in most states must take several steps before repossessing a home, usually including more than one public notice. Homeowners can avert foreclosure by filing for bankruptcy, refinancing or selling the home.

In many other states, which require court action before a foreclosure, court records are a reliable source for foreclosure starts.

But in Georgia, no court or government agency gets involved. The only way to compile foreclosure statistics is to review legal notices in local newspapers advertising foreclosure auctions.

Even Georgia's top banking official has no idea how many foreclosures are pending in the state.

"We don't have an accurate way to gather that information," said banking commissioner Rob Braswell.

Difficult comparison

How Georgia and metro Atlanta foreclosures compare to the rest of the nation is unclear.

RealtyTrac's 2007 reports have ranked Georgia among the top 10 states for highest rate of foreclosure actions.

The Mortgage Bankers Association's most recent report ranked Georgia in the top 10 for past-due loans and foreclosure actions.

Moody's Economy.com ranked Georgia 21st in the third quarter of 2007 for mortgage loan defaults, placing it below the national average. But Economy.com ranked Georgia in the top five for its rate of mortgages with past-due payments, indicating that a higher rate of defaults may be coming.

RealtyTrac, formed in 1996, is a relative newcomer to the world of real estate statistics. It provides lists of foreclosed properties to consumers who would otherwise have to wade through court documents or newspaper records to find potentially bargain-priced homes.

RealtyTrac's monthly reports, widely cited by news outlets, bring visibility to the company's services and drive traffic to its Web site, where potential home buyers and investors may review local foreclosure listings. The company also offers a subscription service and sells data to investment and financial firms.

The nation's mortgage meltdown has drawn more attention to RealtyTrac's reports than the company ever envisioned.

"If we had known the report was going to get this popular and have this much scrutiny, we probably would have built it with more hard and fast rules in the first place," Sharga said.

'Very confusing'

Some experts have questioned the company's methods for some time.

After RealtyTrac consistently placed Colorado near the top of its foreclosure rankings, state housing officials started compiling their own data last year. Their tallies were much lower than RealtyTrac's.

"I think the way RealtyTrac presents the data can be very confusing," said Ryan McMaken, who supervises collection of foreclosure data for the state of Colorado.

In Colorado, a lender must file a notice announcing its intent to foreclose and a second document if the sale takes place. Colorado found that RealtyTrac counted both steps as separate foreclosure filings, even if they were tied to the same property.

"They report, in many instances, every formal action on a single property as a new foreclosure — that's double- and triple-counting in many instances," said Duncan, of the Mortgage Bankers Association.

RealtyTrac maintained the numbers were accurate and offered a way to measure every action in the process, but critics said it falsely inflated the numbers.

In response, RealtyTrac recently started offering two figures in some reports: total foreclosure actions and total unique properties involved in foreclosure actions. The change was widely praised.

In Georgia, the company's data issues run beyond the way it tallies the statistics. RealtyTrac reports a total for Georgia but it consistently collects data from only 95 of the state's 159 counties.

The company's database included only one foreclosure record for South Georgia's Jeff Davis County, for example, from January through September.

But the Jeff Davis Ledger published 35 foreclosure notices in that period.

Incomplete coverage is not isolated to Georgia. Sharga said RealtyTrac covers about 2,200 of the nation's 3,141 counties or county equivalents. That includes more than 90 percent of the nation's households, he said.

Even in the counties RealtyTrac covers every month, its numbers appear to be off the mark.

In July, RealtyTrac reported Georgia had 12,602 foreclosure filings. But a review of the company's data, which it provided to the Journal-Constitution, identified more than 2,300 duplicate records, as well as 1,700 bank repossessions that had been completed in previous months.

Lenders are not required to file a deed as soon as they repossess a property.

Sharga, of RealtyTrac, acknowledged the lag. "It's not ideal," he said. "We wish there were a better way to collect the data."

Susan Wachter, a professor of real estate finance at the University of Pennsylvania’s Wharton School was on Bloomberg TV yesterday saying that ARM borrowers are the next wave of foreclosures and that we still have a way to go before market hits bottom.

http://www.bloomberg.com/apps/news?pid=20601213&sid=aaPZlSplvu4o

Also, the number of people who negotiate to turn in the deed in lieu of foreclosure may actually result in the understatement of foreclosure data.

Thanks HDLC, this link is also very interesting. And I didn't even consider the people who negotiate to turn in their deed instead of foreclose.

October 2007?? Is that the best you can do, Alpine?

A NYT article from Sept 2008 discusses foreclosures in Manhattan. It also says this regarding co ops. "...Since co-op owners buy shares of stock and a lease tied to a specific unit in their building and do not hold title to their individual apartments, co-op foreclosures do not go through the same legal process that condominiums or single-family homes follow. Co-op foreclosures do not show up in the public record until the co-op goes to auction." I'm anxious to see what the foreclosure rates in Manhattan are this year, especially after all the resets. The link to the article is below.

http://www.nytimes.com/2008/09/07/realestate/07cover.html

@alpine:
"sorry to disappoint you, but those 6.5 million foreclosures (an overblown figure unlikely to come true, IMO) won't be in Manhattan and will therefore have no affect on prices here. Of those 300,000 foreclosures, what percentage do you think are in Manhattan? I'll give you a hint; the number looks somethign liek this: 0.00000000000000000000000000000000000000000000000000000000000000000000000001%"

your math is off.
even if only one of those 300,000 foreclosures were in Manhattan, the percentage would be 0.00033%

Great catch, polydoa -- I knew Alpine's number looked wrong.

This guy seems to use foreclosures and households in foreclosures interchangeably. but there has to be a significant amount of households foreclosing on more than 1 unit.

I agree and the 300,000 foreclosures were just for last month alone. There have been more than 3 million to date and an expected 6.5 million by mid 2011. I'm excited that this will cause prices to drop but I'm not too thrilled about having to wait to buy. I was looking forward to moving, oh well considering the amount of money I'll save, it's worth the wait.

as I said before, Manhattan has very few forelcosures and will continue to have few foreclosures. Why on earth do you think waiting for all the foreclosures are going to cause prices to decline? Seriosuly, how many foreclosures do you think there are in Manhattan? At my last count, there were NINE. That's right NINE. Not 9%, but just 9.

Last week there was a foreclosure in a Coop that has never had a foreclosure before. NEVER. Not even in the last downturn.

alpine, you know that 740 foreclosed before, right? it took 6 years after the big crash, but it did fall anyway. there are similarities to these days in that even many of the ultra rich are over leveraged.

so your saying that there are 740 foreclosures out of 350,000 apartments? That comes out to peanuts. And I'm willing to bet that the bulk of those foreclosures are NOT in prime Manhattan. Let's omit all the foreclosures north of 90th St. and see what the real foreclosure rate is.

I think Alpine has some merit about foreclosures not being the true nail in the coffin in Manhattan, in the typical sense that the rest of the country is experience them.

I see the main problem being the glut of new apartments coming on line having their prices slashed and going bankrupt/getting foreclosed on as an entire project. This will hammer the market here much more than anything else.

Plus, as prices plummet, jobs continue to be lost, and money runs out, I don't believe that NYC will be any more resistant to the "jingle mail" that affects the rest of the country. Becoming frustrated paying for something that becomes worth 40+% less than what you paid for it/owe on it is not something people in that situation will be resistant to just because they live in Manhattan.

New York state, and NYC especially, is usually much later to the part and stays much longer than the rest of the country (thanks, in large part, to a 450-day foreclosure period; one that is 3.5x longer than the average). So, while things sound like hell everywhere else, it's going to take 3.5x as long for NYC to begin feeling it.

InvestorMan... I would agree with you on the time frame but due to all of the option ARMs and how stubborn NYC housing has been so far... once the last bit of "hope" that a recovery in NYC is just around the corner is gone... I think the floodgates will be wide opened.

It seems to me that most nycers have someone that they can lean on the get through at least one year.... and this downturn didn't really happen till fall 08'... we ain't even a year into this thing....

i think admin was talking about prior foreclosure at 740 park avenue?

In NJ foreclosures are also rather rare, as I looked into buying one last year. I know there is this one foreclosure that is a few blocks away from my house. The place is mad ugly. Well, the last time I drove past it, I noticed that it was being demolished, so I guess the place was not in the best of conditon. I mean, if the onyl thing you can do with a foreclosure is tear them down, then why are the vultures here so happy about them? Do people like Luchias Dream think that they can somehow buy a foreclosure comparable to a brand new condo for huge discounts? Because that is never going to happen! If you could, I would be right behind him out-bidding him every step of the way.

alpine292... this ain't like your grandfather's recession..... mark my words... they threw out the playbook when this bubble was created and it'll be so on the way down....

W67: no worries, I see you in the 3br at the Mill. overlooking Bway. You better invite us to the hwarming.

I agree West67 we are just seeing the beginning of the effects of this downturn and with the ARM resets and continued job loss it's only going to get worse. Again I am so grateful that I'm in a position to wait, it would suck to HAVE to buy right now. I feel sorry for anyone who does.

fo' sure nyc10023... you mean like this one?
http://www.streeteasy.com/nyc/sale/392829-coop-2166-broadway-upper-west-side-new-york

89 days... mmmmm... mmmmm how much longer till $1mm, or should I just hasten it along :)

some people have no clue Luchias.... get some popcorn and see how this all plays out... then start looking... 10' and 11' are gonna be nice recast years... can't wait to see how NYC RE reacts.... after that...

C'mon. I have better taste than that. H-line, 1965 Bway.

seriosuly Luchias, your starting to sound like a broken record. And as we have discussed here on SE, in many cases, those with ARMs can re-finance or their ARM will re-set to a LOWER interest rate. Plus, 70% of the Option ARMs are in California and Florida.

if I play it right, 2166 could be my weekday home and I'll pick up something nice up by Sleepy Hollow... to bar-b-que and keep my cars :)

you mean this car w67?

http://toys.nursery-guide.info/images/content/little-tikes-coupe-car.jpg

and make sure you don't goo too fast w67 or else you will get pulled over:

http://s7v1.scene7.com/is/image/JohnLewis/230419605?$product$

LOL West 67th I will get some popcorn while I wait.

http://www.streeteasy.com/nyc/sale/347695-house-43-love-lane-brooklyn-heights-brooklyn

Me, I'm waiting for this to come down to my level. I love it! Pass the popcorn?

Wow evnyc that IS nice and what a cute name for a street "Love Lane" :)

alpine292 :) it's this one..... fulfillment of a life long "dream"... thank you Depression!
http://www.youtube.com/watch?v=r6Pq_mm9BHI

evnyc... butter, yes or no? :)

I'm looking into rectal street :)

evnyc, grab another bucket, and wait for something just as nice but with bedrooms a wee bit larger. do like the love lane, though.

yes, butter please, W67. AR, my butt will probably need its own bedroom by the time that Love Lane cutie and my bank account come to terms. But it's nice to dream.

my lazy complacent butt may revisit the moving situation in 2011-12. Don't care either way, really, but if the bargains look like i think they might, i could be compelled. a number of years ago, i used to tease my husband that when and if he finally made partner i might get my townhouse. at the time, it wasn't unrealistic. we'll see where we get to this time. should be an interesting ride, with or without w67th's exotic car.

Cars, shmars. I live here in part because I don't like them! (I get severe motion sickness.) Bring on the carbs slathered in fat!

On a serious note, though, I am concerned that when things do begin to pick up again I'm not going to be able to afford to stay put. A very large part of me wants to not have to worry about rent increases and moving ever again. I just don't think I could go back to living in the walkup tenement again. I don't have the income for this not to be an issue.

The 6.500.000 number is somewhat misleasding, as construed. We have already had millions of foreclosures within the last 24 months. That much said:

1. the latest data I've read report 3.9% of all loans are in foreclosure
2. with another 5.2% 50 days late
3. and something like 8.1-9.1% at least 30 days late
4. in Manhattan, the 60-day delinquentcy and foreclosure rates is supposed to be 2.4%
5. most of thoise are likely to be absorbed through conventional sales or modifications.

However, the economy remains in extremely serious distress, and in my opinion is likely to get a lot
worse in coming months because of the large number of americans suffering different types of income loss, and the fact that householod debt at 13.8 trillion dollars is now a larger percentage of household
income, household net worth and GDP than it was 12 months ago.

I think the bears on this Board underestimate the effect of the wall of money being printed/spent/lent by Uncle Sam. I too am a bear and believe prices in NYC have further to fall, but its very hard to be certain about outcomes as the government is a real wild card. Can you imagine where Manhattan re prices would be now if Goldman Sachs hadnt been given $12 billion by the Feds? Remember, there is no free market anymore and the US keeps coming up with ways to defer the day the piper is paid, which I am sure will come.

but talk about having shot your wad. the gov't has thrown everything it has and then some. it cannot be an endless pit.

Uncle Ben has the printing press on full speed.

flatironj, there is a limit, really, to our debt issuance. and we're not far off of it, at least doing so without huge ramifications. of course this market, and this city, is still alive because of its WS ties, far more than we deserve, given our role in the downturn. and that probably will continue at least through the 2010 elections, to the extent that they can manage it, and i have my doubts. but wtf do you think happens thereafter?

and if prices don't fall so much until then? what would that imply for anyone's purchase? well, that they'd just bought during a secondary bubble. fool me once, shame on you. fool me twice..

flatironj; the bears may be off as to the timing, but unless we see someone walks on water, won't the end result of the way the inevitable is being staved off only worsen the end effect?

you are speaking directly to one of my major fears---the longer you (we) wait to acknowledge the truth, the worse it looks. i saw a brief article in today's paper referencing venture capital. bottom line was that it needs to be cut back by 50% then all will be well. i guess its small enough and distant enough that even NYT can say that without cringing. unfortunately, i am afraid that is true of many things...not sure if its 50 % or 40 % or even 10% but there is clearly too much of everything.

Alpine292 - To some extend prices in Manhattan are influenced by prices of alternate US housing prices.

If everywhere else in the country has foreclosures and Manhattan doesn't, Manhattan prices would still fall. Plenty of buyers in NYC are deciding whether they want to buy in NYC or another major US city. Many will say, why pay $1,300/ft in NYC when I can get a place in Miami for only $400/ft, or San Fran for $600/ft. Also, plenty of recent college grads will consider moving to Boston, Houston, Chicago etc if they could buy an apartment with monthly payments of $2,500/month vs renting a smaller apartment in Manhattan with the same monthly expense. If the grads don't come here then rental rates fall and buyers who run a rent vs buy analysis will decide to rent a bit longer and delay buying until the rent vs buy calc makes sense.

i think i understand what you're trying to say but...its about jobs, not moving to miami...recent grads are all looking for jobs of which there are few everywhere. they are not fielding multiple job offers from ny, boston, houston, etc. they are trying to get one offer.

grads won't come not because of rents but because of no jobs...result will be the same as you suggest...lower rents.

The best students (ie the ones NYC wants and the ones good enough to get NYC offers) are fielding jobs from all over the country.

jazzman, you're analysis is spot on, but not quite pessimistic enough. the number of graduates who have jobs is so, so low.. it will spread to every urban area. no jobs, anywhere. yes RE is less expensive in some places, but so many young adults are heading straight back home after graduation.

"Plenty of buyers in NYC are deciding whether they want to buy in NYC or another major US city."

I totally disagree with that statement. First off, when a city has a lower cost of living, the saalries are generally less so it equals out. Plus, many people have jobs here and cannot move even if they wanted to (finance, advertising, etc.). These types of people are stuck in NY. What kind of finance industry does Los Angeles and Miami have???

And I should point out that prime San Francisco is not cheap and costs nearly as much as Manhattan. Pacific heights and Nob Hill are super pricey.

"What kind of finance industry does Los Angeles and Miami have???"

just to play Devil's Advocate as usual: as companies like Ontra become more and more a part of the finance industry, the more you will see finance moving away from NYC.

For those who can't afford Manhattan, I think they will move to the outer boroughs or the "urban burbs" (eg: White Plains, New Rochelle, Hoboken, etc.) before they move cross country.

Manhattan is on the road to repricing. Can't tell you when or where it will stop. It's going to be a while and slightly painful. Painful for sellers, and for buyers who have to pick a time and pull the trigger. All things being equal...rather be a buyer today. This town has reduced it's production base considerably over the years. The big finance/&related will still exsist but in a definatly muted way. The rest of us who serve the needs of these people will no doubtedly downsize ourselves.
The calvery isn't coming.
This is it, don't look back.
Look foward at the new New York.
More grime, more crime, a much better time!

"For those who can't afford Manhattan, I think they will move to the outer boroughs or the "urban burbs" (eg: White Plains, New Rochelle, Hoboken, etc.) before they move cross country."

Alpine couldn't afford NYC, so he went to Jersey and is now headed to DC.

So, doesn't exactly carry that argument.

> First off, when a city has a lower cost of living, the saalries are generally less so it equals out.

Incorrect!

If you think Manhattan prices are "equal" relative to incomes, you HAVEN'T READ ONE ARTICLE ON REAL ESTATE AND INCOMES!

Seriously, you could not be more wrong!

man, your are the biggest idiot on SE nyc10022. I posted my life story so many times that I am not goign to do it anymore ebcause you clearly have your head in, not the sand, but a pile of garbage.

"jazzman, you're analysis is spot on, but not quite pessimistic enough. the number of graduates who have jobs is so, so low.. it will spread to every urban area. no jobs, anywhere. yes RE is less expensive in some places, but so many young adults are heading straight back home after graduation."

i wouldn't be surprised if many youngsters just work to pay off their student debt and then engage in adventure (surfer's type of lifestyle, put a tent in the backyard...). why would you work full time for close to min wage? or engage in a never ending rat race that doesn't pay off at all?

it might make sense to postpone starting a family till the 40s and have fun for another decade knowing that those in their 20s will have to work till they drop. better to have time while there's no need for hip replacements.

admin "i wouldn't be surprised if many youngsters just work to pay off their student debt and then engage in adventure (surfer's type of lifestyle, put a tent in the backyard...). why would you work full time for close to min wage? or engage in a never ending rat race that doesn't pay off at all?"
Very interesting thought - for those fresh out of school they can defer their student loan repayments for a while if they aren't employed. I'm sure there will be plenty of C and D type students who are un-hireable right now and who will just chose to fall off the grid.