Roaring Back

Noah, if I go to urbandigs I still get the beaver :) not the snapshot. What's up?

I knew Noah would come around. Still tiptoeing on either side of the line and still a little Greenspany in his choice of words but in the end, he couldn't ignore the data.

A note to bears: you may have less time than you think.

hit refresh...should update

Ill never ignore data and Ill never ignore pickups or slowdowns as I see it. I started talking about pickup like 4-5 months ago. Im not a perma-bear, or a perma bull. When there is a time to be bearish, im bearish, and when there is a time to be bullish, Im bullish.

I was uber bearish in late 2007 before the process started. Now im way less bearish because it started. I still dont think we are out of the woods for this crisis and I would expect a double dip recession sometime in late 2010, maybe 2011, and a 2nd wave of problems with banks for prime, jumbo prime, commercial, lbos, credit cards, etc..

http://www.bloomberg.com/apps/news?pid=20601087&sid=amq8v.M.ak60

notice how these headlines seem to no longer matter? out of sight, out of mind. strange how this works and people look the other way in regards to how this is affecting higher quality debt classes, and commercial, and lbos that were done in 2005-2006, and credit card chargeoff rates, etc.

I think its doomsday fatigue. Just as inklings of improvement are met with comments like "its not hard to improve on zero", conversely it holds true that reports of poor performance in light of where we have been is treated in a similar way. All this churn appears to be happening in a relatively small percentage of the population. If 10% are going through hell, 90% see the resulting decreases in housing and other costs as beneficial. While their confidence wanes as they wonder if things will turn before their number comes up, inertia seems to be carrying them through.

I think the media created this "doomsday scenario" I think there wasn't a doomsday scenario at all just banks with inflated earnings. The inflated EPS/stock prices was created by people borrowing for homes etc who should not have been borrowing. Simple. Now they are flushed out or getting flushed. There was a media induced mini panic developing but it never happened. What happened was the banks got hit.That's it.

Now since people think that the "worst financial crisis since the depression" is getting better they will start ramping up their transactions thinking "this was the worst ever and now it's getting better, I will miss my chance!"

All created by the media puppet masters.

UWS...I like that.."Doomsday Fatigue"... well said.

"I think there wasn't a doomsday scenario at all just banks with inflated earnings."

sorry, but I totally disagree. things got real scary in late 2008, real scary. but when you look at what was done to stem the crisis, you clearly can see that if it wasnt for this govt/fed/FASB intervention, it could have been way way worse. earnings are always inflated via accounting tricks, like they are being done now. Recall GS earnings that ruled out the month of DEC because of a acct trick!

"The fact that the firm was recently required to switch to reporting results from a fiscal to a calendar year meant that its fiscal year ended in November while its calendar year first quarter began in January. That made December a so-called orphan month.

As it happened, Goldman booked a pre-tax loss of $1.3 billion in December. Michael Williams of research firm Gradient Analytics noted that firms have a large degree of latitude in deciding when to recognise gains and losses, adding that it seemed “rather remarkable that they ended up with such a large amount of losses in December itself”.

A Goldman spokesman pointed out that “we didn’t make the rules”. Still, by burying the December figures in a table on page 10 of a news release, it certainly didn’t seek to draw attention to the losses."

http://www.irishtimes.com/newspaper/finance/2009/0424/1224245293464.html

> UWS...I like that.."Doomsday Fatigue"... well said.

If folks becoming tired of something meant it wasn't true...
We wouldn't have had a great depression.

"I think the media created this "doomsday scenario" I think there wasn't a doomsday scenario at all just banks with inflated earnings."

Absolutely, without any question, the clearest display of lack of understanding of what happened.

Thanks for the afternoon laugh.

Accounting trickery did not inflate bank earnings like we saw in 2008. What did it was actual profits received from increased loans, backed by MBS and CDOs. Those loans were inflating earnings along with stock prices. Everything was great until those "subprime" assets were considered garbage and market values plummeted so did banks balance sheets.

People who borrowed "subprime" loans couldn't pay or refi so now the hot spots Phoenix, Las Vegas, So FL and So Cal are awash with a huge supply of homes. Manhattan NEVER was subprime. But of course the residual effects caused buyers to freeze up. Now we are seeing that pent up demand out there. manhattan fundamentals are unique and solid. Prices will drive upward as buyers flood back in.

your assuming marks are where they are supposed to be for all holdings on books. I would tend to think marks are for most part, too high rather than too low or at fair value based on market valuations

Ha - don't know about "flood back in", but I do know plenty of people looking seriously. I think those trying to time the bottom may end up disappointed. Those waiting for Classic 6's in prime NY under $1M (the 50% drop theorists) will almost certainly end up disappointed.

How about a classic 6 for 1.2M? Is there any chance in a neighborhood with a good school district?

whole loan books are probably the most mispriced holdings as they are held in 'hold books' / 'accrual books' and only marked down when the entire book starts to non perform.

As leading indicator as you get...time to start going down the other side of the "W"

http://www.marketwatch.com/story/consumer-confidence-falls-on-gloomier-jobs-view-2009630101600

And Urbandigs comment on whole loans is the next problem....Mike Mayo did an article on this about 2 months ago and it showed EVERYONE holding these things at 99 cents on the dollar since there was no need to mark them to market...

But someday they must....if anyone really thinks this isn't a calm before the storm they are fooling themselves...

That and the sharp contraction in lending coming due to the PPIP not going forward (unintended consequence of relaxation of MTM and equity rasing by banks) and TARP being paid back which will take even more credit out of the system...not to mention the increased loan reserves for the recent delinquency/foreclosure problems....and of course the morbid MBS market...

Good luck with that...

""I think the media created this "doomsday scenario" I think there wasn't a doomsday scenario at all just banks with inflated earnings."

Absolutely, without any question, the clearest display of lack of understanding of what happened.

Thanks for the afternoon laugh."

Ditto.

SteveF has entered alpine/perfitz territory.

there are no buyers flooding into manhattan. another month or 2 and the markets gonna be reeling from the continued lack of jobs and $$$. Its gonna be really bad in manhattan. so many of these towers are gonna get crushed.

This is a head fake up - if you're a seller now is the time - we head down 20% from here. It will take a year or two, but with the new underwriting criteria for super jumbo loans, there just isn't the demand/population to support this many $1M+ condos.

New developments seem destined for an uncertain future. I would argue the impact to established buildings will be negligible -or how 'bout this: people will begin to flock to established buildings where they can secure a mortgage and the threat of complete collapse is nonexistent. In fact, I'd be surprised if its not already happening.

thats a very interesting topic UWS. thanks for bringing up.

nyc10022
about 1 hour ago
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SteveF has entered alpine/perfitz territory.

reminder
http://www.streeteasy.com/nyc/talk/discussion/11716-all-fights-between-nyc10022-and-someone-else-should-just-be-here

UWS - that's an interesting angle. I am in a solid UWS co-op on a great block and one of our neighbors just sold a place for about 6% below 2007 comp. I would agree that the $1M studio condos will be the worst to be hit. I don't know how "negligible" the impact will be on the prime pre-wars but it will almost certainly be significantly less than the new dev condos.

UWS - yes, exactly. Thank you for highlighting the trend. Everyone I know who's seriously looking are looking for co-ops with good financials. And those places are holding up well, the discounts are in single digits and sometimes no discounts at all.

"the threat of complete collapse is nonexistent"

two weeks ago there was a foreclosure in a well established Manhattan Coop which had NEVER seen a SINGLE foreclosure EVER before. Go to ACRIS and pull up some "well established" coops and look at UCC-1's which don't have any corresponding sale since 2004. Those are all refi's, and an awful lot of them are cash-out refi's.

Another thing which has happened over the past decade is that an awful lot of Coops have refused to raise maintenance and instead used flip tax income to finance operating expenses. As a result, there are an awful lot of "established Coops which have:
1) A significant number of owners with little equity because they refi'ed out their equity already,
2) Diminished income from a severe decrease in flip tax fees (especially those who's flip taxes are a percentage of profit rather than per share or gross sales price, and
3) a maintenance level which currently does not cover operating expenses without the flip tax income.

Take those refi'ed owners hitting resets, and raise maintenance fees, and you may see an awful lot more [people under water and unable to make their payments. I wouldn't be so sure about how much safer some established Coops are than some new construction projects which are currently in deep trouble: when the Condo projects in deep trouble get taken over by the lender, people who bought might get "killed" in terms of the value of their units, but some of the buildings as entities may actually come out better out the other end. And there's no way of knowing which are which without a really rigorous analysis of the Coop's finances as well of the financial positions of large portion of it's shareholders: which is pretty much impossible to do because the data isn't available.

I think there is general agreement that if you are looking to buy, your chances of getting a mortgage and not losing your shirt, etc.. are better with an established property with GOOD financials. You can only do battle with the devil you know 30yrs. If you manage your decision based on the what ifs you will begin to exhibit signs of the paralysis afflicting many on this board who seem scared of their own shadow. There is an intelligent way to buy in any market. Do your homework and you can mitigate much of the risk.

"there are no buyers flooding into manhattan. another month or 2 and the markets gonna be reeling from the continued lack of jobs and $$$. Its gonna be really bad in manhattan. so many of these towers are gonna get crushed."

I've been hearing this mantra for months. Since last September, in fact. I think it is entirely possible that the city drops another 10%, bounces along there for a few months or a year, and then prices resume their inexorable upward march. Some people on the board may at some point need to confront the possibility that just because things "should" be a certain way, reality will look quite different.

UWS: "Do your homework and you can mitigate much of the risk."

Isn't that exactly what he was saying rather than relying on assumptions about what class of building will do better? Building financials would be in your words a "devil" you can and should easily know.

Yes indeed evnyc... this thing is becoming so over analyzed it reminds me of hyper type A parents arming themselves with the latest information on child rearing and ending up with someone that bares little resemblance to the child promised in the literature.

That's funny, UWS. Six months ago I was solidly in the 50% off camp; now, I simply don't know and highly doubt that anyone else does either.

RE is falling apart. how blind can you be to not connect the dots between the current state of the rental market and the multiple currently empty towers here and in brooklyn to realize things are screwed? No one is hiring right now wont be till 2010.

Sure, those towers might be screwed. No argument there. But based on the limited declines in the broader market, I am not convinced BY THE DATA that you have a case. And if you need to resort to name-calling to make your point, maybe you aren't feeling quite so secure about it either?

marco_m... I think you are missing the intricacies of the current market.

Career Builder shows over 10,000 jobs for NYC so I don't quite understand your position wrt nobody hiring.

I didnt call any names. I feel very secure. How do the towers / collapsing rental market not bring down the rest of the market eventually?

"there just isn't the demand/population to support this many $1M+ condos." Bingo.

"I've been hearing this mantra for months. Since last September, in fact. " Prices are down 30% since then. Is this statement really in support of your view?!?

"prices resume their inexorable upward march" Prices march upward inexorably if and only if you look at a chart that begins in the mid 1990s. Are you serious?

I agree with the posts about the new dev condos - I have always thought they were garbage product, most in marginal neighborhoods. How much of a rookie do you have to be to buy a $1M alcove studio on 42nd and 11th?! But prime prewar immediately East/West of the park, West Village, Tribeca, and certain other pockets will be OK - down 5%? Sure. Down 10%? Perhaps. Down 25%? Ha! Not in your lifetime.

Re: Career Builder shows over 10,000 jobs for NYC

It looks to me like Career Builder shows about 10,000 jobs for the greater NY area (including places like Wayne NJ). In Manhattan, there are about 3700 jobs listed, of which about 900 are in Finance. Wow, 40,000 Wall street jobs lost and 900 positions waiting to be filled - sounds like the real estate boom is right around the corner!

And just think what'll happen if the people who fill those jobs in Wayne, NJ decide to buy in Manhattan! Oh boy, we're right back to $1200psf!

Everything is already down around 25 or 30%, including prime areas of Carnegie Hill and near CPW, so what is it you are saying will not happen in your lifetime?

Given the severity of the move up, and the structural changes and all out war on incomes over $250k, in a city where median apartments cost $1mm or so....It seems foolhardy to rule out anything happening in your lifetime. In your lifetime, NYC could go bankrupt and prices could fall 75%.

A) by directing whatever buyer demand remains - and I am not convinced that it has fallen as significantly as some here clearly believe - toward financially stable coops and condos, which in turn may support prices at higher levels than anticipated.
B) The people buying the $1m studios were the dumb money in at the very end of the bubble, and yes, they're going to get spanked.
C) I am not arguing for a boom. I am arguing that people who were so vastly priced out during the boom years may play a more significant role in supporting prices than some bears are capable of considering.

Rhino, prices are down 20%; no one reliable has said we're down 30% yet. Even if we come down another 10 or 20%, which I fully expect may happen.

AND - it is the upper end of the market that is suffering the declines. Decent family-sized non-luxury apartments in good areas are not down 20%, much as I wish they were.

Re: Not in your lifetime.

Yeah, don't you know the West Village is different? Everybody knows that.

So Rhino your purpose here is what, exactly? To save us from ourselves?

Someone posted on here a little while back a prominent Corcoran broker saying that she is advising sellers that -30% from peak pricing is what actually moves in this market at the leading edge. I believe it and I see it in the asks for decent family sized apartments. I think Urbandigs, who all consider reliable, is of the same mind - that prices are down 30%.

I don't believe that the market is as segmented as you seem to believe. At a price, I am buying a condo. At a price, I am choosing a coop. You can't fire sale luxury condos and expect coops to hold. Yes, buyers used more leverage to get into luxury condos, so it is feasible that they fall more peak to trough.

"I am arguing that people who were so vastly priced out during the boom years may play a more significant role in supporting prices than some bears are capable of considering"

In the end, most people spend what they can offer. Most people like to buy, not rent. In the end, there will be a headcount. I think you are wrong about the levels at which people who were priced out can come in. I think these levels are much lower. I just don't think you have the volume of $300-500k+ earners outside the finance industry to absorb this inventory and every tick down will make potential buyers more cautious, potential sellers more anxious. You don't clean up a downturn in 10 months. We are into slow season now.

"A note to bears: you may have less time than you think."

Isn't this you trying to save me from myself?

Listen, controversial as I seem to have become, I get multiple compliments a week on this board. Multiple jeers for losing my cool with Steve (who forgave me promptly and graciously) as well.

Frankly, I am here to sanity test my bearishness. I am waiting for one of you bears to come up with a compelling reason that prices can hold here. Still waiting.

Of course I'm trying to save you!!

I'm convinced the bears and the bulls are looking at completely different sub markets.

An example:

$1M 2/2 coop's on the UWS vs. $1M 1/1 condos in midtown.

The coop on the UWS is IN DEMAND and selling.

The condo in midtown is, well.... not.

$1mm 2/2 coops on the UWS used to be $1.35mm....-25%

All that anecdote tells me is condo owners/developers have been slower to adjust. I have noticed it, and I don't understand it.

Last night I was with my father-in-law. One of his friends is a Citi executive. He and his wife bought and renovated a loft in Soho last year. They are now renting it out. That cash flow picture can't be good. I don't know if they intended to live there or flip it. My guess is flip, otherwise why would the notional 'mark' on the value change their plans. Rambling...what is my point? I guess my point is for all kinds of reasons various classes of sellers have been faster or slower to get the joke. Maybe the $1mm one bed in midtown would sell at $650k.

So in a perfect risk free world what would you be in the market for? Maybe we can help you drive down prices.

"In Manhattan, there are about 3700 jobs listed, of which about 900 are in Finance."

Not every company posts their jobs on job sites or even their own websites. I run a staffing business am confident that this is accurate. Is the recession over? Absolutely not. Are things getting better on the job front? Yes. How quickly is up for debate. Even the financial services industry in NYC is seeing an uptick. The latest jobs report showd only 2,400 job cuts in the FS industry for June. Cuts are never good, but it appears that most of the bleeding in the FS is close to over. From my own experience, we are seeing more and more jobs with clients and more and more chatter about new jobs coming soon. It still has to happen, but the fact we are even discussing it is MUCH better than 6 months ago.

"I think Urbandigs, who all consider reliable, is of the same mind - that prices are down 30%."

I don't want to speak for Noah, but his own words on Urbandigs:

"I see deals happening at slightly higher levels today than only 3-4 months ago because of the shift in both buy and sell side confidence - leaving out whether this shift is warranted or not. Does that mean a new sustainable bull market, of course not. It means we went through some extreme times, and the market is adjusting and equalizing. While every price point has been affected by this crisis and trading in their own unique ranges down from peak, it seems transactions taking place over the past 7-9 weeks are not as pressured, or 'fear based', as those that took place in February and early March."

That's not exactly what you attributed to Noah.

Waverly, that clarification is useful. That site's numbers were referred to in a post as some kind of meaningful barometer of the Manhattan labor market, and I was merely checking the readings.

Lets be clear. Buying an apartment in Manhattan is not only about being employed. Its about being employed and earning enough to pay all your bills, your taxes, and still net enough to accumulate a downpayment. None of these stats matter. If you think the wealth accumulation in 2008, 2009, 2010, are arguably EVER is going to be like 2004-2007...I have to tell you respectfully...No effing way. Hedge funds -20% on average in 2008....up 10% so far this year.... Maybe they can make another 10% back to break even this year? Gonna be tough with the market already where it is. Sell in May and go away as they say. Bank bonuses in the new Tarp era? Understand the dynamics...where is the wealth being generated to absorb the supply. It ain't happening. The transactions you see now are the people buying with the wealth they generated in the boom. What happens when those hopeful souls all snap up their dream places...What happens FROM HERE????

Waverly....does Noah say anything about levels there? And with all due respect to him, that blurb doesn't really say much of anything. Frankly that blurb says to me, sellers finally have realized -25% or -30% is whats in order, so the process has become a little less contentious. In other words, buyers are now taking offers 25% off peak, rather than getting their panties in a bunch, as they had been doing in Feb and March...

Speaking only for my own tiny universe within the city, after complete panic and bunker mentality since last fall I am starting to see job openings in my field and two people I know are in the last steps of being interviewed for new jobs. There's been movement where there was simply paralysis before.

And, as a result, one couple is seriously shopping for a 2-bedroom. So Noah's numbers and analysis coincide with what I observe in my own small personal sphere.

Rhino, the important part to me is:

"While every price point has been affected by this crisis and trading in their own unique ranges down from peak,"

This is a point that I have made on many occassions and several others echoed here as well. I am not saying prices are not down, because they are. I am suggesting that not every apartment is down EXACTLY the same amount and that not every apartment will be affected EXACTLY the same going forward. The 30% down across the board argument is really just too broad and simplistic to be accurate and I think the numbers are refelecting that the downturn is more nuanced than that.

Well said, Waverly.

That's well and good and obviously true...I am not sure what good it does the discussion. Besides, it will always be a guess because the actual units being sold now may not have traded at the peak. However, everything I have seen suggests that nearly all coops are now down 20-30%. Until it trades, its all a guess. Sellers seem to have come to grips with 20%+ down from peak. You get lucky, you move it for -15%, you don't you move it for -35%. My gut tells me current buyers are the last of the anxious/fortunate earners of 2004-2007. Only time will tell. The big condo developers have not even played their hand yet.

no time to go into detail, as IM off on showings, but that blurb was meant to say that sellers are not in a panicked state as they were in Feb and early March and buyer confidence is quite different in past 6-7 weeks or so compared to that armageddon time period. You cant ignore that. The market really did jump from one extreme to another. Im not backing it, Im not buying into it, I question the sustainability of this pickup in activity, but I do have to acknowledge it. fear levels are just not what they were 4-5 months ago. And this market went from a fear based one and no bids (a tough market for any seller that was forced to hit a bid) to one that seems to me to be perceived as reflationary, with higher confidence. Now this is not across the board for the buyer pool of course, but I dont have access to every buyers mentality, only what I see and whom I talk to and info I can gather.

The shift from fear to what it is today was quite dramatic. Thats all, and as such, the market is pricing out the fear based discounts we say 4-5 months ago. Does this make any sense or am I babbling?

I'm a numbers guy. The mental state may have been worse 5 months ago, but does that mean the prices are higher now? You think the prices are higher now than in Feb? Just looking at the Q1 data that shows like 15% down off Q1 2008, I find that tough to believe. I bet when the Q2 numbers come out, they will show a sequential decline. Then we will be in slow season, and Q3 will show another decline. Q4 will be inactive. In Q1 sellers will need to shit or get off the pot...and sell to an every dwindling pool of buyers making less and less in income.

Prices and sales are going up.

"That's well and good and obviously true...I am not sure what good it does the discussion."

Come on, Man. That's not the most open-minded attitude towards discussion. You raised a number of valid points and even said, "The transactions you see now are the people buying with the wealth they generated in the boom. What happens when those hopeful souls all snap up their dream places...What happens FROM HERE????"

Just because I disagree with you, and a few people have given you compliments here and there, doesn't diminish the useful of what I said....unless you only consider postings "good for the discussion" if they are in agreement with your beliefs?

I'm not sure that this board is ready for this kind of reasonable argument without insults, straw men and false analogies.

Im sure some people are buying right now. Its just an uptick in a still downward trending market. the full effects of the missing 3 I banks and the entire securitization biz is still not realized.

My point is Waverly...in a diverse market of apartments, with unknown 'peak values', isn't it obvious that not every apartment is down exactly the same amount from its imagined and estimated peak value? Sorry, but my point is I think you have stated the obvious. If we were talking about the stock market and where it will bottom, I think it wouldn't merit stating that every stock will not be down the same amount. That is not to say you aren't a unique special person.

Is the full effect of banking hiring being down 70% realized? Is the full effect of condo one beds fire selling and driving down the price of one bed coops, dashing upgrade hopes and hitting the two bed market realized? So much is being made of people feeling better that the S&P is up and sellers getting a little more realistic...realistic enough to actually ink deals. S&P is barely up on the year after the worse year in decades...and hedge funds have only clawed back half last years watermark.

Noah, if I roughly add the last four months of contracts from your graph, I get 150. 30+50+30+40. 150 out of an inventory of 10,500. 150 people and their spouses decided to buy in Manhattan in the last few months and they are telling us something about where the market is going? Craziness.

What's a normal work off of inventory over those calendar months? I guess we know this new price level is acceptable to 150 people.

"isn't it obvious that not every apartment is down exactly the same amount from its imagined and estimated peak value?"

Apparently it isn't, because the mantra for many on this board is to lop the same X% off of every apartment and tout that "market is down X%" as their reasoning. Only when someone like me brings up the fact that not every apartment is the same is it even discussed, and it is usualy just dismissed as some "perma-bull" crap (which doesn't fit any of what I write here). If this point is so obvious, why do you even seem to question it with these statements:

"Everything is already down around 25 or 30%, including prime areas of Carnegie Hill and near CPW"

"I don't believe that the market is as segmented as you seem to believe."

You may be a numbers guy, but you are ignoring some of these numbers when you make these broad statements. It is also a little silly to say that I am stating the obvious, when you yourself used this same straw-man argument that you say everyone knows isn't true.

Rhino - please provide reference for Manhattan numbers being down 20%. Miller Samuels' Q1 report had average PPSF up 2.3%. You are such a numbers guy, where is the data? Also, those numbers are DAILY averages, you bozo - not monthly. Redo your math.

OTNYC: You should read the reports you cite and you'll find your references. Median sales price of a co-op was down 21.7% from the prior year quarter. Average down 14.4%.

Waverly - If I knew you were going to pick a semantic argument with me, I would have chosen my words more carefully.

"Residential apartment buyers want prices to be nearly one-third off the market's high mark to convince them to go into contract, Pamela Liebman, CEO of the Corcoran Group said at a panel discussion yesterday (May 15th)." http://therealdeal.com/newyork/articles/corcoran-ceo-says-30-percent-cuts-make-sales-ivanka-trump-corcoran-pamela-liebman-jonathan-miller-dottie-herman

I find it hard to believe these special apartments exist, that have held better than 80% of their peak value. Unfortunately, your assertion is impossible to prove. My own feel tells me that whatever an apartment could command today, it would more likely then not have commanded 30%+ or more (in percentage terms of the current sales price).

OTNYC - First, go fuck yourself. Second, we are talking about the current market not Q1. Third, I have no desire to do legwork to prove to you the market is down 20%. Fourth, there was nothing suggesting prices were up vs any baseline in Q1. Most people on this board following it closely accept the premise the market is down 20%+.

Although there are still jobs in NYC, the pay has gone down considerably for most. It isn't enough to just look at job posting data or unemployment.

If the Gov didn't keep rates low and raise the limit on jumbo financing, the apts in the <$900k range wouldnt be holding up as well. If income stays low, there aren't new jobs for young renters, rents go down, or its harder to qualify for a GOVT mortgage, property prices will continue to drop. This is just a pause in the market, for a 5 year cycle.

Manhattan has renter that can come in from outer borough, which keeps the rent from dropping too much. This also helps create a bottom for the housing market here.

This old NYTimes article discusses to last major real estate cycle in NYC. I dont think this current cycle will be as bad, as long as some of my points above stabilize and/or improve.

http://www.nytimes.com/1994/02/13/realestate/co-op-market-drift-continues-in-manhattan.html?pagewanted=1

Malthus, thanks for the data. And again for clarity sake, what was sold down 22% in q1 is not the totality of my view 'of the market'. I am making a reasoned judgment that an apartment placed on the market today, in July of 2009 past the peak season, would be lucky to go to closing at a price of 70c on the dollar to peak value...a peak value that of course is only a best guess. I don't care who agrees or disagrees. What I do hope, however, is that people stop denying that AS A WHOLE the market is down 20%+. Further, in such a challenged market, one who is willing to use their brain and draw inferences... The true market may have been down more than 22% in Q1, as closings in such a challenged market are likely skewed to the best of the marketed stock. Chew on that.

Smiles, nice post. Based on real estate market heights, as well as the relative severities of the attendant recessions, its hard for me to understand why you would imagine this downcycle would be less severe...but I guess you're a smiley optimist. When rates are already low, they have less scope from improvement. Rates were high in the 1990s...they went down, boosting prices on the way up. Even if rents stabilize, values are still out of whack (cue LICC to deny this).

Rhino - I am not picking any sort of argument with you. I thought we were discussing the market and different views on it. You believe a certain point is a given and I felt that i was providing examples that proved differently...that's all. I can tell you from a couple of people I know who have sold recently (last 6 months) that they accepted offers that were more in the 8-12% off-peak price range. These were co-ops in good neighborhoods that increased at a more reasonable price in the 2002-2008 run-up. They were coming from a more reasonable place and they got a reasonable price. Is this common? I would think not. Bit I think it is much more common than one would think after reading SE for any amount of time.

smiles - I love optimism! I am not sure I believe that this downturn won't be as bad as previous downturns, but I am positive that it will be different.

Oh yeah, Rhino, I do agree the market as a whole is down a good bit. I hope you didn't think I was trying to argue that everything is roles and prices are increasing as we speak. Like I posted before, I think this downturn is a lot more nuanced than most people understand or are acknowledging.

I think your friends might have gotten more then they thought at the top. Also, you can appreciate again that your assertion cannot be proven. So to be precise, do not say you have provided proof of anything. Proof is the Miller report from Q1 showing -22% for the market. And even that proof can be debated as to methodology.

Rhino - not sure where you get that # from for contracts signed in the last 4 months. The graph is a weekly average. If you look at my widget, the 30 day cumulative total for CS's are about 1,088, in the last month. Do you see this?

If I log onto my system at OLR, an internal listing sharing service that keeps track of brokers internal updates (data quality should be significantly better), they record 1,192 contracts signed from the period 6/3/2009 to 7/1/2009. Thats 29 days, so add 1 more day avg to compare to my widgets 1088, fairly close!

So, 1150-1200 or so contracts signed in the last month alone.

Fair enough, I read it as monthly, because it looked like the lines were too straight between the monthly points to be more granular data. Then I got called a bozo and told it was daily data. Apparently the bozo caller was not correct either. Fair enough, 10% of the inventory cleared at prices to yet be surfaced in the reporting...I guess units came on as well because the inventory does not appear to have fallen 10%. It still seems like much to-do, to me, given how early in the correction we are...and that the buyers likely made their money in the fat times. Fewer and fewer such buyers will be available to make markets.

Hey numbers man...

"Noah, if I roughly add the last four months of contracts from your graph, I get 150. 30+50+30+40. 150 out of an inventory of 10,500. 150 people and their spouses decided to buy in Manhattan in the last few months and they are telling us something about where the market is going? Craziness."

If I was to tell you your calculation for units in contract was off by about 2000 percent, how would that affect your position? My guess is not in the slightest but felt compelled to ask.

Glad you're not MY numbers man!!!

no worries. the site will be greatly enhanced when I leave halstead and focus on urbandigs 2.0.

I calculated it wrong. Congratulations. Apparently new inventory is coming on every day, because however many sold, massive record level inventory is only down what about 5% from 11200 to 10600. Have a party bears and celebrate that I misread the graph. Whew hew.

Have a party bulls that is. Its the bottom!

"So to be precise, do not say you have provided proof of anything."

Now who is playing games with semantics? Lose the 'tude or at least spew it on someone else.

Very different to say where the market is based on reports and quoted senior broker opinion than to imagine what your friends could have spell at the peaks. Your insights are no loss. Bunch of touchy feely bullshit.

So rhino is getting all his data conclusions wrong again. Shocking.

Stay cool Numbers Man we need you here. You've been very helpful today.

Here we go...blind to history LICC. I misread a graph. Real estate remains expensive and continued to fall. Wheeeeee.

Rhino, I think you bring a lot of good insight and evaluation. Unfortunately, your arrogance is a flaw.

What good insight and evaluation? rhino reads a graph posted by someone else, doesn't bother to undertand the underlying dynamic, parrots it, and then throws out a few lines you can pick up in a basic textbook on financial analysis. He talks about what he feels and doesn't back his statements with anything concrete. I can see how some people are fooled by this guy, but I think most people see his lack of substance for what it is.

Maybe I should try your method....Debate the history of a ratio by throwing out two unrelated surveys, or better yet, one...and then fill in the other half of the ratio off the top of my head.

Listen LICC, Alpine...everyone thinks you are idiots. You have no support here. Best you can do is counter a compliment? The underlying dynamic? I misread the timescale. The underlying dymamic, shit for brains, is even with this 'uptick in activity', its barely made a 5% dent in these inventories and now we head into slow season.

Also, when someone points out rhino's flaw and mistakes, he decides to curse at them and then just declare that everyone thinks he is right.

Ok so Pamela Liebman of Corcoran agrees with my assessment of where the market is (or I agree with hers). Noah of Urbandigs and I continue to think prices are out of whack compared to rent.

Who is your company, LICC....Alpine?

This is really rather simple. The past 7-8 years saw massive appreciation in the NYC real estate market that was the result of an enormous asset bubble and not the result of any intrinsic increase in the value of NYC real estate. Prices will decline until all of that appreciation is drained from the market. It won't happen instantaneously, or linearly, but it will happen. The notion that we can talk about prices coming down 10% or 20% or 30% without talking about where they're coming down from is ridiculous.

Compliments and company...I am ahead of you 20 or more to 0.

Bill, some of us are talking about that.... Others or not. Still others, like LICC, deny it was an asset bubble at all...and denies the asset vs. rent relationship is in any way stretched currently. He acts confused in front of any chart provided. Often times, he stops posting for a day or so when presented with such information. In these way he can piss on the data, without it sitting right about him in the string.

w67th - we missed you here today ; )