Why Are Prices Stalled and not Falling

we're at changing point. we either stabilize or break down in my opinion

the real estate market moves like the titanic not like a jet ski. this 25% drop in manhattan was abnormally fast and a bit of catch up to the rest of the nation. things just don't fall 3-5% a month like they have since lehman. maybe something closer to 1% a month or around 10%/year give or take would be a more realistic pace. this is real estate, not the stock market.

I see people wishing pricing down, but the catalyst is over.

Manhattan, which is a premium market, will benefit from an improvement in the premium market, like higher wall street jobs picking up, media in NYC has figured out the game, the credit card companies are doing better. The entry level positions aren't necessarily coming back so quick, but those are folks who wouldn't be contributing to the better part of the ownership market for about 5 years. Hard to disagree with all the positive financial news.

credit card companies are doing better? in which universe? it's very hard to disagree with a 9.5% U3 and a 16% U6.

Credit Card Companies - the one in NYC: American Express 2Q Net Down 48%; US Card Ops In Red

and THEY are the premium credit card company

i find it interesting, strange, i'm not sure, but alcove studios are still listing for over $400k and people are buying them.

"people are buying them" is a very broad statement. Yes, sales are up from the devastating 4Q 2008 and 1Q 2009, but they aren't breaking any records. The decrease in listings is seasonal, but the truth is that supply is still way stronger than demand, and that's not counting shadow inventory.

julia, I have noticed the same thing. The high end of the market has been getting crushed, but the lower end seems to be bobbing along. I wonder too whether there will be a catalyst for further price reductions or whether this is as low as they go. I'm waiting for fall. If the data still seems to be perking up by then, well, it's going to be hard to keep arguing that huge price reductions are just around the corner. Meantime I watch and wait.

Trompiloco, actually sales of late have been going at a near-record pace, believe it or not (average of 1,060 contracts per month!). Highly doubt it'll stay that way of course. urbandigs has a good post on this:

"Looking back at the past 8 weeks (limited by data I have available to me), 2,120 contracts signed is quite a lot! Its as if we saw peak-type levels of activity in the past 8-12 weeks or so with the first wave down in prices for our market. Talk about buyers coming in! But I don't think the 'fierceness' of this action is sustainable and the past 2-3 weeks already seems to me to be more like summer - slower buy side requests and motivation to pull trigger down a notch or so. Lets just be real, if this pace of action were to sustain itself, that is an average of about 1,060 contracts signed per month putting us on pace for over 12,700 contracts to be signed for all of 2009 - a level that was achieved at the height of the credit boom in 2007 for Manhattan. Trust me that is not going to happen! The spurt was due to a combination of factors that I discussed before and is our markets way of equalizing itself after a sharp drop in prices and a subsequent shift from Armageddon to well, something brighter. We are at now now. The perma-bears expecting a one shot move down 50% were wrong and the perma-bulls that promised sideline buyers/foreigners would never let this market down were wrong."

Julia -- tell those ants in your pants to relax. It's been said many times -- sales will happen all the way down. The NYC bubble is deflating (hear that hissing sound?), and it'll be a sloooow process. Your $500-600/sf alcove studios will most likely be making their appearance in a year or two. Patience.

Patience is a virtue...ive missed lower pricing in manhattan after 9/11 and regretted not buying then.....i hope im not repeating the same mistake now by waiting....

Funny, it was "a year or two" back in 2008 as well. I just don't believe the 50% down hypothesis any more. I think it's entirely possible that some of us waiting for the "perfect" moment to buy, when prices are really obviously a great buy, will simply miss the boat.

There is a summertime stalemate. This is but one on a stair-step pattern on the way down. Many potential buyers like Mhillqt are out there, but the NAR report yesterday was telling. Invetory of >$250k homes was at a 6 month supply. Inventory of >$1mm was at a 20 month suupply. Generally speaking, the higher end buyer is a more savvy, better capitalized buyer. Many times they have to get through boards with more stringent financial requirements than banks.

Eventually the three D's come to play...death, divorce, and debt and those force price discovery. Just take a look at the inventory in the Hamptons. There is a huge overhang and incomes, not matter how well Goldman is doing, will not recover former levels for quite some time.

I wonder if it is the sellers or the brokers who are slow to grasp the new reality of the market. For example, the listing at 370 Riverside Drive, 7A. They are asking $1,695,000. Yet, the same apt, 4A sold in '08 for $1,686,250. Apt 4A was completely renovated with top of the line appliances, etc. The new listing, 7A, is in serious need of work. I would have been interested in this new listing if they were asking a realistic price. But when you consider what you can get now for the $1500 psf, that they are asking, there is no point in even considering that apt -- a co-op with virtually no amenities, although decent financials. And, I have found in business that there is no point in negotiating with people who don't have a grasp on reality so I wouldn't even consider a lowball offer.

Why didn't the broker have a serious talk with the seller. Why take a listing without a reasonable chance of moving it in a timely way? Why go through the wrenching grind of lowering the price 3% every few months? They can only hope for a buyer that doesn't do research or a bank that doesn't care about comps.

"A year or two" back in 2008 still means 2010. Here's the Bubble Data again to remind you what happened from 2002-2006, and what WILL unwind:

Harvard Housing Affordability Study: New York-Northern New Jersey-Long Island, NY-NJ-PA MSA, Median House Price/Median Household Income Ratio

1980 3.1
1981 3.1
1982 3.0
1983 3.2
1984 3.4
1985 3.7
1986 4.4
1987 5.0
1988 4.9
1989 4.4
1990 4.2
1991 4.0
1992 4.2
1993 4.1
1994 4.0
1995 3.8
1996 3.7
1997 3.7
1998 3.8
1999 3.9
2000 4.2
2001 4.6
2002 5.2
2003 5.6
2004 6.4
2005 6.8
2006 7.1

now, for the math challenged: from 7.5 to 4.0 = -47% (did we actually exceed 8 in Manhattan in 2007?)

evnyc, it was also "a year or two" back in 2006. There are always going to be people who are "sure" things will crash at a date they specify - they might be right, but usually people who pretend they know these things so well are wrong (this is the crux of the infamous "idiots" thread). That doesn't mean the market won't come down though (nor does it mean it won't go up, of course). Ignore the prognosticators who claim to know more than anyone else. I don't think you'll "miss the boat" by waiting a bit, but it does help to be actively looking already in my opinion. In the end, as long as you buy something you love and can readily afford, I don't see much to worry about. Good luck!

"sellers don't seem to be moving down that much"

Sellers are impacted just as buyers, with this latest equity rally and relief/optimism/hope, whatever you want to call it, that comes with it. Some sellers feel way less pressured to hit a low bid or even a market rate bid because they feel their place should not be discounted as much.

Buyers are not budging, so we are seeing a bit of a disconnect again. Those that needed to sell, for most part did, and those that wanted to buy, for most part did, over past 12 weeks. Cant deny that.

And Sellers cant accept the fact that the 1 bed they paid $150k in 1996 which went up to $750k in 2008 would sell for $550k in 2009.......they are GREEDY bunch.....they want to net a $600k profit vs a $400k profit!!!!!!!!!!!!!

Buyers are gravitating to prime areas. If you're going to buy into an uncertain market, your best bet is to buy into a great area and a great building. Inventory in prime areas sucks. When anything good comes up that is priced with a nod to expected peak discount, its gone. Your 50% drop will never happen in prime UWS, UES, WV etc..

West34,
While this data is all well and good, NYC in general and manhattan in particular is characterized by a wide disparity incomes. The NYC median household income in 2007 was $48,631 and manhattan was $64,217.
Assuming 7.5 affordability ratio in 2007 that comes to a median home worth 364,732.50 in nyc and 481,627.50. Clearly this is not the demographic on this board. Hence, while the data you provided is illustrative, cannot be directly applied to the properties people are looking at on this board.

iam: I don't agree. We want to buy, have very good income (if we don't lose our jobs), great credit , significant cash in the bank (from selling in 05 and 07) and would like to live a human existence in at least 1200 - 1400 sq ft. But unless you are willing to put in new kitchens, new baths and live with an a/c barely clinging to the side of the building, the prices are astronomical. If we don't find reasonable housing options, we will continue to rent, save our money and hopefully retire somewhere where a second bedroom in not 9X9 with no closets.

evnyc, if you can find something that you like, that will meet your conceivable (and preferably inconceivable) needs for at least seven years, and something that seems an improvement over where you're renting, go for it.

but ask yourself what drove the increase in prices, and when that stopped. it stopped in late 2007 and then further in 2008, and it was horrifically lax underwriting standards and HEW and easy availability of other credit. it certainly wasn't increases in real income. yes, many of us have been claiming that prices were unsustainable for years, but as long as the engines allowing that to continue chugged along there was no room for falling prices. those engines are dead. it takes time for that reality to set in, and thinking that gains that were baked in for 8 to 10 years will disappear in a year or a year and a half seems impatient to me. and if they manage to reignite a bubble, do you really want to own during that? i think our employment situation is reasonably stable now, but i have no idea what would happen if we have a second major correction because the powers that be don't allow deleveraging to occur now.

Real estate prices have started to drop way before the market crashed last September. It's foolish to relate the housing market to the stock market like Noah does. Currently 24% of home owners are underwater on their mortgage. Unemployment is still raising and people are not spending enough to jump start the economy again.
We, on Street easy , shall all take the summer off. We're expecting the market to change in a NY minute but that won't happen. Like i said before, the patients will be rewarded. In the mean time, go to open houses, enjoy the free breakfast on Week end offered by developers, keep saving or enjoying the reward from the stock market while it lasts, the short term return on investment is much better that what you may expect from a real estate purchase. And once again, why paying $4000 every month to your bank when you can rent the same place for $2500?

iam: you're missing the point. Pick any average salary that you want, and cut the market up accordingly. Does $100,000 average for professionals south of 96th street buying coops make you happy? Then a multiple of 7.5 gets you to just about the peak bubble price for a one bedroom coop - $750,000. The idea is that the relativity to average incomes was skewed EVERYWHERE and at ALL price points.

Now if you're going to spew the inane "Manhattan is different" or "West Village is different" argument that just showed up again, I cant help you. I've been in Manhattan since 1989, saw what can happen to prices here in the 1990s (EVEN IN THE WV!) - I had a boss, partner in my firm, who was begging someone to buy his nice one bedroom in prime East 70s back then for $90,000 - a $40,000 loss! I bought my coop for practically NOTHING at that time. It happened before, it'll happen again. Anyone who says ANYWHERE on this island is "different" or impervious to a potential 50% drop from peak is a f'n idiot.

Some perspective from the front lines (after a hiatus from these boards). I ended up buying my apartment in spring 09, pulling the trigger in part because i sensed that quality inventory for my price range was going down, not up. There were a whole slew of properties I couldn't live in without substantial work, but not a whole lot that were easy to justify for the asking price. I found "the one" in a good area (Soho, north of Broome) and jumped at it because given where the market was at the time, good apartments were getting snapped up while lousy ones languished. I now pay less in mortgage & maint than I did in rent, and certainly less for the area I live in (moved from non-prime area to prime area, for argument's sake).

This calculus is what all of my friends are going through right now, and I have at least 3 or 4 friends who are hungry to buy and will do so over the next few weeks/couple of months. They have stable jobs and have been in the workforce for barely 2-3 years, and with a combination of manna from heaven (parental gifts/inheritances/personal savings) and a strong base income, can easily afford to buy their first place. This is probably what is propping up the lower end of the market for the stronger starter properties, including the alcove studios and small 1brs that Julia is talking about.

we saw a virtually unprecedented (in terms of its breadth) plunge in prices of all risky assets from 9/08-3/09. since that time most every asset class has seen a significant retracement of those losses. why should manhattan real estate be immune and keep plummeting? oh, i know, b/c ny is different

Re: I have at least 3 or 4 friends who are hungry to buy and will do so over the next few weeks/couple of months. They have stable jobs and have been in the workforce for barely 2-3 years, and with a combination of manna from heaven (parental gifts/inheritances/personal savings) and a strong base income, can easily afford to buy their first place.

Julia -- in other words you are competing against buyers with absolutely no sense of real estate history and as a result are willing to pay prices that are still wildly bubble-inflated. And over the next couple years they will lose whatever equity they put in at purchase.

printer, because the retracement of those losses has been a gift from the government. and the government, at least for now, in terms of real estate, is being fairly stingy extending that gift. as West34 writes, the vast majority of the buyers now are Julia's competitors, buyers who qualify for conforming loans, who have no sense of history and are unaware that the 25% declines that they see do not represent anything near bargains, who haven't considered the properties in the next price bracket which they may need when they attempt to move up (those properties will be lower in price when they need to move up, but they most likely will have lost any equity from this purchase).

I'm pretty much with walterh7 on this one. Summertime stalemate - be patient and look again in the fall for signs of prices moving further down or holding at some kind of plateau. Also, a lot of the forces that brought the market down are still in place, although somewhat moderated. My own view is that there is still downward pressure that will bleed into prices - particularly at the middle to higher end - for quite a while yet. I just don't see where the bids come from to absorb the new condo 2br and larger influx plus the steady inflow of inventory from the natural cycle of the 3D's. If the bids aren't there, prices fall until they are. Supply and demand.

"They have stable jobs and have been in the workforce for barely 2-3 years, "

are you joking? even my dentist is complaining about money. by definition, if you've only been working for 2-3 yrs, you're gonna be out next.

"since that time most every asset class has seen a significant retracement of those losses. "

how about phoenix real estate. how much is that up?

"Anyone who says ANYWHERE on this island is "different" or impervious to a potential 50% drop from peak is a f'n idiot."

Cool! Let me make sure I understand your point West34. All areas will fall to similar depths based your personal experience from 1989? Do you not think there may have been a slight change in personal wealth and demographic between 1989 and 2009? No impact though, right? K, think I got it.

So all you WV buyers be sure to quote East Harlem declines when submitting your offer. Its all one island.

it's interesting but studios in prime areas (west village, etc) have not dropped...also 130 east 18th street non-alcove studio went into contract at $425k for a small, unrenovated studio.

printer: It should continue to go down or --at the very least -- stabilize here for years because it did not go down as the real estate in the rest of the country tanked. It did not go down here 2007 - 8 because the dollar/euro was favorable for european buyers to come here and buy. They supported the market when it should have been going down. They now have their own financial problems and will not be back here for a while. The only buyers that could sustain this market now are the Chinese. The Chinese government will certainly buy commercial property in NYC but if you know anything about the cultural/financial peccadillos of the middle- upper classes in China, you will know that they will not come in and buy in NYC. Perhaps you will continue to have the odd Chinese or Indian or Russian billionaire buy but that will be the exception and only at the high end.

West 34's premise is supported by some very sober and significant minds -- like Robert Schiller and Bill Gross. Wall Street will never again support the re market in NYC as it once did. It might get better at the fringes -- like Booya's crowd in the low end and the Forbes 400 bunch at the high end but the middle and upper classes will not be able to continue to support these prices.

I am a willing buyer here even though the market might go down. I can assume that in my plan vs. lifestyle issues. But there are many like me who are not willing to buy other peoples losses. I will rent rather than buy at 2007/2008 prices. Too many sellers and developers are not yet getting that message. But I think they will. And therefore, yes even though other asset classes are going up (this week), prices can and will drop from here.

about - your constant blaming the gov't because things aren't going your way is pathetic. let's see - they caused the bubble via low interest rates, etc. then they caused the crash via not bailing out lehman, then they cause the recovery b/c of liquidity. amazing stuff.

and yes, right now most of the buyers are in the conforming category. but with wall street incomes on track to show a sharp increase from last year, in fact perhaps the 2nd best year ever, you'll see those buyers stepping in early next year - maybe even towards the end of this year as certainty nears on those payouts.

before this stabilization started, all we heard was 'you need 1st time buyers - without them coming on board at the foundation of the market, you can't see improvement'. now that they are on board, it's 'they're all stupid, and anyway it doesn't matter b/c we're not seeing improvement at every single level, in every neigborhood and price point'. everything doesn't move at the same time.

same things on the economic front - cost cuts lead to earnings lead to spending/revenue growth. all the bears can't see that we're on the way towards our destination. only when we get there will they say 'let's go'.

still wondering about the big rebound in phoenix real estate or california or florida for that matter.

what are you wondering about? phoenix, california and florida have all seen massive increases in activity, which is the pre-cursor to increasing prices. in fact, prices have increased in the past few months in many of those areas.

here's just one example - the Bay area, which I think is the most comparable area real estate wise to NYC in the united states. Prices up 3 months in a row.

http://www.dqnews.com/Articles/2009/News/California/Bay-Area/RRBay090716.aspx

"all the bears can't see that we're on the way towards our destination. only when we get there will they say 'let's go'."

Of course, the bulls are there shouting "he we go toward our destination" while the car was rolling backward down the hill!

But, after a few years of calling the direction wrong, suddenly THIS is the month that they stop making the mistake... right?

suuuuure

"Trompiloco, actually sales of late have been going at a near-record pace, believe it or not (average of 1,060 contracts per month!). Highly doubt it'll stay that way of course. urbandigs has a good post on this:"

Unbull conveniently left out the part of the post where UD reverses himself...

"But for those that come here for real time conditions, combined with a little gut feeling, my opinion is that the wave of activity has peaked and that we are now slowing down the way it usually does for summers in Manhattan"

> Am I wrong...rentals are falling fast but sellers don't seem to be moving down that much.

Yes, you are wrong.

right, as opposed to the bears who were calling for the bubble to burst every year since 2000. they were right, eventually. of course they missed a doubling of prices and saw their rents jacked up for 7yrs in a row while they were waiting.

my old colleague was telling me that I should wait till next spring to buy, after residential market gets hit once again by the fall of the commerical real estate in nyc. He's a REit analyst and it seems to be the notion in his industry. I'm looking at open housese, to see if there are any good deals to be had(big discount), but certainly will not buy at the current level as the chances of it falling further seems most likely.

"Unbull conveniently left out the part of the post where UD reverses himself..."

Reverses what exactly? The activity was there and was real, and I clearly posted his thoughts on why that trend WON'T continue. Read the rest of the post before you start typing, but this is typical you of course.

spin -- let me guess -- you just bought in the WV? In that case, you're right, the West Village is different -- prices will not drop there. Feel better now?

But if you're in the mood to think, how about the concept that WV prices, let's say, hit ppsf peaks in excess of $1500 (versus, gee maybe $1000-1200 for all Manhattan nabes?) based upon a possible net influx of higher incomes on average for that area. If the net ratio of those prices to THOSE incomes is still skewed to historical (and most would argue unsustainable!) highs, why does that preclude a 50 PERCENTAGE point reduction? Oh, I remember, because the WV is diiiiiifffferrrrent!

there is no sense in owning in NYC. Renting is a much better deal. The prices will go down when the distressed selling starts which will most likely be this winter. Only an idiot would buy in NYC right now. Obama is about to tax NYC into the grave

Oh and spin, I'll be actively shopping for 1000 sf on lower 5th Ave in about 6 months with $700K cash in my pocket -- should I not even bother? Is the "regular Village" different too?

"Reverses what exactly? The activity was there and was real, and I clearly posted his thoughts on why that trend WON'T continue. Read the rest of the post before you start typing, but this is typical you of course"

And then left out the part where he notes that it isn't just a prediction (as you again are inferring), he noted that it has actually changed.

This is typical you.

west34: iam: you're missing the point. Pick any average salary that you want, and cut the market up accordingly. Does $100,000 average for professionals south of 96th street buying coops make you happy? Then a multiple of 7.5 gets you to just about the peak bubble price for a one bedroom coop - $750,000. The idea is that the relativity to average incomes was skewed EVERYWHERE and at ALL price points.

if you think that co-ops were letting individuals purchase $750k apartments on $100k incomes, then you truly don't understand this market at all. go back to phoenix

"right, as opposed to the bears who were calling for the bubble to burst every year since 2000. they were right, eventually."

But they were also right about it being a bubble the entire time, and the bulls wrong about it not being a bubble the entire time. They're called bubbled because you don't know exactly when they pop.

Pretending its an even swap is ludicrous.

The bulls were fundamentally wrong about RE, and the bears were fundamentally right.

"of course they missed a doubling of prices and saw their rents jacked up for 7yrs in a row while they were waiting."

Yeah, I remember the "geniuses' who talked about the price runups the "inferior" people "missed", too.

How's that price appreciation working for you? Still own pets.com?

Thanks for the laugh.

what are you wondering about? phoenix, california and florida have all seen massive increases in activity,

i am in Miami right now. There is an increase in activity because the prices of foreclosures are crazy low. And there are many, many more to come. Banks are withholding inventory so they don't flood the market and drive down prices -- also because they can't keep up with the paper work. There are massive new condo buildings that are completely empty -- like the luxury Trump and Jade buildings built last year. I just bought a luxury condo directly on Miami beach for 30% off the 2006 price. And prices here are still dropping but I am just happy to have the space vs. living in Manhattan. There will not be an increase in prices for years because there is so much inventory to absorb.

You can't look at the overbuilding here and not wonder about the overbuilding in NYC

"And then left out the part where he notes that it isn't just a prediction (as you again are inferring), he noted that it has actually changed."

Where did I write anything about predictions? And what difference does it make anyway? If you read into what I wrote that I think the crazy levels of activity will continue, you're nuts. To borrow aboutready's phrase: piss off.

"his thoughts on why that trend WON'T continue"

Thats called a prediction, genius.

"To borrow aboutready's phrase: piss off."

Lying bull shill, take your own advice.

nyc10022 - for someone who bought in 2001 its working out great. avoided 7 yrs of rent increases, which even after the tumble this year are still higher than back then. paid down some principle. probably re-fi'd and have a 5.5% or lower fixed rate. and have seen their property appreciate by 30-40% even after the drubbing of the past 12 months. oh, right - that 'opportunity cost' of their downpayment - been a great stock market the past 8 years, no?

well, if you sold in 2004/05 like many bears were calling for and put you money in the market, you could cover your rent and then some with the appreciation. of course the market eventually turned down abruptly but you could sell everything in a matter of seconds as you saw the dow tumble --as many did. but good luck getting out of a major asset like an expensive co op before the 25% route downwards. if anyone was able to sell the day after lehman collapsed they deserve the genius award.

Went to Phoenix once - too hot for me. Let me explain market DATA to you -- the "average income" in a market and something YOU want to call "the average income of people buying a specific type of coop" in a market are two different numbers. It's a frequency distribution versus a point on that distribution -- get it?

Here's some numbers I made up to show you how it works:

Income
50000 10% 5000
75000 50% 37500
100000 20% 20000
150000 13% 19500
250000 5% 12500
500000 2% 10000
Average 100% 104500

In my simple example, the 20% of people over $150,000 are BUYING the coops but the average income is only $100,000. See, not EVERYONE in the income distribution buys!

West34 - I recommend you sit and wait then for you and your throngs of contemporaries to agree on the appropriate time to rush the market. In the meantime, keep smilin and enjoy watching all the thousands of naive and uninformed 09 buyers crash and burn.

all the crash and burners of '09 as well as' 06 '07 and '08 will never allow themselves to be burned again. do you think that the buyers of the Harrison and the Rushmore and the Caledonia and Avonovo and, and, and... .. will every overpay again? That is why this market will not go up for a long time.

west34 - and this proves what, exactly? if manhattan truly saw the degree of price/income disparity on purchases that you are claiming, where are all the foreclosures, such as we've seen in, say, Phoenix? Prices have come down primarily because incomes and wealth have fallen, not because of price/income contraction. Rents are much more correlated with incomes, and those have fallen, say 20%, while prices are down, say 25%. so most of that decline is due to fall income.

The foreclosures that we'll see will be in the busted developments - in other words, the places that DIDN'T sell.

"nyc10022 - for someone who bought in 2001 its working out great. avoided 7 yrs of rent increases, which even after the tumble this year are still higher than back then. paid down some principle. probably re-fi'd and have a 5.5% or lower fixed rate. and have seen their property appreciate by 30-40% even after the drubbing of the past 12 months. oh, right - that 'opportunity cost' of their downpayment - been a great stock market the past 8 years, no?"

Oh right, sounds just like the guy still claiming "victory" when pets.com had only fallen 20%...

"Thats called a prediction, genius."

Like I said, what difference does it make?

"Lying bull shill, take your own advice."

Completely unfounded accusations (still waiting for the evidence) will get you nowhere. This is the kind of bs that should be on Curbed, not here.

the bear anxiety builds....

what the h-ll are you people waiting for exactly? The recession is over. The quarter we are in now, Q3, will show POSITIVE GDP. Wages and bonuses are increasing. Employment numbers are improving, new claims, 4 week moving avg etc. Rehiring is probably to begin in Q1 2010(6 months away). Sellers know this and they will not sell at a discount NOW, with better times ahead and demand back. The time for your discounted purchase was in Nov08-April09.

Oh another note: it's July 24th already another 5 weeks and summer is pretty much over. So your summertime slowdown is nearing it's end.

To The Still Holding Out Bears: What is the color of the sky in your world? I can't believe you don't see the positives. The only thing that makes sense would be that you don't have the financial means to buy and you NEED a crash. Then I can understand. Otherwise and I'll use nyc10022's favorite: your all idiots :(

> Like I said, what difference does it make?

I love it, argue it, and then complain that I'm arguing!

> Completely unfounded accusations (still waiting for the evidence) will get you nowhere.

Your inability to read is apparently getting you nowhere. Well established, and I even named the specific threads last time you claimed "no evidence".

If your honesty is so clear, why do you feel the need to keep screaming?

At least in the short run, demand seems to be catching up. Fiscal policy is starting to show an impact and first time homebuyers want to take advantage of the tax credit.

julia, unfortunately at the $400k price point, those loans are all conforming and in many instances may even qualify for FHA financing (for condos). not surprisingly, those apts have fallen less than the high end.

so columbia - you call me out, i produce the evidence to back up my claim, and nary a peep from you? figures.

They aren't falling? From what I see they are. . .little by little.

huh? missed your evidence of the huge price increases in phoenix.

"well, if you sold in 2004/05 like many bears were calling for and put you money in the market, you could cover your rent and then some with the appreciation. of course the market eventually turned down abruptly but you could sell everything in a matter of seconds as you saw the dow tumble --as many did. but good luck getting out of a major asset like an expensive co op before the 25% route downwards. if anyone was able to sell the day after lehman collapsed they deserve the genius award."

well most of my college/friends/colleagues/grad friends started buying from 2004-2005 as they started to saved enough for downpayment, and they are pissed, because if you are a first time home buyer and you bought for 5-10 year horizen, it's extremely hard to sell and buy a house like a tradable asset, as you would suggest. They scraped and saved to buy an apt only to lose most of it. I remember few years back there were those "how to be a millionaire shows" where Corcoran and the gang came out flaunting their successes, telling people to save, borrow, steal, do anything you can to buy a house as it'll be the best investment you will ever make. Hey, she convinced me to look for an apt in 2008. thank God, I listened to the real (learned) real estate professional, as opposed to a broker, I was going to pull the trigger in Jan 2008, until I felt extremely uncomfortable with how agresive my broker was pushing me to buy.

"Well established, and I even named the specific threads last time you claimed "no evidence"."

More bs. You enjoy talking about it more than showing a shred of evidence. And it's not "screaming" - it's rejecting your ridiculous accusations.

"but ask yourself what drove the increase in prices, and when that stopped. it stopped in late 2007 and then further in 2008, and it was horrifically lax underwriting standards and HEW and easy availability of other credit. it certainly wasn't increases in real income."
AR, no disagreement whatsoever, but the gov and the fed are doing their damndest to keep the bubbles percolating, if not reinflate the grand bubble altogether. They're kicking the can down the road, and doing a shockingly good job of it. If the can gets kicked for another 20 years before everything collapses, that sort of means that real estate might bump along as is for the foreseeable future. Still presently sidelined, but wondering whether I'm not missing the boat. Not that I am ready yet to catch it, quite.

Re: where are all the foreclosures...?

That is the $10,000 question, right? And that is what I'm watching and waiting for. I can only offer a lame anecdotal response that I know quite a few people in banking, law, publishing and advertising who no longer have incomes, have big mortgages, and are in serious flop sweat as their savings/severances are running dry! we shall see.....

still a lot of liquidity available to sellers....bulk of the owners still do not understand that the market has gone down at all. this takes time to unfold.

> You enjoy talking about it more than showing a shred of evidence.

Yes, I wonder what all those other posts were about. You can say "there is no evidence" as much as you want, but folks can simply read the theads if they care... and you and I know the truth.

"You can say "there is no evidence" as much as you want, but folks can simply read the theads if they care... and you and I know the truth."

I'll spare them the work and your complete bs. Here's a post of mine from 15 months ago (ie: well before you were around these parts). Tell me how this is bullish; otherwise take your garbage elsewhere:

"spunky, peaking isn't easy to guage really, but I would say that yes, pricing has mostly flatlined, and in quite a few cases, dropped. I don't think the general trend will be rising prices in the next 6-8 months, so that's why I'd call it a peak. But that doesn't really matter much in the long run. I think it's just healthy to see a little more balance in negotiation for the market. And I don't think it's just crappy apartments, though you're obviously right that well-priced product that is highly attractive will sell quicker (isn't that a bit of a no-brainer anyway?). It's too easy to start hardcore rooting for appreciation (or a major drop if you're on the other side of the fence) in pricing once you've become an owner. Part of me really resents the elitist attitude adopted by RE owners vs renters. Yeah, I'm glad I'm buying, but I want others who want to buy to be able to do so as well.

tenemental, good to see you too - been busy with the mortgage and prepping for closing, but I'm still paying attention to the market. Anything interesting popping up in the EV? I'm predicting the fall will be very kind to you."

http://www.streeteasy.com/nyc/talk/discussion/3445-shiller-housing-slump-may-exceed-depression

> Tell me how this is bullish;

exactly how does that mean that you didn't lie about all the things you lied about?

> otherwise take your garbage elsewhere

I say the same to you.

what are you wondering about? phoenix, california and florida have all seen massive increases in activity,

well, that is debatable. many seasoned analysts are worried by the commercial real estate debacle about to happen. bill gross -- who is moderate and reasoned unlike the deathly roubini--is calling for a W bottom which means we will go down again and retest the lows. And, this downturn is unlike any other in history so a modicum of restraint might be a good thing. Don't you think the hedge funds and NY banks have a hand in the commercial downfall coming in Miami and Las Vegas....and NYC (666 Fifth Avenue?) They have their hands in all of the big commercial transactions. How will that affect NY real estate when all these transactions start to default and more hedge funds go under.

"still a lot of liquidity available to sellers....bulk of the owners still do not understand that the market has gone down at all. this takes time to unfold."

Absoultely. Every day I run into people who are only now just learning this.

Personally, I think the majority of owners didn't know Manhattan was dropping at all until the Q1 reports came out, which wasn't too many months back. The ones who did know, many I've talked to thought it was a blip of some sort.

The rest of the world isn't streeteasy, where 20-30% declines are met by yawns... this is news to a lot of 'em.

columbia - nice - change the debate. when did i ever claim that prices in phoenix were rising? never. places like phoenix, LV, miami, inland empire CA are there own world. they are like the webvans of the tech bubble, manhattan and san fran are more like the ibms, cisco's and apples. so i think it is very relevant to compare NYC to San Fran, which from a price, income and land constrained sense makes it the closest thing to a comp you have our there. and prices there have certainly stabilized and started to move up - 3 months in a row of increases in the median. and case-shiller's latest reading also showed a slight improvement month over month. them's the facts. you can ignore them all you want, or massage them out of context, or change the conversation, but either way you are dead wrong.

and to your later post

'still a lot of liquidity available to sellers....bulk of the owners still do not understand that the market has gone down at all. this takes time to unfold'

really? which liquidity is that - all the home equity lines that are being thrown about to laid-off people? the $405/week unemployment check? no - its their substantial savings, which point out how NYC market is, in fact, sharply different than the rest of the country in terms of the creditworthiness and financial strength of the buyers, even at the peak.

and do you really think that the well over 50% of the owners think the market hasn't gone down at all? i mean, come on, - just b/c things aren't working out your way, you don't have to blame it on other people's supposed stupidity - just your own, very real, stupidity has gotten you where are you just fine.

"well most of my college/friends/colleagues/grad friends started buying from 2004-2005 as they started to saved enough for downpayment, and they are pissed, because if you are a first time home buyer and you bought for 5-10 year horizen, it's extremely hard to sell and buy a house like a tradable asset, as you would suggest. They scraped and saved to buy an apt only to lose most of it. I remember few years back there were those "how to be a millionaire shows" where Corcoran and the gang came out flaunting their successes, telling people to save, borrow, steal, do anything you can to buy a house as it'll be the best investment you will ever make. Hey, she convinced me to look for an apt in 2008. thank God, I listened to the real (learned) real estate professional, as opposed to a broker, I was going to pull the trigger in Jan 2008, until I felt extremely uncomfortable with how agresive my broker was pushing me to buy."

Good color.

I agree... I feel like frenzy really only came in those years, and it was wacky. And, maybe its the age thing, but I know a whole lot more people who bought in those years than before. Hell, if that wasn't the case, you couldn't have really had the appreciation now, could you? At the bottom, people generally weren't buying, hence it being the bottom.

But, in the end, yes, waaay too many people were misled, and we could have only gotten such a bubble if so many people had been suckered.

"exactly how does that mean that you didn't lie about all the things you lied about?"

It debunks your accusation, and you keep spinning to something else. Go figure. The only lies exposed here are yours.

"its their substantial savings, which point out how NYC market is, in fact, sharply different than the rest of the country in terms of the creditworthiness and financial strength of the buyers, even at the peak. "

But, unfortunately, that was already priced in.

Its sort of meaningless to say things like "yes, Manhattan buyers are different".... because those things are why are prices were already several factors higher. They aren't going to help Manhattan have less of a decline... in fact, there is more positive factor to LOSE here, so if anything, thats a negative.

Personally, I think the majority of owners didn't know Manhattan was dropping at all until the Q1 reports came out, which wasn't too many months back. The ones who did know, many I've talked to thought it was a blip of some sort.

wow nyc10022 - this explains a lot - you hang out with a quality crowd.

boy you really are dumb. if foreclosures are driving the market lower in the rest of the country, particularly the hardest hit areas of phoenix, LV, et al, but NYC won't have anywhere near that degree of foreclosures because of the higher credit quality of the buyers, then it follows that we won't have that degree of downward pressure on prices. its not that hard to understand - if i can hold on to my apt, that's one less place out there on the market at fire sale prices.

> It debunks your accusation

No it doesn't. That isn't one of the lies I pointed out. I can call you what I want to call you. You can call me an "extremist" all day.... but thats not as bad as your blatant lies.

If I call your mom a ho, it doesn't mean you didn't lie, either.

Nice try, though.

"Personally, I think the majority of owners didn't know Manhattan was dropping at all until the Q1 reports came out, which wasn't too many months back. The ones who did know, many I've talked to thought it was a blip of some sort.

wow nyc10022 - this explains a lot - you hang out with a quality crowd."

Yes, you are right... I know way too many people like you and perfitz, who don't understand markets. This is why folks should be taught basic financial literacy.

We wouldn't have had so many people making stupid moves buying in the bubblle.

"boy you really are dumb. if foreclosures are driving the market lower in the rest of the country, particularly the hardest hit areas of phoenix, LV, et al, but NYC won't have anywhere near that degree of foreclosures because of the higher credit quality of the buyers, then it follows that we won't have that degree of downward pressure on prices. its not that hard to understand - if i can hold on to my apt, that's one less place out there on the market at fire sale prices."

Wow, how dumb are you to think that

1) foreclosures are the only factor driving down prices
2) foreclosures are not also a RESULT of the market, not just a contributor.
3) NYC doesn't need to have the same "degree" of foreclosures to have an impact, because the "quality" has already been priced in!

Seriously, take a financial literacy class... then start calling folks names.

Its really funny when folks are so dumb they think the people who know better are "wrong" because they don't understand the answer.

"No it doesn't. That isn't one of the lies I pointed out. I can call you what I want to call you. You can call me an "extremist" all day.... but thats not as bad as your blatant lies.
If I call your mom a ho, it doesn't mean you didn't lie, either."

It does actually, until you provide any evidence to the contrary or somehow spin what I wrote into being "bullish." You do the same thing with the "lies" - constructs of your imagination. Classy to bring up someone's mom on here too; am I arguing with a 12-year old here? That would be sad.

NYC10022 says that I dont understand the markets. Hmmm he is a renter paying someone else $60K per year to live in a peive of crap little apt. I bought 22 units in 2001 where losers like nyc10022 are paying me over 50% of their take home pay to live in my crappy little boxes.

NYC10022 claims to know the markets and claims to be a great market timer. He also claims to "make" money by renting.

All my properties were just appraised again at over 250% of their original purchase price. When you calculate what i put into them i.e. downpayment my return on investment is inthe several 1000 x.

Yeah NYC10022 your landlord loves the fact that you think you "know" the markets. You have paid him over $180K in the last 3 years. You are truly brilliant.

Perfitz, you are obnoxious. In 2001 buying made mathematical sense. It hasn't since 2003. You act as though renting has no value, yet paying a mortgage automatically does. Clearly its better to be lucky then smart, because you don't seem to understand what you did, when you did it...Which smacks of someone elses money.

evnyc, they'd love to kick the can down the road for another 20 years. they can't, they're broke, another 20 months may be possible. there's no demand. the rich are sitting on their riches, but the peons can't buy anything from them because they've been stripped of a hell of a lot, and what they still have they feel compelled to hold onto, at least far more so than the last 20 years. and really, the powers that be have unleashed an arsenal of weaponry over the last year, and still unemployment is marching upward and many states are about to implode. what else is available? interest rate movement? nope. debt? record treasuries being sold next week, i think the government is trying to sell while the selling is still good, and i seriously doubt that will be for much longer. accounting tricks? we'll see, but even there the party may be over soon. free money for banks will continue, as will revenues from selling municipal debt, but i don't think that will be able to offset mounting losses from other credit losses.

i understand your frustration, until i decided i didn't care one way or the other i felt it myself. now i'm frustrated because it seems the focus is so utterly skewed in favor of the success of the financial industry, at great cost and potential cost to the average people. but this is unsustainable, and if they do kick the can further, i repeat you're better off having the mobility offerred by renting.

Renting is never a waste of money, because money costs money, and so does shelter. Buying right is great...buying any time is just stupidity and that has already been proved out, again, as it has been time and time again. When the cap rate it right, it will be time to buy again. So far, its just not.

"they can't, they're broke, another 20 months may be possible. there's no demand. the rich are sitting on their riches, but the peons can't buy anything from them because they've been stripped of a hell of a lot, and what they still have they feel compelled to hold onto, at least far more so than the last 20 years. and really, the powers that be have unleashed an arsenal of weaponry over the last year"

Definitely, aboutready. If they really have to prop it up that much, it can't go on for that long - as you've said, they've used most of their big bullets, probably hoping to have wounded the beast just enough.

"right, as opposed to the bears who were calling for the bubble to burst every year since 2000. they were right, eventually. of course they missed a doubling of prices and saw their rents jacked up for 7yrs in a row while they were waiting."

Really, because I think rents are basically flat since 2000. 2000 purchases are up a ton, no doubt. But that is the problem. That is why apartments have 50% downside. I think purchasers from 2000-2002 need to appreciate their windfall, rather then think they were smart. If they could really predict a historic credit bubble that would carry all assets to historic heights, they would be retiring now. Meanwhile, chances are that 2000-2002 purchases will prove breakeven to renting in the next two years.

precisely...wait and watch.

"they can't, they're broke, another 20 months may be possible."

You are a good researcher and have posted a lot of good data, not all of which I've had time to read. I'm sure you have a much better handle on the economics and the time frame of all of this. With the focus so skewed toward the success of the financial industry, I feel like we're engaged in a very grand-scale theoretical experiment. I keep thinking it's not going to work...but what if it does? Or at least 51% of it does? Then a lot of the historical data actually might fly out the window. My gut and my critical thinking skills tell me one thing: this is crazy, there's no way this stuff ought to be working. Yet my eyes and my ears keep telling me that a lot of it is working. I don't know what to believe.

well put...

here's the question you need to examine, I think.

what's working?

the stock market is way up over its spring low.

the formerly completely frozen credit markets are working with what appears to be much greater (and necessary) restraint.

anything else working?

Rhino - rents are flat since 2000??? I rented a 2600 sq. ft. 4-bed loft on Greenwich St in Tribeca in 2000 for $4900 - you're telling me I can get the same deal today?

Just came back to the thread, and printer, one thing I am struck by is how people automatically believe that the twin dogmas of "it's always better to buy" or "it's always better to rent." I also think it's interesting that people believe that in prime areas in major world city centers, income should correlate with real estate value - this is in fact NOT the case in major metropolitan cities around the world: Tokyo, London, Singapore, Delhi. The truth of the matter is most middle-class indians will never, ever own a piece of real estate in Delhi, nor dream of it. Of course these areas are bubble prone, and historically, bubbles have led to the gentrification of fringe areas and deflated asset values - but the tide turns over and over and over again.

don't mind Rhino OTNYC. He is the village idiot.

I'm still waiting to hear how you "make" money by renting????