Only an idot would buy in NYC right now.

I luv when markets are "poised" ... it reminds me of beauty pageants, and that's just beautiful.

"fall another 50-70%" care to back such an audacious claim with any facts, there anon3?

Let's assess another of your statements: an apartment now at price x and sq/ft Y will be, in a couple of years, price x and sq/ft 3Y. so you are saying, quite definitively, that the 1,000 sq/ft you can buy for $800K on the UWS today will buy your 2,000-3,000 sqft in 2 years? haha. cocaine is a hell of a drug.

looks like anon3 = idiot. remember me?? :)

it is true that only an idiot would buy in NYC right now.

what's an IDOT?

I'm not an economist but there are many positive developments going on right now. Stocks are much recovered (although apparently not going up anymore), indicators like housing starts, retail sales, consumer confidence, bank profits, industrial production, etc have become much more positive lately. Employment is considered a "lagging" indicator and won't recover until well after the economy is growing again. But I hear you, it feels risky as heck. But who gets a reward without taking a risk?

NYC RE is poised to fall another 50-70%

anon3 that quote above is the basis for my calling you an idiot. Also since everyone else on this board is inquiring about buying then they must be idiots too huh? So why would you spend time communicating with all these idiots? it looks like the only idiot left standing is you idiot.

Wine prices are recovering too. The easy street renters may just be too pessimistic.

TheGoodLife....standing ovation!

anon3 is bitter because he's still priced out of the market even with the recession.

Living the life of Riley no doubt

wow that's an expression from the 1880's...

Also, keep in mind that you can never pick the bottom (or top) in a market. The Case-Shiller home price index is down 33.6% from its peak in mid 2007. Could it go down more, yes. But are you buying the highs? No, it doesn't look that way at all. If you buy a place and it goes down 5% over the next two years but then recovers over the next two years, you still might be better off over a 4 year horizon buying rather than renting - depending on the true after-tax expense of each option.

More good points.
The only buyers that SHOULD be afraid here, are those that face a high probability of selling within the next few years(They'll get killed in transaction costs)

NYC's unemployment is actually lower than most other cities.

NYC: 10.3%
Los Angeles: 13%
San Francisco: 10%
DC: 11%
Chicago: 11%
Houston: 9%
San Diego: 10.5%
Las Vegas: 13.5%
Detroit: 17%
Miami: 11%
Atlanta: 11%

it will be intresting to see how far it goes down, but it will be a renters market for the next 3 or 4 years. That is for sure and why it is true that only an idiot would buy in NYC today.

"That is for sure and why it is true that only an idiot would buy in NYC today."

Ah, fearmongering, where would you be without the internet?

AH, in today's real estate world which market would be crowned Miss Universe? i have a fond spot for dubai in that contest.

AR, I think it would have to be a city that's fully enclosed in a burkha.

HOT!!!!! (And all poise.)

"AH, in today's real estate world which market would be crowned Miss Universe? i have a fond spot for dubai in that contest."

My vote goes to Pyongyang. Burkha or no burkha.

That can't be true!!!!
We got tons of idoits right here...
They would be out buying right now....like me

Well, there's a fair amount of worry out there that we could be headed for a "double-dip" recession, where de-flation starts in again after a period of relative stability.

Setting aside some of the sharp comments here, I think it's reasonable to bring up these worries in a discussion that touches on whether or not we've hit a bottom for housing prices in the city. If the fears of a double-dip recession come true, then we almost certainly have not touched bottom yet.

iDOT is the latest apple gadget that plays music, takes/stores pictures, and surfs the web while being the size of the dot above the "i" in times new roman font 12.

No, it's the bureaucracy that administer transportation stuff in Iowa (or Ohio; I always confuse them ... somewhere on the mainland, anyway).

Who really know how far this thing may fall. If you say DEFINITELY 50-70% more you sound foolish. If you say DEFINITELY CAN'T HAPPEN, you are equally as foolish. No one should be saying anything is definite. Is it very likely that we'll completely collapse? Probably not. It is possible that we could see continued declines and it is a remote possibility that we could fall of a cliff again because the underlying wealth creation that has driven the last bubble is just not there.

What is going to make us richer in this country? We need some sort of novel idea or industry (think dot.com's, think derivatives) to propel us forward. Right now, I don't see anything that can do that. For a second I thought green energy would be that mechanism, but it isn't catching fire like it should due to relatively low gas prices.

So the answer is, yes it is possible for RE prices to drop significantly from here. The question is, would it be any fun to live in a city where a 3-bedroom on Park avenue costs < $1 million?

I DISAGREE....i dont foresee real estate going down further...and i feel like buyers have lost the upper hand they had for a few months

It's tough to make predictions, especially about the future.

NYCROBOT:"The question is, would it be any fun to live in a city where a 3-bedroom on Park avenue costs < $1 million?"

Answer: YES.

I wonder what the rise in rates after this year.

The toned down version of anon3's original comment is this. With rents falling, banking hiring of grads down 70%, the ratio of owning to renting still at historic highs by any metric, and interest rates basically as low as they can get....there is no upside imaginable here. Anything can happen, but there doesn't seem to be anything to drive it up. As much as people like to site the stock market rally, its still 30% off peak...and so is this real estate market basically... And yet again, I'll remind you the stock market and real estate moved in opposite directs in the early 1990s.

It's tough to make predictions, especially about the future.

eh.. Bohr said it better.

"Prediction is very difficult, especially about the future"

As much as people like to site the stock market rally

nope wine market. If people will blow $3,000 on a Bordeaux they should be willing to pay more for real estate. Risk appetite for better or worse is increasing.

"NYC RE is poised to fall another 50-70%"

This statement has the potential to be as famous (and accurate!) as "Buy now or be priced out forever" has become on the other side. I'm getting a post in on this thread just so I can prove that I was around for the creation of such iconic idiocy.

Prediction is difficult is the second worst bull argument presented here. The worst is - well look the stock market is up.... The stock market being down 35% from highs is a great reason for real estate to rise from 25% off the highs, especially when loans are so easy to get and so many condos are empty.

There's more money on the side-lines than the Easy Street Renter/Arm Chair quarterbacks realize.

This is actually the only decent bull argument...and only time will tell if the money is there, and if its interested in Manhattan real estate at these prices / whether or not it already bought on the way up. Money on the sidelines has a lot of options. Stocks are working better than real estate right now. Just like after the '87 crash.

RS: kind of like your comment re: ML bonuses? what does it mean that there is money on the sidelines?

It means nothing...but it can't be disproven...so it has that much going for it.

touche.

Anon3 is right: only an idiot would buy right now. However this 50-70% is too aggressive. Deutsche bank predicts a further 35%.

There's not much money on the sidelines. Whatever exists is smart and of the investor kind--otherwise they would have bought already. Pricing is irrational as it returns no profit--rather loss.

It means nothing...but it can't be disproven...so it has that much going for it.

LMAO!!!

Banks have money not invested. I wonder why.

Banks have money not invested. I wonder why.
DISINGENUOUS STATEMENT

I have most of my money in short term bond funds. 5% there sounds better than 3.5% cash on cash in a coop. I guess I have sidelined money. My price point is lower, however. Every sale at these levels leaves one fewer who finds it attractive. Argue sidelined money...but please dont argue new wealth creation on a par with the peak years.

easy street's favorite tv station fox had a money manager on that caters to hollywood
biggest allocation: tax free munis!

Not disingenous...everyone is reevaluating leverage..both individuals and institutions. I would no longer even consider the size loan I might have in 2006 or 2007. And the bank prob wouldnt consider giving it to me.

Rhino, The Easy Street Bears equate any argument against lower prices as a bullish one. I'm not sure why they do, but arguing prices one year target of flat to negative 10% makes you out to be an irrational bull.

Renting has it's disadvantages.
1) Rental designed product does not equate with For Sale designed product
2) Owners are treated better(generally speaking)

If Prices don't plummet as stated in the bears case but merely stay about the same, a fair number of buyers could come back. Especiallly those that sold for irrational reasons.

Not disingenous.
of course it is, poster wasn't wondering at all. total bull shit post

so...now down 10% is bullish? how about those merrill bonuses?

I didn't accuse flat predictions of being irrationally bullish. What is irrational is buying when there are no decent bull cases.

Bring me up to speed Columbia

don't you remember citing $15 billion or so in ML bonuses. when I posted remarks from cuomo citing bonuses of under $4 billion, your answer was ?

It will take 3 years before we bottom. Wait until the stats start showing the new median and average closing prices - these numbers will freak sellers out -
For some selling is not the answer, but for vintage 2006, 2007, and 2008 buyers - if you can still get out do so now before you've got to declare bankruptcy.

Yea , i was wrong, figure most likely included losses.

Riversider
2 days ago
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Something about the Merger and bonuses smells, I"m not sure what but...

$15 billion in bonuses against a $50 billion purhcase price(30%)

Proxy reported that Merrill could not pay bonuses without Bank of America’s approval, but failed to mention that such approval had been granted.

where there's smoke there's fire.....

columbiacounty
2 days ago
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according to the times, "the attorney general of New York State, raised hackles by disclosing how Merrill Lynch distributed its $3.6 billion 2008 bonus pool." where does the $15 billion figure come from? and why was it up to thain to disclose instead of lewis?

marco_m
2 days ago
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It was a ridiculous transaction no doubt...Im sure some of that bonus money will get clawed back eventually. that was the weekend lehman went under so the government couldnt have 2 banks go down at once. they saved ML and let lehman go.

Riversider
2 days ago
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where does the $15 billion figure come from? and why was it up to thain to disclose instead of lewis?

good question.. I can't find my original source. figure must be including the losses.

columbiacounty
1 day ago
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losses were $27 billion. don't want to defend any of these guys in any way but troubled by people throwing around numbers. oh well.

It will take 3 years before we bottom
opinion in search of data to support

how's your data on the $15 billion. kind of calls into question everything that you say?

cc the Merrill/BAC transaction raises lots of questions.
in only a short time a substantial percentage of the equity invested was gone
BAC disclosure was less than desired
over at the Potamac we were treated to a Kabuki show

The questions raised are legitimate.

Third quarter sales prices will be out in a couple of weeks and should give an interesting perspective on what's been happening this summer in Manhattan.

My impression is that studios have been reasonably stable but two and more bedrooms have continued their price declines - probably in the 5% to 10% Q/Q area. One bedrooms are probably down in the 5% Q/Q area. New construction has probably seen declines pushing 10%.

rs: perhaps you should stick to the facts--you were wrong.

rs: perhaps you should stick to the facts--you were wrong.

sounds like the guy who finds a typo in the proof to Fermat's theorem

so the difference between $3.7 billion and $15 billion is a typo? and you criticize the people in washington? even you should be able to see the irony of this.

Sure...I never said it was a Scrivener's Error. It included write-downs.

you're making this up. keep going. you doing exactly what you criticize others for. they don't see it and apparently neither do you.

LOL,

Clearly you don't see what judge Rakoff does. No worries.

wow...

this isn't about what went on between ML and BAC

this is about you citing a bonus figure of $15 billion when the real number was under $4 billion.

and your endless political responses.

what does your idol think about facts? unimportant?

50 to 70 off even seems like alot to me, but i do agree that you have to be an idiot to be buying right now. either that or you dont mind wasting money

"If you say DEFINITELY 50-70% more you sound foolish. If you say DEFINITELY CAN'T HAPPEN, you are equally as foolish. No one should be saying anything is definite."

The only way prices will fall "another 50-70%" is if something major happens that makes NYC completely undesireable to live in. Without the said disaster, whehter it's man made or natural, prices will not fall an additional 50-70%.

wow cc Puerile Response. Not sure who my idol is..

and as far as my political responses go. half the repsonses think I'm anti Free Market and half think Anti-Democrat. And 75% of all haven't figured it out at all.

topper, question. i've recently started following studio prices on behalf of a few of our less aspirational buyers. i'm finally seeing significant price movement. now $40-60k off a 2005-06 comp may not seem like great shakes, but when the price goes from $430k to $380k from 2006 to present that's real movement in a market that hasn't had much movement before this quarter.

julia was right. things weren't declining, and now i think they are.

took a while--but as always, time for the personal attack.

bottom line: no difference to you between $3.7 billion and $15 billion. the irony is that even the $3.7 billion is outrageous but it sounds so much better to round up.

cc my idols for the moment , if I could use the term loosely are
Chris Whalen, Paul Volcker & William Black

Perhaps.

But it's easy to see another 20% to 25% decline from current levels.

Prices are just far out of synch with rents.

read and weap.

http://www.calculatedriskblog.com/2009/09/moodys-cre-prices-off-39-percent-from.html

and this, sideline theorists,

http://globaleconomicanalysis.blogspot.com/2009/09/is-pent-up-inflation-from-fed-printing.html
In practice, banks lend money and reserves come later. When defaults pile up, the Fed prints reserves to cover bank losses. Thus, those "excess reserves" aren't going anywhere. They are needed to cover losses. It's best to think of those reserves as a mirage. They don't really exist.

In the meantime, the Fed is pretending banks are solvent and banks are pretending they are well capitalized. Furthermore, in a world of falling asset prices and rampant overcapacity, banks have little reason to lend even if they were solvent.

These are simple concepts, yet few understand them. Australian economist Steve Keen is one of few who do. Some don't want to understand because it shatters their hyperinflation dreams.

well, since everyone is naming their idols, I will name mine:

1. Elizabeth Warren
2. Bernie Sanders

colonel sanders

not bad....

1. Elizabeth Warren
2. Bernie SanderS
not bad....

topper i agree. i was just curious because there is this very ingrained notion that the lower level market is doing well, and i just don't see it.

mr. rodgers. or dr. seuss when i'm feeling a little less local community.

Number 3 on my list is Paul Krugman. I actually like Barney Frank a bit too.

http://media.cnsnews.com/Resources/45623.jpg

Riversider, what's funny is that there has never been a one-year downcycle here in Manhattan. In the current national downcycle, there isn't one example of one either. You are opinion in search of fact. Your chief argument is "there's money on the sidelines". That is the quintessential opinion in search of fact.

Near the peak: rents were rising, prices were rising, people were making a lot of dough, and people could still delude themselves that Manhattan prices never fall much.

Now: none of those things is true. Yet, valuation is the same.

THERE IS NO BULL CASE.

I knew the Barney Frank jokes were coming. There's a good clip from a few years ago where Stephen Colbert pisses of Barney Frank (he got angry after he asked him how is wife is doing). I have to find it.

Rhino, If you haven't figured it out yet, I can't resist playing devil's advocate...

By valuation, I mean any measure of prices vs. rents. Regardless of what Steve says, the 'income' of owning is savings vs. rent.

I knew the Barney Frank jokes were coming
The funny part is that out of no where Barney Frank & Chris Dodd are playing tough guy with the Banks. While I find it insincere, I still welcome it as good for the system long term.

Rhino, you concluded that there is no bull case by comparing the present to the peak. Surely that is not the right comparison. Compare the present to a mid-cycle type of scenario, and then decide whether the bear/bull cases are viable.

Rents- as discussed in an earlier post, as buyers try to sell out and rent, this may create a superficial demand for rental units, but it won't make rents rise in nominal terms. If anything rents will keep going down. But what this will do, is make rents more expensive relative to buying. And eventually an equilibrium point will be reached. I don't think anyone (hardly anyone, anyway), thinks we've reached that point yet.

At some point though, who knows when, unemployment will abate, and the trends will start to reverse. The bull case is simply this -- you can't predict when this point will be, but if you buy now you know you're way down from the peak. I hate to say something so completely idiotic that it will be met with immediate scorn. But I can't help myself. NYC is a very desirable place to live, and will remain so for a long, long time. There have not been many chances in the last 7 years when you could conclusively say you are buying in the downturn, in a buyer's market, when a buyer has room to maneouvre. This is one of those times. Sure, cap rates don't look great. That's one valuable way to look at things, but it's not the only analysis.

point being is that current prices are out of reach for most buyers given todays lending standards. but the real issue is that there are not even as many buyers around period which is then compounded by excessive supply.

ha ha ha anon3 you are a moron!!!!!!!!!!

AVM - sure it looks great compares to the seven years following when Greenspan started to loosen money...creating/contributing to what we now know was the greatest credit bubble in history. Great. There is no valuation measure based on rents that looks good here. And rents are falling. This is buying the Nasdaq at 4000. End of story.

Well, let's examine that. When Nasdaq peaked at 5,000 or whatever, in 1999-2000 or whenever, that meant buying dot.com startup companies that traded at 50x earnings, if they were even viable at all. Many of them had no profits at all. That was the most inane bubble of all time. So if you bought nasdaq at 5,000 you were buying absolutely nothing. If you bought nasdaq at 4,000 you were buying nothing of value either. That was insanity. People were buying things that no one should have ever wanted in the first place.

Compare that to now. Look at all the wonderful apartments that are on the market today. Apartments that lots of sane people would want to live in, for a long time. That is real value. You can argue about whether $1,500/sft is the right number, or $1,200, or $800 or $600. Fair argument. But you cannot argue about whether these properties have value.

So a comparison to Nasdaq 4,000 is a bad comparison.

And if you are have non-dollar denominated assets and looking to buy a NY Apartment prices look even cheaper at the moment.

AVM. zero value until someone buys, no? and depreciating value as it declines? but maybe you're not really looking, at current listings, time on the market, comps, etc. pontification is easy.

a lot of zero value.

You people are SO OUT OF TOUCH...Manhattan is not going down much further.....its these types of posts that created so much fear in my recent backing out of a deal........and how stupid was i......you people could all be unemployed waiters posting here.....

mhillqt, i revise my previous stand. you are either a broker or an idiot.

I'm very much in touch and it is my opinion that prices have futher to go on the downside and potential for a significant move down. Just my opinion based on what i see.

but if Manhattan does go down,the renters can take solaced for being right, even if the decision was really being priced out.

aboutready- i don't quite understand your point.

depreciating value -- yes, market prices are declining. Anyone looking at comps can see that.

Zero value -- well... zero value on their equity for people who bought in 2007 with lots of leverage? Yes. zero value now for a new buyer, who is smart? i don't think so.

avm, i don't think you read my post correctly. but looking at how it appeared (fascinating actually) given the internet interference we had, i'll go there.

Mhillqt. You are like the guy who goes to a whore house and wonders why he got crabs. Why the fuck did you not buy in 2007. Lmao. You wanna pay 2007 prices go right ahead, plenty of people read SE and bougt anyway. There is absolutely no law against paying more than what a seller wants, knock yourself out.

Yeah, prices are going up up up up. Jeez who needs borkers when we got lemming buyers like yourself. Type your personal bank account information and your 'loss'. I'll wire the money into your account tomorrow. Pls don't forget your legal name, social security number and mother's maiden name, your favorite color, first pet name, high school name, grammar school name, favorite teacher name. Am I missing something, guys?

"It's tough to make predictions, especially about the future."

Words of wisdom to live by.