UD Quotes NY Times - Manhattan 3Q Prices Down

and you actually read the entire article, right?

I read the entire UD piece, yes.... why?

btw, here is the times data...

"However, a review of property records shows average co-op and condo prices falling to about $1.25 million in the third quarter, off 2 percent from the previous one, and 6 percent from the third quarter last year."

and...

"That represents a decline of 25 percent from the peak prices in early 2008. "

The real story is one of adjusting to what the market's really become - increases in volume due to lower pricing that is now seemingly stabilizing:

"Its true that you can't deny the pricing out of fear this market experienced via the improvement in bids for Manhattan property. But to cherry pick price action and ignore the entire correction by looking at the improvement in bids recently is to miss out on the adjustment this market has made. Stabilization is quite different than a new sustainable rise in prices built on improving fundamentals. What we had is a stabilization of prices after an enormous shock that saw bids for Manhattan property adjust to a new, lower level. It took a few bumps to find that new, lower level, but then again that is usually how markets work. This is where we are now and this is where I think we will stay for a while."

Which sounds eerily like what I predicted over a year ago... that the initial decline isn't the worst part, its the years after of going nowhere that hurt most.

Either way, strike 2 for the bulls...

Depends on what's worse for sellers - I'd say the quick initial decline is scarier, especially in a bad jobs market. More people can probably handle a stable pricing situation - there's less pressure to make a move if things turn sour on your job/income front.

Either way, you're still playing this bear vs bull game, I see. Looking forward to the day you want to advance the discussion beyond schoolyard fights.

"Depends on what's worse for sellers - I'd say the quick initial decline is scarier, especially in a bad jobs market. More people can probably handle a stable pricing situation - there's less pressure to make a move if things turn sour on your job/income front."

No doubt a quick decline is "scarier". But the logic is off in terms of financial realities. A longer period of being underwater is far worse from a household economics standpoint. Foreclosure if you're 20% underwater vs. 5% underwater doesn't help a whole lot. If you can't make the payments, the longer length of problem time is by far a bigger risk.

And it gets even worse for the sellers "waiting it out". Many will delay making a move they need to move for some hope of a giant uptick. That alone can cause very serious additional losses for a homeowner who bit off more than he can chew. Taking a loss earlier and moving to a cheaper place earlier would be a far better approach than waiting for a jump that doesn't come, and paying dearly in the meantime.

"Looking forward to the day you want to advance the discussion beyond schoolyard fights."
Try it yourself sometime...

"No doubt a quick decline is "scarier". But the logic is off in terms of financial realities. A longer period of being underwater is far worse from a household economics standpoint. Foreclosure if you're 20% underwater vs. 5% underwater doesn't help a whole lot. If you can't make the payments, the longer length of problem time is by far a bigger risk."

The key phrase there is "if you can't make the payments," but you're in trouble if you can't make the payments in any market. The point is, if you have a somewhat clearer understanding of where price levels will be in the next few years, it makes the decision-making process that much easier. Stability from here on out, regardless of where levels are relative to 2 years ago, will breed confidence. I don't know anyone who expects a "giant uptick," but people who have considered selling in the past year in anticipation of further drops, financial troubles, and instability, will be able to more calmly reassess. I think that partially explains all the pulled listings of late, and it's also why I'd be surprised to see all of them come back on.

"Try it yourself sometime..."
Your MO here is to "keep score" which may be useful for massaging your ego, but that's pretty much where the value ends.

BJW - That was how I read that as well. It appears that things may muddle-along for a bit at this level. Not going down anymore is certainly better than continuing to drop.

It is also easier to imagine a slight uptick at some point down the road if things remain stable than if they are continuing to drop.

shadow inventory is still percolating--when it erupts, the muddle aint

That is a good point and will be interesting to see how it affects things.

But Ubottom, where's the evidence that it will "erupt"? I completely recognize the importance of shadow inventory, but I don't see developers and sales teams having to dump all the inventory out there at once, especially if they haven't done so as of yet. For the most part, they'll continue "percolating" as you said.

I have been noticing the number of (I don't have the exact figure) of public auctions in nyc (and not just harlem or brooklyn) have been rising. And also noticable more foreclosures and shortsell listings compared to earlier this year. I have definitely noticed quite a few of them coming into the market as I couldn't find that many just a few month ago. I think banks will slowly release more of these listings and it will put more of a downward pressure on the prices. And what will happen to all the failed developments?

> The key phrase there is "if you can't make the payments," but you're in trouble if you can't make
> the payments in any market.

Incorrect. That wasn't the case for a number of years up until the crash.
Thats the point.

> The point is, if you have a somewhat clearer understanding of where price levels will be in the next
> few years, it makes the decision-making process that much easier.

You're stating the obvious and missing the point again.

A view into the future is great. But a short-term stabilization doesn't tell you about the long term, it could just be a pause before more pauses, or big upticks, or big downticks.

Pretending that we're on an more sure footing isn't very logical, and making decisions off a false piece of information might make one's decision "easier" for a minute, until the prediction turns out wrong.

> Stability from here on out, regardless of where levels are relative to 2 years ago, will breed
> confidence.

True.

But meaningless if the Q3 numbers match up to the UD/Times... which is further decrease.

Yes, upticks and staying flat are in of themselves long term helpers for bulls.

Problem is we have neither.

> Your MO here is to "keep score" which may be useful for massaging your ego, but that's pretty much
> where the value ends.

Ironic, coming from the guy who jumped up and down and screamed trying to tell me my score 2 weeks ago....

Always good for a laught.

"I completely recognize the importance of shadow inventory, but I don't see developers and sales teams having to dump all the inventory out there at once, especially if they haven't done so as of yet. For the most part, they'll continue "percolating" as you said."

The mistake here is assuming that because its not officially on the market, it doesn't affect market dynamic.

If the guy has 100 to sell, whether or not he puts 1 or 100 in the listings, he is still motivated by having 100 to sell, and the lending implications that come with that. He might be able to trick a buyer or two saying "its the last one", but pretending the inventory has no impact is just not logical.

and many of these properties will have to be worked out, where the original developer will ultimately be out of the picture, and entire projects will get reval'ed at realistic prices, prices where these properties will sell out in reasonable time..time is the enemy of these developers who are clinging to their properties in the hope that buyers will reemerge...they likely have little faith that will happen, but try to preserve option value in case the highly unlikely happens..muddle ultimately blows these guys up..the only thing that will save them, and save these properties from repricing to clearance levels, will be a soon sudden buyers frenzy with attendant price increases..dream on

a variety of factors were in play over the last several years in which an insane number of new res units were built---pukeroo!!

> Not going down anymore is certainly better than continuing to drop.

In a given period, sure...

But the choice between 20% over 6 months and 20% over 6 years... the latter can in many ways be more damaging (including in real $$$).

"Incorrect. That wasn't the case for a number of years up until the crash.
Thats the point."

Really, it meant nothing to fall behind on payments and default on your loan? Wait, are you talking about the Sims?

"You're stating the obvious and missing the point again."

Frankly, it's not that obvious to some people. The point, again, is the decreased likelihood of big upticks or downticks. You've said yourself that you see several years of flatness. This is a longer-term view, and while it might turn out to be wrong, the impact of that kind of perception is what we're discussing here.

"But meaningless if the Q3 numbers match up to the UD/Times... which is further decrease."

One, you've completely dismissed any piece the NYT has on the real estate market - why change now? (don't answer that, I know exactly why, unfortunately) Two, Noah's the one who used the word "stabilization." You're adamant about painting a different picture than the one he describes.

"Ironic, coming from the guy who jumped up and down and screamed trying to tell me my score 2 weeks ago....
Always good for a laught."

Yeah, no idea what you're referring to - perhaps it happened in the Sims as well? And what's a laught? A low-calorie beer on tap?

"If the guy has 100 to sell, whether or not he puts 1 or 100 in the listings, he is still motivated by having 100 to sell, and the lending implications that come with that. He might be able to trick a buyer or two saying "its the last one", but pretending the inventory has no impact is just not logical."

So it's already priced in to the market then? So why the big fuss about shadow inventory?

bj---when prices were rising 20% a year and credit was available to anyone in the form of refi heloc etc falling behind on payments was not a problem---get it---now the fallen behind are well underwater and cant do shit but wait to be foreclosed--get it?

it's differnt now than it was 2 years ago

"bj---when prices were rising 20% a year and credit was available to anyone in the form of refi heloc etc falling behind on payments was not a problem---get it---now the fallen behind are well underwater and cant do shit but wait to be foreclosed--get it?"

Ubottom, I fail to see how that wasn't a problem. I'd even say getting HELOC to cover your payments (which by the way, means you'd be covering your payments, and not defaulting) makes the problem even worse long-term. Yes, it's a different environment now, but a leaky engine is a leaky engine.

> "Incorrect. That wasn't the case for a number of years up until the crash.
Thats the point."

> Really, it meant nothing to fall behind on payments and default
> on your loan? Wait, are you talking about the Sims?

Is that where you practice changing your story when you start losing the argument?
I wouldn't be surprised.

You're now talking about folks who already defaulted. I'm not sure how you are missing that millions of people avoided this fate by refinancing in the wacky market. Not saying it was smart...

but how did you miss this all those years. Were you sleeping?

"You're stating the obvious and missing the point again."

Frankly, it's not that obvious to some people. The point, again, is the decreased likelihood of big upticks or downticks. You've said yourself that you see several years of flatness.

> This is a longer-term view, and while it might turn out to be wrong,
> the impact of that kind of perception is what we're discussing here.

Sure... but you're starting with a falty premise again. Agreed, flat or slight upticks could breed some confidence, and help long term. I've said that already just today.

The mistake here is that none exists... the numbers are down again.

"But meaningless if the Q3 numbers match up to the UD/Times... which is further decrease."

> One, you've completely dismissed any piece the NYT has on the real estate market - why change now?

Besides that being a lie (not surprised again), you're missing the point... UD specifically mentions it, and its a STAT not a qualitative piece, and, its from a different source.

But, I know you don't like data...

Of course, I understand why you think someone might do what you're accusing me of it... because its what you know and do yourself.

> Two, Noah's the one who used the word "stabilization." You're adamant about
> painting a different picture than the one he describes.

Yes, I know you don't like data, but this is just silly now. I'm not painting a picture, I'm talking about the ACTUAL stat coming out. There are few things more slanted than trying to call things that aren't slanted slanted.

We're talking about a data point, and one that is generally accepted. Say "paint" all you want, but its a stat.

Furthermore, Noah and I actually disagreed on this stat. He said a few weeks back that the price number would be UP, and I said it would not (partially off the contract data). We disagreed on that.

If the Times stat holds, I'll have been on the right side of that divergence.

So, paint all you want, but don't cast your mistakes onto others.

Its a specific stat we're talking about here.

> Yeah, no idea what you're referring to - perhaps it happened in the Sims as well?

I guess now we know why your RE acumen is so off... its not based in reality.

"bj---when prices were rising 20% a year and credit was available to anyone in the form of refi heloc etc falling behind on payments was not a problem---get it---now the fallen behind are well underwater and cant do shit but wait to be foreclosed--get it?

it's differnt now than it was 2 years ago"

Exactly. He simply missed that part...

perhaps if he had been looking at reality, and not the Sims, he would have noticed...

those properties will be sold at clearance prices...they will not be refied cash out bailed out by continual upticks and easy stupid credit

helloooooooooooooooooooooooo

nyc10022,

Who?

"perhaps if he had been looking at reality, and not the Sims, he would have noticed..."

"I'm not sure how you are missing that millions of people avoided this fate by refinancing in the wacky market. Not saying it was smart...
but how did you miss this all those years. Were you sleeping?"

You're missing the point again - people who refinanced or got a HELOC to help cover their payments were presumably able to then, ahem, cover their payments. As you said, generally not a great idea, but doesn't do anything to dismiss the notion that falling behind on payments or defaulting was ever anything but trouble.

"The mistake here is that none exists... the numbers are down again."
"Yes, I know you don't like data, but this is just silly now. I'm not painting a picture, I'm talking about the ACTUAL stat coming out."

I enjoy that you're affirming stats that haven't even been released yet. I get your shtick - pound your fist ad nauseum until people get tired of responding to you - but I'm not buying it.

Oh it figures.

You're missing the point again - people who refinanced or got a HELOC to help cover their payments were presumably able to then, ahem, cover their payments. As you said, generally not a great idea, but doesn't do anything to dismiss the notion that falling behind on payments or defaulting was ever anything but trouble.

you make the point yourself (unwittingly): where those apts didn't come on the market 2 years ago, they will now at whatever prices required to clear them=more supply cheaper prices

Ubottom, I think we've got our timelines mixed a bit. You're describing what's already happened to a large degree. People have been forced to put their properties on the market because now (to continue my previous metaphor), their engines have blown out. It was always a problem - they were just able to cover it for a while. And what I've been arguing since the beginning of this thread is that now that things appear to be stabilizing compared to what was happening in the past 12-15 months, which, like it or not, is instilling more confidence in some homeowners who feared having to unload their properties. I think that's directly contributed to the pulling of a lot of listings. Things might change, sure, but for the time being, I see flatness ahead.

bjw, i'm afraid that will be derailed by the enormous issue of new development shortly. fwiw, i'm still seeing declines, particularly in the smaller market, and in some areas that were resistant to decline, such as downtown and inexplicably harlem.

a couple of months ago things seemed to be showing up in recorded sales at 2005-06 pricing. now we're seeing a lot more in the 2004ish range, and increasingly some outliers at earlier pricing levels. who knows what we'll see in a month, but many of these closings are for properties that traded during the "hot" summer months. so while i only know what i hear antecdotally regarding late summer sales, so far there is no proof of a bottoming out.

my point: flatness is unlikely to hold--more puking unless an good uptick comes soon--new deve'pmts will puke to speedy clearance prices, and owners who were for years bailed out by easy credit and continual price increases will be foreclosed and banks will clear those properties

good quick uptick unlikely in here what with employment and the numerous other issues ny is beset with

aboutready, I wrote "things might change" specifically with new development in mind. I honestly have no idea what's going to happen there because often new dev can feel like a market of its own and it's tough to gauge how much impact there will be, not to mention exactly what will happen within that market. I think some of it's overblown (am concurrently on Brownstoner amazed that someone is trying to convince that 10,000 units are coming to Williamsburg, sliiiiight exaggeration), and too little is known on the developers' financing terms for me to have any confidence in any kind of "prediction."

In terms of pricing, I've been seeing 2004-05 pricing for a while now. Yes, there are overly optimistic sellers who remain on the market and are still playing catch up, and while I wouldn't say a bottom has been set, I just don't see the volatility/violence in pricing we've had continuing as such.

bjw, really is impossible to predict, who knows what the gov't will try and for how long it will succeed.

i think there may be one more biggish drop, depending on a number of factors, but it could happen now, soon or later. if the powers that be can miraculously avoid self-detonation, we just grind down for a few years. rentals are still very weak, and there is that new development issue.

"But the choice between 20% over 6 months and 20% over 6 years"

No, the article actually suggested that prices would remain flat, not down 20% over the next 6 years. That is a significant difference.

aboutready, can you qualify what you mean by "weak" rentals? In terms of quality?

"No, the article actually suggested that prices would remain flat, not down 20% over the next 6 years. That is a significant difference."

waverly, exactly my point - he's not exactly being genuine about what Noah posted.

no bjw, excess inventory, incentives that are now sometimes running THREE months free, and more inventory that will enter because of the new development issue. the quality is actually improving, although some would obviously prefer not to rent a condo. but for many people there are a lot more options, less expensive and more appealing ones, out there right now.

aboutready, definitely. I was just confused by your categorizing that as "weak" - for renters, this is great.

I think there is a good chance of a "flood" or at least a "stream" of shadow inventory onto the non-shadow market at some point. Once sponsors realize that it will be years before prices get back up close enough to the peak for them to recover their equity, they'll stop contributing money to service the debt and start handing their empty units over to their lenders.

Once lenders start taking possession of properties, they will want to get out fast before other shadow inventory hits the market and pushes prices down even further. Alternatively they will sell the units to rental companies, and increased rent supply will mean lower rents, which will entice more potential buyers to get out of the market.

Anyway, not sure how long that will take, possibly years, and likely with a few up-ticks along the way down. But I still think it's the most likely scenario.

post87, check out the Plaza. very interesting.

"You're missing the point again - people who refinanced or got a HELOC to help cover their payments were presumably able to then, ahem, cover their payments."

Cough all your want, now you're completely nonsensical, if only to try and cover your last mistake.

If you can't make the payment, you refinance and change your payments. You didn't cover the payments you couldn't make, you changed the schedule.

Ahem, try again.

Or don't, actually. Because more than one person here has pointed out your mistake.

> I enjoy that you're affirming stats that haven't even been released yet.

Genius, that data was released. You're the one painting pictures and then complaining about that.
I gave the numbers, thats it.

You've been the one whining since.

> I get your shtick - pound your fist ad nauseum until people get tired
> of responding to you - but I'm not buying it

MY shtick. ROTFL. You're funny.

Dude, you're doing it right now!

Can you go just one thread without jumping up and down and whining?

You told me to put you on ignore... why don't you take your own medicine?

Seriously, stop whining already.

> waverly, exactly my point - he's not exactly being genuine about what Noah posted.

bjw, now you're just lying again.

I noted Noah's reference of the stat. I was 100% genuine on what he posted, because I posted it exactly.
Then I said I disagreed with him on the longer term.

Seriously, dude, stop lying and whining.

It is funny, though... you are the hypocrite who started out saying " Looking forward to the day you want to advance the discussion beyond schoolyard fights."

Seriously, grow up. Try spending less time jumping up and down, whining, and lying about what everyone else is saying, and on maybe growing up a little yourself.

"No, the article actually suggested that prices would remain flat, not down 20% over the next 6 years. That is a significant difference. "

I was giving 20% as an example, not a prediction. Same thing happens with 5% or 3% or whatever. It was specifically a discussion about whether market moves are a bigger deal if short or quick. Thats all. I picked a big round number for comparison.

In terms of the predictions of the article, I don't necessarily agree with them, as I've said. I included them for the actual data that has come in, thats all.

Hell, its the title of the piece.

"bjw, i'm afraid that will be derailed by the enormous issue of new development shortly. fwiw, i'm still seeing declines, particularly in the smaller market, and in some areas that were resistant to decline, such as downtown and inexplicably harlem.

a couple of months ago things seemed to be showing up in recorded sales at 2005-06 pricing. now we're seeing a lot more in the 2004ish range, and increasingly some outliers at earlier pricing levels. who knows what we'll see in a month, but many of these closings are for properties that traded during the "hot" summer months. so while i only know what i hear antecdotally regarding late summer sales, so far there is no proof of a bottoming out."

AR, I'm with you here. So far the only "evidence" to the contrary I've seen have been anecdotes from folks with vested interests in increases.... and the actual data I've seen shows continued declines (like the subject of this thread).

"Cough all your want, now you're completely nonsensical, if only to try and cover your last mistake.
If you can't make the payment, you refinance and change your payments. You didn't cover the payments you couldn't make, you changed the schedule.
Ahem, try again."

Not nonsensical, you're just not understanding either because you don't want to try or I'm not being clear enough. To be needlessly reductive, refi/HELOC = covering payments; not covering payments/defaulting = not covering payments/defaulting. Those are different things. I said the latter is always troublesome, regardless of the market, which you seem to disagree with, mysteriously. As I've said, even the former is troublesome; it'll just manifest itself in the long-term rather than the short.

"Genius, that data was released. You're the one painting pictures and then complaining about that.
I gave the numbers, thats it."

No, it definitely wasn't: http://www.millersamuel.com/

"You told me to put you on ignore... why don't you take your own medicine?
Seriously, stop whining already."

"Whining" = debating with you, apparently. Nice way to deflect any arguments you don't like, isn't it? I have no need to ignore you; I just suggested you do it if you're really that tired of my posts. But you seem to love responding in triplicate every chance you get.

"It is funny, though... you are the hypocrite who started out saying"

What?? I'm not picking a fight with you - I'm debating. You know, trying to have a discussion. On a discussion board. What a concept! Get over it.

LMAO.. you guys are too much... arguing about arguing on the board... too much... can't make this shit up.....

w67th, it's awesome isn't it? I do prefer the unicorn stuff myself though.

Honestly, doesn't every decline pause at intervals? If that was the bottom...great who knows. I have yet to understand why bulls can be convinced a correction can play out in only one year, and why it should stop at historically high valuations.

And why it should stop with so many empty condo units still around.

Arent the bulls already wrong again about the bottom if Q3 is down again and Q2 they kept talking about activity and upticks?

"What?? I'm not picking a fight with you - I'm debating. You know, trying to have a discussion. On a discussion board. What a concept! Get over it."

I love it, bjw a hypocrite as always.

When he doesn't like what anyone else says, he's the hall monitor, saying whats ok and whats not.

When he's a whiny putz with no facts, just whining, he's "debating".

I agree, you REALLY can't make this stuff up.

"Arent the bulls already wrong again about the bottom if Q3 is down again and Q2 they kept talking about activity and upticks?"

Well, thats kind of the big point....

" I have no need to ignore you; I just suggested you do it if you're really that tired of my posts."

Ha, lying again. No dude, you complained about my responses and said I shouldn't respond!

Nice to chance the story now..

but you're just a whiner.

"But you seem to love responding in triplicate every chance you get."

Wow, the things you complain about most are always the things you do.

What an whiner... wow.

""But you seem to love responding in triplicate every chance you get."
Wow, the things you complain about most are always the things you do."

You're like clockwork - hilarious. What a joke.

"Arent the bulls already wrong again about the bottom if Q3 is down again and Q2 they kept talking about activity and upticks?"

I'm not bullish on Manhattan real estate by any means, but how can you call Q3 down again when the median resale figures are slightly up/flat for the quarter? Yes, down YoY, but that's hardly surprising given what we already knew from Q2, no? The point is that things are, for the time being, seemingly stabilizing. Volume is up tremendously (from quite a low, obviously), as has been discussed here before. Don't confuse that with calling a bottom, but don't call it further declines either. Not sure why that's so hard.

> You're like clockwork - hilarious. What a joke.

whine, whine, whine, bjw....