2000-2010 The Lost Decade for NYC Real Estate Valuations

Interesting post patient - I just read the excerpt from Sorkin's book on Credit crisis in Vanity Fair - one of several accounts (New York, New Yorker etc) I have read recently - all of them give me great pause at how bad things were, and I struggle to believe that they're really better in the face of the data we're seeing every month. I hope when we look back from 2012 we're not seeing a great pile of rubble where our lives used to be . . . I think it's far bleaker out there than the current market valuations & the upcoming enormous bonuses the banks are apparently getting ready to pay out again would have us believe, and as goes the market so goes real estate valuations . . . Japan might seem like they got it right compared to the semi-plausible worst care scenario I think we're still facing.

interesting. some very strange things happening with posting tonight. i've had a post show up later, and i responded to this one and nothing showed up.

i'm more negative than you are 09, much more with liquidpaper. read the recent piece by ambrose evans-pritchard or the one one by jubak recently on money supply and you may just feel the chill.

I think you've got the dating wrong.

The lost decade seems more likely to be 2008 to 2018.

Hold you hats!

I wouldn not call this a lat decade considering that we have seen significant price growth in RE from 2000.

finally. some realists. its been a shocking discovery to learn how uninformed and delusional many of the enormously successful people i've admired most of my years actually are. it's so beyond the perceptible bad that it's hard to have normal conversations at this point. three-named authors with gloomy economic forecasts or not , the fact is, we're upon the 80th anni of the big crash. the universe is full of hard and fast rules. progress or not, this october is certain to repeat itself. it can't be prevented. and re: the lost decade, topper. ur understanding is flawed. a lost decade is one where the progress from before literally vanishes. the progress already happened clown. there will be none in 08-18.

to The _President: let me just ask one - honest & good spirited - question. With a 5 year timeline, would you rather be a buyer or a seller of a reasonably priced (not a fire sale & not a seller being stupid) given NYC apartment? How about on a 10 year timeline? honestly curious to know your response. Thanks

So where does that leave people that reallly want to buy real estate in nyc...is everyone waiting on the sidelines waiting for inevitable further drops in price?

so your asking whether I would buy with a 5 or 10 year time timeline? With a 10 year timeline, absolutely. I highly doubt pricess will be lower in 10 years than they are now.

The point isnt where they'll be in ten years...its whether there will be a meaningfully better entry point in the next two or three. Its also very easy to imagine flat prices in 10 years, by way of a much lower point in the middle. Think 1989.

Think stock market from 2000 to present.

You cant start from an unreasonable valuation and expect reasonable returns.

Think Internet stocks from 2000 to present.

Can argue this was a little more real... Its really that chart that LICC insists I dreamt up in my mind. After securitization took off, cap rates went much much lower than they had even been seen...ever. Cap rates and only a bit more than 1/2 what mortgage rates are. Maybe I am crazy...maybe there are more people in NYC with cash, poor math skills, and that don't already own than I can possibly imagine.

......is everyone waiting on the sidelines waiting for inevitable further drops in price?

Yes. As a buyer and perhaps a cash buyer, it is too early in the cycle for me. First, there is cap rates-- I too am perplexed how people do the math on some of these apts, Rhino. But there are also other things to consider if you are thinking of buying in the next 1-2 years. First, you can count on NY real estate taxes going up as commercial buildings falter. Plus there are so many policy changes being bantered about that you must build a cushion for --eg. who in their right mind would even utter the possibility of taking away the mortgage deduction. But there it is on the table. Everyone says it will never happen... which is a tell in itself.

So, when you value the hard asset of the apt. and consider resale-- You have to allow for the 6% agents fee, the transaction costs of buying/selling,moving etc --let's say a conservative 3%. Many apts I have been interested in have a 3% flip tax. And since no one hits the bottom of a market exactly you have to allow for at least 5% downward move --and then pray it's not 20%. So the apt would have to go up 17% from where you bought it to just break even on the asset cost. Let's not include the fact that you probably won't fully recover any improvements made to apt. How many years will it take to get back to even -- in a market that every pundit in the world says will be flat for more than a decade.

When the stock market or any market goes down, investors look at valuations. When the stock market goes up everyone becomes a momentum player. With all due respect, the cap rate argument is over-played(just another tool that provides insight into intrinsic value). At the end of the day, investors have two emotions,fear & greed.

Riversider, I agree. A disciplined, prudent person cn look at cap rates, rent-to-buy ratios, etc. and find their own price point they're insisting on, but that's not how the market works. I've said many times, in the '90s bust coops in Queens sold for less in carrying costs than their fair market rents. At the peak of the boom, the premium, if any, paid to buy, over cost to rent a comp, varied area to area.

Thanks for your insight apt23 that makes sense but then wouldnt it be better to buy in areas that are not prime yet up and coming(that term is overused but oh well) if prices stay flat over the next few years but these areas develop further it might be a better deal for the buyer...

When prices resume upward movement. It will not be fringe areas that lead the way up. Buyers prefer prime location. That said, if a location was speculative it could go down more than its peers.

As regards the market...

"In the short run it's a voting machine, but in the long run it's a weighing machine."

Warren Buffet

Ignore long term fundamentals at your peril.

The last time nyc real estate crossed fair value was in 1998. It's reasonable to think that it'll go back there, inflation adjusted, and then undershoot a bit. Think $250k alcove studio coops, $415k large 1BR.

I guess speculative would be lic fidi?

So what have we learned. Momentum is down and valuations are high. Love the trite greed and fear comment.

but then wouldnt it be better to buy in areas that are not prime yet up and coming

I have made some serious money in up and coming real estate --- Soho in the 80's ( I swear I was too young to buy but did!) Chelsea in the 90's. But my serious money is chump change compared to what really happens in the market. Up and coming areas only rise in momentum markets. And the real money, the Very Serious money, is made in prime when momentum is on fire. I bought in up and coming mkts cause I was young so that is where I wanted to live and that was frankly all I had the money for. Wait for the up and coming markets to really sink -- and they will- before buying and only to live, not as an investment.

At the end of the day, investors have two emotions,fear & greed

I have made money when there is fear and have made some big money when there is greed. When both are inexorably mixed in a co-dependent relationship as they are now -- as no other time in my lifetime, I pass. So there is another emotion. What do you call it when a predator is on the sidelines ready to pounce but doesn't dare move because they have no idea if they will kill or be killed. Inertia?

ap23, My personal feeling is that "up and coming" tends to rise last in an upward market. The main attraction of such areas is there relative affordability. When the Prime areas drop in price the rationale for investing there loses some merit.

P.S. I like the inertia comment. Maybe its more like a deer staring at the head lights.

more lies.

My personal feeling is that "up and coming" tends to rise last in an upward market

I agree. Perhaps I didn't express it well for nina. In a momentum market, prime goes way up and marginal markets go up in a sort of "rising tide raises all boats" market event. In my purchases in Soho and Chelsea, I rode on some very impressive market coattails. For every dollar I made, perhaps a thousand was made in uptown markets. Conversely, marginal markets go down first. So, therefore my advice to wait until up and coming markets go down -- way down-- before buying and only to live, never to invest.

True..

how would you know true from a hole in the ground?

hooray for the drama queens. othello can't touch the hem of the streeteasy garment.

What the fuck are you talking about?

love the cc and riversider contretemps. very dramatic.

lol, in retrospect seems very Tom & Jerry.

nope.

you are a scummy liar. neither tom nor jerry.

just a lying pig.

Looking forward to hearing about the flat screen tv

The one thing that seems to play a major role in real estate is the monthly carrying cost - common charges, taxes, assessments. Some 650 sq ft one bedrooms I have been looking at in the UWS are breaking the $1500/mos range = $18,000 / year. Never mind the mortgage and lost income from your down payment. These costs will not go down and most certainly will go up. I think you really need to love the place you are purchasing, have thoroughly researched the comps, and hope that you don't lose your job.

I currently rent uws and want to buy but prices really have not gone down that much on decent 1 bedrooms i was considering lic or even the new condos on roosevlt island all ablot $600 psf does that still seem a bit high for new condos in thoes areas any thoughts....thanx for all the insight

true sjtmd, i'm amazed at the same thing. some carrying costs are so high i wonder whether the owners feel like owners or like pseudo renters (to the building = huge maintenance costs, to the goverment = property taxes that will one go higher). ok, "they are tax deductible" they might be thinking.

"My personal feeling is that "up and coming" tends to rise last in an upward market

I agree. Perhaps I didn't express it well for nina. In a momentum market, prime goes way up and marginal markets go up in a sort of "rising tide raises all boats" market event. In my purchases in Soho and Chelsea, I rode on some very impressive market coattails. For every dollar I made, perhaps a thousand was made in uptown markets. Conversely, marginal markets go down first. So, therefore my advice to wait until up and coming markets go down -- way down-- before buying and only to live, never to invest."

I disagree with what I think you are saying: the "blue chip" markets tend to have an overall increase of LESS in the "from bust to boom" peaks, and also less downside on the "boom to bust" downturns.

30 yrs: generally I read your posts as gospel but this one confounds me.

Are you saying that prices increased more in LIC or East Village than they did in say Time Warner building or Dakota or 15 CPW or Tribecca from 2004 - 2007? Also, what about the fact that luxury 4 bedrooms have dropped 49% in the bust? Isn't it safe to say that those 4 bedrooms are on Park Avenue and not Avenue A?::

Studio apartment prices fell 6 percent from a year earlier to a median of $399,000, Miller Samuel said. One-bedrooms dropped 11 percent to $645,000; two-bedrooms fell 23 percent to $1.18 million and three-bedrooms dropped 41 percent to $2.25 million.

Four bedroom apartments plunged 49 percent to a median of $5.18 million, reflecting, in part, a decline in luxury sales, Miller said. Those sales declined 16 percent. The luxury segment is defined as the top ten percent of co-op and condo sales.

Prices definitely increased more in Chelsea and up and coming parts of Brooklyn from trough to peak. Leave luxury out of the equation.

fringe areas are more volatile, hence % wise they rise and fall more than prime (that's more stable). timing is different as fringe rises with the priced out people from prime areas (so it should lag in the upside, it anticipates the downside). this cycle is different though in terms of crappy credit that fuel more at the low end (availability versus cost).

the taxi driver that took me from the airport to columbia (phd htere) back in 2003 told me he was a RE investor. he (along with other taxi drivers) was buying multi family and renting them to doormen, nannies and the like. he was doing this in queens (close to fjk) without needing money down... wonder how the prices of those really fringe areas changed during the bubble.

I also think that prices stay within a fairly predictable path until they suddenly jump(i.e prices up and down) are not a coin toss. Trying to market time, is close to impossible. Benoit Mandelbrot has a good book on the subject which I just ordered.

sure Riversider, the coin toss statement is that financial models are still so bad at explaining market behavior that a coin toss does it better. not that asset prices behave randomly.

apt43: I'm not sure the figures you list address the point 30yrs made. Note he is talking about bust to boom and boom to bust, not 2004-2007, or over the course of the last 2 years -- this bust has yet to completely play out. What 30yrs stated is the perceived wisdom. I don't know if it will prove correct this time around and I don't know the figures, but instinctively, I would say that the average prices in Williamsburg or LES moved up significantly more from 1993 to 2007 than did those on the UES. I recall an article a few years back about somebody who sold a rowhouse in Jersey City for some respectable amount after buying it for 28k in the late 70s. Hard to beat those kind of multiples in stable neighborhoods.

"so your asking whether I would buy with a 5 or 10 year time timeline? With a 10 year timeline, absolutely. I highly doubt pricess will be lower in 10 years than they are now. "

Alpo doesn't know where the market is now, so how valuable is his prediction going to be?

He's the one that didn't think we were down 20%....

Does he just mean he's going to raise his moronic assessment of the market 2% each year, and then claim to be right?

Which reminds me . . . that actually isn't what I was asking . . . the question I did want to know the answer to was essentially does the_President think a given property will be more or less expensive than it is now in 5 years, and also in 10 years. He answered the 10 year question, but not the 5 - and if the answer to the value 5 years is the same, or less, then it seems to me that's another way of saying that the time with a 10 year time frame to buy isn't now . . . Mister President, are you around?

Why are you asking a shifty fool for a straight answer? He is basically saying he's less sure about the next five than he is about the next ten. This is a common misconception. You can't wait out a shit entry. Ask NASDAQ investors of the 1990s not present day idiots like Alpo.

So there you have it. Trees grow to the sky but they arent magic beanstalks. Residential Manhattan RE as an investment vehicle will not be a winner anytime soon. Primary residents is not really an investment, more a liability. I think the key is the entry point. When will I get the biggest bang for my buck. It's the main reason I toil endlessly on this chat site. All the folks that over think it are right here. To divine out the collective conscience and assemble enough RE triva to create the illusion of an informed decision. Had I not trolled the site I would have pulled the trigger too soon. I'd guess RE could remain flat but, what if we experience resonably intence inflation? Over time, would that not drive the dollar cost of housing up? If your dollar is worth less prehaps you will have to gather more of them to trade for RE. All things are relative but, I'd rather borrow $$$ at these interest rates and pricing than under the conditions of high interest rates and significant inflation. For me it's heavy duty reconnaissance in preperation for attack. Consider price structure in the presence of another equities sell off. It's all psychological but, what isn't?

It's a prepaid expense but at a high enough discount rate it's an investment.

falco, inflation is the enemy, but in some cases it is YOUR friend. and there are different types of inflation, you're thinking wage/price and that's not in the cards.

and the other inflation, it won't be hitting anytime soon. no matter how much they ease.

pour a glass of wine, pop a brewskie, whatever floats your boat and practice your meditation techniques. this is a long haul, no need to rush.

apt23; you have to talk apples to apples: the subject is neighborhoods, not size or luxury level. You can't compare what Coop studios in the East Village did vs Ultra Luxury 4br Condos on CPW. The gains/losses on the neighborhood in those cases is overshadowed by other factors. You have to compare like properties to like properties, or at least properties at a given price level to properties in the other neighborhood at the same price level (since that's sort of what the trade-off is for a given buyer).

But even if you don't, I'm still not sure you are 100% correct: look at Coop Village: 2br 2004 prices in the $300k's, at the peak in the $700k's. Even at 15 CPW (which is cherry picking to the n=th degree), did prices increase substantially more than that in the time frame you're talking about (except, perhaps, for ultra unique units)?

so 30 yrs are you saying prices increased more in fring areas pver prime

who knows what rent-to-byratio formula is?

who knows what rent-to-buy ratio formula is?

EB124, you posted twice. columbiacounty is now doubly angry at you.

nina15: yes: but mostly because at the various "bottoms" they can be gotten for numbers approaching zero, so high percentage gains are a given. In the early to mid 90's I sold literally 100's of studio apartments that were Bank Owned (REO), mostly in somewhat troubled projects/areas/whatever for $1 (that's NOT a typo) to $25,000. Is it too shocking that on any of those that the percentage gain is grossly higher than anything else anywhere else? How do you beat a 2000% gain no matter how great an area or project you bought into? But the reason for the PERCENTAGE gain being so great is largely because the *absolute* starting numbers were so small.

And that's the same way that it works with fringe neighborhoods: at the bottom, things are SOOOOO cheap, that high percentage gains become much easier.

Example, we bought a 2br at 345 Montgomery for $2.50 (and that's because when my partner turned to the guy next to him and asked for a dime, all he had was a quarter; otherwise we would have bought it for $1).

30yrs - we looked at 345 Montgomery last year, a few different units. Actually liked the building, but was iffy on neighborhood and thought pricing was too high. Curious, what did you sell that unit for later (assuming you did...)?

$32,000

profit = +/-$0

Renovations? Can I ask if you sold recently?

I sold a 2br for $32,000 and you have to ask if it was recent? Really?

I figured you did *not* sell recently, but also know, you just never know....

what is it rent-to-buy ratio? any multiples?

Thanks 30 yrs,, I agree with your first point. As to your example -- maybe peter cooper could get 700,000 for 2 br pre lehman but not now since the entire project is in financial distress. So what could they get now? 500,000? Less? And let's look at the recent sale at 15 CPW. Apt was sold for 20 million at opening and though large was not an uber apt because it didn't have terrace overlooking park. They put it back on the market at 80 million. Could they have gotten that pre lehman? doubt it. But even if they got 60 that is quite the increase. And the real price is 37 million cause that is what it sold for recently. So if you took the peter cooper 500,000 number, CPW would edge out a percentage win in today's money. However, apples to apples in cash, I would much rather have the 17 million dollar profit over the 200,000 dollar profit.

your montgomery place example though, kicks ass. thanks

apt23; I think you should re-look at my first example: it wasn't a hypothetical about "what if Peter Cooper" went Coop/Condo.

"the taxi driver that took me from the airport to columbia (phd htere) back in 2003 told me he was a RE investor. he (along with other taxi drivers) was buying multi family and renting them to doormen, nannies and the like. he was doing this in queens (close to fjk) without needing money down... wonder how the prices of those really fringe areas changed during the bubble."

no more wondering now, the place is heading towards looking like detroit.

http://www.pbs.org/newshour/bb/business/july-dec09/foreclosures_10-15.html

When did the dow first cross 10,000?

Party like it's 1999

prince had the start of the party right, but his timing sucked as to the end.

Financial Services Modernization Act will turn ten next month. Signed into law by Democratic President Bill Clinton on November 12, 1999

you idiot..it's obama's fault, not clinton's

or have you had an epiphany...liar

pedal to the metal in my red corvette

aint too fast

ALYSSA KATZ: In the 1990s, Fannie Mae and Freddie Mac played really central roles in changing how mortgages were underwritten, figuring out, well, how can we get people who wouldn't have qualified for mortgages before into homeownership? And, you know, this will be good for our market growth and in -- in the promotion of homeownership.

PAUL SOLMAN: But that's the problem, isn't it?

ALYSSA KATZ: Well, it is, except that those mortgages generally performed very, very well, and even through the most recent crisis, have continued to perform much, much better than other mortgages.

Home Price Appreciation the elixer for poor underwriting of mortgages.

"taxi driver"

Ha, had a taxi driver crying to me about an investment property he had in Queens.
Reminded me of the Bernard Baruch and shoe shine boy story.

Maybe b's and p's get lost in translation....Cab rate / Cap rate.

well, you know, they put so little down that they must have been the types to HELOC themselves to death, so you'd really expect significant losses here as well.

First saw Prince at the Allentown fair grounds. He was new, his music was already playing on the radio and there we were a mixed crowd waiting for a singer we all liked but, had never seen. Out flies this tiny guy in a red speed-o leaping around the stage. It was a great show, great music but, it was easy to see that the brothers were having a little trouble with the visuals.

Needles to say, Talent ruled the day!
From the poster formally know as falcogold

known

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

During the mid-1990s, and for most of the period between 2003 and 2006, it appeared that the U.S. achieved a "Goldilocks Economy" where markets were neither "too hot" nor "too cold." As the 2005 book notes, these markets were first demonstrated as a possibility in 1776, when Adam Smith published his treatise on The Wealth of Nations. For economists that understood the process, the U.S. appeared to finally resolve the last unsolved problem of econometrics, balancing financial markets to avoid periods of crisis and euphoria.

In the case of each Virtuous Economy, however, the achievement of this long-sought market equilibrium soon shattered. Why? In each of the crises on the attached chart, the daily availability of data regarding corporate spreads allowed all market participants roughly equal access to spread information. That access did not exist until 1987, so we can understand why such periods did not exist earlier. But what happened to make investors flee the creation of riskless arbitrages just as their potential profitability was growing (at the start of each crisis)?

Because instant data assures that market participants know when the opportunity for arbitrage profit grows, we can, for the first time, look back and see the impact of "information access" across markets. What we see is not what one would expect. Despite knowing how to turn rising spreads into profits, and how to reduce transactions when spreads signal euphoria, we still see great instability. Each of the observed Virtuous Economies became a "bubble" that soon generated another crisis. Observations surrounding each of the six crisis periods on these charts point, in my view, to one overriding factor, defective market policy, as the cause of each "crisis" and "bubble" shown on the chart. Moreover, reform that measurably improves market policy appears to be the source of each recovery toward stability (most notably the "Rule 3a-7" reforms of 1992).

We have only recently begun to emerge from the latest (and most severe) of these "modern market" crises. By analyzing past crises, perhaps policymakers will gain insights that may help achieve an even better resolution for this latest episode.

****************
In the case of the U.S., that meant the logical consequence of our response to preferences exercised by our trading partners was a huge imbalance, where a housing and commercial investment "bubble" was funded by policies that forced dollar reserves to be invested rather than converted to purchases of goods. As a result of five prior crises since 1987, by 2007 the following pressures built to the point where something "had" to give:

1. Failure to find means for reducing the monopoly impact of bank conduits.

2. Failure to implement capital rules that fairly, equally and evenly treated all regulated institutions both responsibly and competitively.

3. Failure to extend receivership and insolvency rules equally to all systemically important entities.

4. Failure to implement responsible and fair-handed rules of accounting for the ownership and transfer of financial assets.

5. Failure to impose even rudimentary regulation on derivatives markets that came to dominate the financial sector.

6. Failure of international trading partners to open markets in a manner that allowed funds to flow freely and level out international imbalances.

took the bait.

too long, didn't read.

"well, you know, they put so little down that they must have been the types to HELOC themselves to death, so you'd really expect significant losses here as well."

In 2004 - 06, Countrywide flooded poor NYC neighborhoods with promises of home ownership and no cost loans. My cleaning lady bit. After the s##t hit the fan, she and her daughter came to me to help. Countrywide completely shilled them. She knew she could pay the monthly costs (she is very, very honest) so she found a house. Countrywide told her she didn't need a lawyer -- she could use countrywides lawyer at no cost. At the closing they told her she didn't qualify for the loan but no problem they would generously supply her with a second loan --at 18% I spent 2 hours on the phone with Countrywide and to tell you the outrageous things they said and did would take pages but it really made me sick. This was 2008 and the rep was still trying to sell me a no doc loan for her. But the best tid bit is when I asked for a breakdown for the outrageously high fees -- one of the charges was $300 for bloodtests. BLOODTESTS for a loan application!! Of course she never had one, they just charged her for one. It was frightening.

I set up this wonderful lady with a govt official to help modify her loan -- and they have done nothing. I got to Charles Schumer who was responsive and great but she still does not have any kind of modification. And, her loan and all the other loans in her neighborhood come due in 2010. So expect a whole hell of a lot more of this particular sh*tstorm. Countrywide raped the whole community. They targeted poor and minority neighborhoods and they were selling these loans well into 2008.

and yet His Orangeness still roams free.

Is prince gay? Not that it matters, but but??????

Apt2345, yep one of the reasons I have decided to hold off on buying even if it hits $500 psf, which it wi is that I personally know at least 20 units/ people who are holding on to their units by the skin of their foreskin and there isn't that much more elasticity left in that piece of shriveled skin.

There is a tremendous overhang of unintented flipppers out there. Just look all around you. Look into your neighbors eyes, you can tell they are looking back questioning if you are gonna list first. The old who gonna list first stare down.

""taxi driver"

Ha, had a taxi driver crying to me about an investment property he had in Queens. "

was he a young african immigrant? what was he planning to do about it? did he say anything about current prices? all i hear is about the foreclosure pipeline being bloated (and victims, tons of victims). how much does a taxi driver need in negative equity to walk away (or drive away)?

imho $50k could be enough to tempt him to give up and go back to africa with his family/friends.

apt 23 i had a countrywide mortgae. When I paid it off they hounded virtually every day with emails, phone calls and letters with the intent of getting me into a HELOC . They kept saying how they were going to save me money to which I replied, "How is getting back into debt saving me money?"

apt, is this in queens or bronx? i got a ton of puts on this SOBs (CFC) at the time for what they were doing in bubble states, didn't see much crappy lending here in nyc going on (as % of their total crappiness). the inland empire, west of LA... was totally bombarded by this weapons of mass destruction.

the guy to fry about this is chris dod, not only he regulated like hell (allowing CFC, that actually was not so bad compared to others) but he also got a gift from CFC (was it a 0% rate mtg?) to make sure he wouldn't actually... regulate.

admin, mortgage broker standards are set by the state. i think NY is, in the relative scheme of things, one of the better states for consumer protection type regulations. i think toward the end WaMu did write a lot of pay-option-arms in the area, but i don't know if they did in new york. they did in NJ. those will not have shown up in the world of distress yet. any of our ACRIS stars see WaMu loans out there?

the hubby, for example, tells me that numerous insurance companies are just shutting down shop in NY because the insurance commissioner makes them pay attention to such silly things as loss reserves.

AR: That really, really made me laugh. I choked. I hate him so -- and I never use that word. I'd like to strangle him with the white collar on his oh too debonair striped shirt until he became His Redness.

W67 I know that stare!! but too often I see the cold sweat of the "I can still get my price" hubris. I think it is going to be very very difficult in NYC. I wish I could give all potential buyers a bus tour of Miami. It is really third world here in Miami -- and by that I mean they are very, very close to handing out green cards at open houses. It is crazy to think NY can't get a sniffle from overbuilding when Miami has the equivalent of the swine flu. It is all a matter of time, my swine.

i stole the reference from Bess Levin at DealBreaker. i thought the term had spread widely.

admin

"taxi driver"

No, this guys was Indian, paid like 120K for something and was seriously underwater.
I think costing him 2K a month.
Offers on the table would have him stand to lose like 30k.
I told him "do you think things will be better/the same/ or worse in the next 2 years?"
He said "worse."
I then said " How much is 2k times 24(2 years)?"

He then said, "I'm going to call the broker right away."

admin: queens. I know they hit brooklyn too but don't know about the bronx.

AR: the Gods obviously protected me from the ref until I could handle it sans homicidal rage.

AR, you clearly missed shelby on mtg regulation back when it mattered (2005 and before).

truth, that's so funny in a way (to have this taxi/RE investor experience). paying $120k is a lot of skin for a taxi driver, much more it seems than my guy. the loss is what he would be losing by end of 2010... good job truth telling it like it is to this guy!!!

yep apt, i've seen the same thing playing out in fringe areas of brooklyn. somehow, not so much in bronx though.

I was interested to see some human refer to 500psf. To me that seems like an entry point where I would no longer be too worried of massive additonal downside, although there might be some. Yeah...I know...depends on the building, amenities, hood, etc...but I mean decent buidling in decent area but not the best of the best...say a generic condo. Maybe this is nuts, but I think 500psf would be sensible. And I would add, that even 500psf is not some dirt cheap thing because it comes glued to a perpetual liability for monthly fees which are too high in nyc due to high taxes, unions, etc.

i think 500psf is possible. i don't know if it will happen. but if you look at price appreciation, supply/demand, and income levels from 1998 to present, add in a couple of shocks, it wouldn't surprise me.

apt23, countrywide has a lot to repent for, but so does everyone's favorite boy-toy ceo (another rip-off from Levin) Dimon and his co-horts. be sure to pull up the actual ads.

http://executivesuite.blogs.nytimes.com/2009/10/14/subprime-and-the-banks-guilty-as-charged/?hp

i put this ad up awhile ago. but it's really awesome in a terrifying sort of way. i see that business insider has reposted it, so so shall I.

http://www.businessinsider.com/jp-morgan-chase-ad-from-2005