calm before another storm?

Who knows if these pessimists are right, but the point is that people should be careful before being lulled into complacency about the nyc re market by bonus stories (a hell of a lot of bankers I know are still unemployed, so I wonder how many humans are really getting these bonuses), the stock market surge, bidding wars for the few apartments priced sort of sanely, etc.

Real estate purchase risk still seems asymmetrical, with little upside potential, and greater downside. If we start seeing auctions (like that one in Greenpoint) or massive mark downs to clear inventory, or get a building over 50%, maybe a selective deal might be worth risk (precisely because a lower entry price point diminishes the asymmetrical risk).

Oops. Forgot to mention the fundamental SE bear mantra -- rent vs. buy still way out of whack.

Another market plunge seems reasonable to me, too. There might be quite a few pockets of "hidden" crazy-ass leverage that cannot sustain itself, ie Dubai.

With unexpected soveign defaults popping up from time to time, the markets won't like that kind of uncertainty.

As per the NY Post, Manhattan real estate forcast is for a "W"
http://www.nypost.com/p/news/business/manhattan_double_dip_rFLSp7Rcxpd7R0FKHxyVQK

It's kinda funny to talk about a "W" in Manhattan, isn't it?, since that implies some rise off some floor

Could very well be a lopsided "W," with the second "V" dipping lower than the first?

Or a partially inverted "Y" with the right arm bending more towards the back part of the leg by late spring.

Therez a queasiness to the mkt, jimmy......

spinny... I c you are buying into the "WS bonus in 2010" will float all boats mantra.... u c the country who would sell you sand for $2000psf... well I'd keep an eye on that..... you c the bonuses "about" to be paid... let me get you a metaphor a Kanadiane can understand...

It's as if you paid a goalie a bonus for stopping a puck, irregardless of how many you let thru.... c that's the problem with not marking to market the crap they still have on the Balance Sheet....

True story, the Palm Island had to have 100s of $mm put in to allow the natural tidal cycle to proceed.. ya see when water is stagnant... shit dies and starts to stink... you understand that spinny.... oh on the bikini... thong or briefs? Me I likes the briefs... thongs are just too cheekky...

Listen little buddy, don't let Dubai get you down. Plenty of possum juice left in the trough and plenty of little 80B crapshoots to go bust. Just stay back from the ledge, its windy. Only the truly epic helmsmen dare to fly a spinnaker in this weather.

"Mortgage applications for new home purchases hit a 12-year low in the middle of November"

If what they are talking about is only purchases of newly built homes, this could be a misleading statistic: if new home starts are down, applications for sales of new homes that never got started don't occur (duh). So, if the market has shifted towards buying existing homes more than newly built homes, applications for new homes could fall off the shelf, and we could still have an improving housing market.

____________________

David Goldsmith
DG Neary Realty

or not. and it's generally new homes that add to gdp and growth, not moving people from one home to another without appreciation.

household creation. that's what revives a housing market. we're way below average for household creation, and we've had an increase in housing inventory, new and old. we may even be seeing net household retraction.

holiday sales have been "tepid" so far.

Can a market that was stupid for years , ultimately supported by greater fools selling to even greater fools. be stupid forever?....

AR: while I agree with what you are saying in an even or up market, but in a seriously down market (and across the country, that is surely what we've got) adding tons of new housing stock when the existing housing stock can not be absorbed by the market does more harm than good. So, in the part quoted, the concept that "Mortgage applications for new home purchases hit a 12-year low in the middle of November" HAS to be a bad indication isn't necessarily so as long as it's in the short term. And what I'm saying is that it can be a FALSE indication of what the market is actually doing. Perhaps I'm overly sensitive to "disinformation thru statistics", but the statement clearly has an agenda attached to it, and I was really just trying to point out that taken alone, it doesn't give you a total picture as to what's going on in the market, and that you could (again, in the short term) EASILY have a slow down in the number of applications for NEW houses going down while significant repair is being done to the market as a whole, ESPECIALLY if you've had a sharp decrease in new housing starts preceding it.

"Can a market that was stupid for years , ultimately supported by greater fools selling to even greater fools. be stupid forever?...."

I would say that it is possibly depending on how thinly traded the market was. But in any moderately large sized market, I would say that the odds are asymptotic to zero.

____________________

David Goldsmith
DG Neary Realty

In the past few months we have seen new mtg applications at a new low,decreased new housing starts and and increase in existing home sales. All necessary and positive to work off the bloated inventory. This is how bottoms are formed. We are either in a sweet spot to buy cheap RE or basing making ready for a new low. I think we are in the former. Nationwide there are many more foreclosure prospects out there. I don't think what's left of our banking system can survive another wave of foreclosures. Loan modification will become the new norm in 2010. If you go back to the beginning of this crisis everyone from the gov't on down initially tried to talk our way out of this mess. As reality set in they had to take action. Last man standing waiting for a miracle is the banking complex. They got bailed out but are still surfing treacherous waters. I think they get religion in 2010.

No

Anyone buying before the banks take the astronomical hit of commercial loan defaults in 2010-12 is taking an enormous risk. Many will take that risk and we might be reading how they end up on matt's couch while they whine about how "no one knew" and "everyone said it was a bottom" In fact, Richard LeFrak (a vested pundit) just today on CNBC said it was a bottom now and everyone should take this once in a generation opportunity to buy. He might be right but I think it is criminal to say so unless you are absolutely sure about the outcome of commercial defaults in the banking system. Obtw, LeFrak makes a lot of money if everyone decides to buy now.

If you can take the risk now --meaning that you can lose everything in the transaction and not end up on someone's couch -- then go ahead. Everyone who can not afford to lose big needs to stop listening to people who have a financial interest in calling a bottom. It is true that the rich get richer and they could take a risk now that might make them real money - or not. But it is a responsibility of the less rich not to become poorer. It is gambling. And if you take the gamble now, you should not expect to get bailed out.

and even if...by some huge stretch of imagination, it is a bottom.... (which as i write this strikes me as impossible) then why won't we stay stuck here?

4 years after '87... four years.

Wannabuy-- wmburg may be a decent investment at 600psf (not clear), but nyc real estate is in no way cheap right now. Maybe you could make that argument in vegas or miami.

No one can really discuss the market level in manhattan in any meaningful way, and certainly not call the botttom, until so many new buildings not selling out at normal rates start to be sold like in a normal market....and when let's say at least 3/4 of the offered properties are priced within say 15% of recent sales levels. but that is nowhere near the case now (as one said, 80% of sellers still delusional).

good post, apt23. I think prices will fall, maybe 50% below bubble prices, maybe more.

{rrrrr...... I hate it when you type a post and it disappears... rrrr}

"Richard LeFrak (a vested pundit) just today on CNBC said it was a bottom now and everyone should take this once in a generation opportunity to buy."

If I'm remembering correctly, LeFrak fairly recently decided to stop all new construction activities for the first time since like WWII (not 100% positive of that, though). So, if he's started some new projects or revived some old one's, his statements are at least believable in that he actually means it. but if the have NOT done so, it is a little hard to believe someone telling you we're at a hard bottom and "everyone should take this once in a generation opportunity to buy" when that means he's also implying prices are on their way up, but he's not building into it.
____________________

David Goldsmith
DG Neary Realty

but in fairness, they are putting jake to work.

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20091007005592&newsLang=en

IMHO,
The show is not over. There are no true signs that the RE market is ready for a rebound. This is the classic error of confusing the equities market with the economy. There are variables afoot that have no known president such as the current monetary supply and current unemployment. The unintended consequences of just these two variables transforms even the most reliable crystal balls into a snow globe. The last down turn which really hit the RE market closer to '89 than '87 took 4 years not to recover but, to change direction. Could it be possible that this situation of even greater calamity could reverse course in such a shot time? NO WAY, NO POSSIBLE WAY, ON WHAT PLANET????
It is what it is. Sure it will recover but...when? Lefrak is a cheer leader. It's in his best interests to cheer just like SteveF.
Don't you wish RE had hot babe cheerleaders?

falco: RE definately has hot babe cheerleaders!!..unfortunately, most of them work in strip clubs now

I'll always have Dolly

you know what?

New York is the f'in greatest.
I loved it in the 70's when it was a cesspool of degenerate decay. I even loved it when they tried to Disnephy the place. I've been to many places and they all have their charms but, nothing compares to the Big Apple. In fact, one of the reasons I think it's easy to be a bear is because I want more of it for myself. There I said it. I'm a selfish bastard with a love affair for the most difficult of mistresses. She gives me little personal space and makes me work intensely for the tiniest of affections. Every interaction costs me cold hard cash but...I'm a freak! I love this crazy place.

I'm such a naughty New Yorker and, I've been bad......very bad.

You been a bad Boy trying to steal my NYC re, face jersey and bend over. ; )

falco, atone or you may come back in your next life as dolly's child. or one of her many blackberries.

Which blackberry and is it on vibrate?

only dolly would know. and her blackberry.

and your toilet seat