all bearish threads lately...where are the bulls?? prices are breaking down going into 2010..wheres the bonus $$$ ???

Well for simplicity coop prices are 17-18x rent. Maybe they should go down to 10x, but won't. Does that mean we can hold 17x? Seems impossible to me. I still content the market is on fumes. People are using money earned in 04-07 for down payments. As fewer banks hire fewer people and more families on the margin make decisions to leave the city, I think its plausible that prices meander down for a long long while. My wife is telling me right now there is a subtle change in tune in many women she knows who used to say they'd be in Manhattan for the foreseeable future to poking around different suburbs and acceleration a plan to leave to one or two years. We are squarely in that camp. Two years ago, it just felt like I could buy a big place - the final solution - and pay the mortgage off entirely in 3 to 5 years. In that way, it seems to me like private school was not such a big deal. In two or three years, the small banking hire classes of 2009 and the fires and disgrunted of the class of 2008 are going to create a "gap" that in the buyer pool would have kept things marching up. No matter what the government does, it will just slow it down. Finance is in secular decline. The economy will be better in 2012 and Obama will keep his seat. The trend in American culture is to the liberal side. That is not good for finance, and it may be good for NYC but it will not be good for NYC coop and condo prices. Further, the deep discounts we have begun to see and will continue to see in Brooklyn and Queens in invented neighborhoods will pull some marginal folks out of Manhattan as well.

Its all at the margin. At the margin families will leave Manhattan in greater numbers. At the margin their are fewer banks paying the big bucks to fewer people and hiring fewer new grads. At the margin there are fewer hedge funds with less capital. At the margin income taxes and property taxes are rising. At the margin interest rates have an upward bias. At the margin its more difficult to get a loan.

Its not that the bear case its a lock...Its that there is no bull case. The bull case is that we can stabilize and bounce a long, and you have the opportunity here to buy a place and pay more than rent unless you want to ignore interest you could be making on your downpayment in short term bond funds.