J.Miller in distressed investment venture, that's why he is pushing the "shadow" talk!

He has been talking about this for a long time. He is one of the most respected people in RE. Though you were wrong re RE, you were right about the stocks rebound. Don´t let that thread puff your ego so much.

mimi, the reason why I am a successful investor is b/c I have no ego. I don't like egos they provide for a really stressfull and frustrating life.

But I was right on real estate too. If you heppened to buy in Feb 09 from one of those "must sell sellers" then you scored. But getting back to Miller....

He without a doubt started ramping up his shadow talk within the last few months. Now I know why.

"Few months"? Just a cursory google search shows him talking about shadow inventory back in May.

You can do better than that for a conspiracy theory.

"the reason why I am a successful investor is b/c I have no ego"

OMG. No introspection, either.

SteveF, you could be right about the conflict of interest, but does that necessarily mean Miller is wrong about the shadow inventory? There are different types of shadow inventory. Are you saying all of it will have no or limited impact in 2010?

Topic discussed here:

http://streeteasy.com/nyc/talk/discussion/17215-sign-of-the-apocolypse-top-nyc-appraiser-joining-distressed-condo-investment-group

I don't see this as a conflict of interest, but adaptation to reality. And, he has been higlighting the threat of shadow inventory for over a year.

"mimi, the reason why I am a successful investor is b/c I have no ego. I don't like egos they provide for a really stressfull and frustrating life. "

Now, that's downright bizarre.

Let's put steveF into Ponzi perspective:

http://www.streeteasy.com/nyc/talk/discussion/3181-poll-whats-going-to-happen-to-re-market-in-ny

SteveF "I'm trying to create value for my condos. If I feel street easy influences that than I'll be there to counter anyone who prevents that. I want [prospective condo buyer] to buy to increase value. This way I win and all apt owners win. It could be the never ending, everyone wins ultimate pyramid scheme."

Pot = kettle = black.

Ego = fantastically large.

Are the super-ego and the id valuable to investors?

The id is valuable to porn stars, the superego to priests, and the ego to politicians.

Steve, thank you for the giggle. Earlier, Juiceman had me questioning my own sanity where SteveF is concerned. Thank you for the reminder that he is one egotistical moronic idiot who happened to get one call right. cheers.

Seems to me that the really interesting thing in the article is that the new firm will be seeking to buy condos at much lower prices than they are now being offered in order to make the properties attractive on a "rental" basis.

Condos are generally selling at a ~4% cap rate. Rentals are selling at a ~8% cap rate.

So the new firm would be asking the banks/developers to take a ~50% haircut. And they might just go for it as a bird in the hand is worth two in the bush. Eventually, (four years?) the firm might then try to sell the properties in a more favorable environment to condo buyers...at probably a good deal lower cap rate than 8%.

If they are successful...and I think they've got a good shot at success...it will underscore how crazy condo pricing is versus rental pricing. Caveat emptor to condo buyers today!

In addition, the firm has indicated that they may become a REIT. Then rhino will have the nice hedge he's looking for...assuming they emphasize Manhattan properties.

Why is this such a shock?

Not necessarily a shock. But it is an indication that the gridlock (including all the shadow inventory) may be starting to break early in the new year. So far the banks have been just "extending and pretending." I think there's a good chance that many will begin to "bite the bullet" in the new year.

Not surprising to me that JM would smell the opportunity and participate. A lot of opportunity out there for liquid entrepreneurs. And JM, of course, brings strong valuation skills and credibility to the table as the firm lines up (mostly) institutional investors. Likely to be some interesing co-investing opportunities.

Would also put further downward pressure on first-class rentals. Yea!

And could set off a wave of competitive price cuts as developers conclude that it's far better to cut prices an extra 25% than to have to cut them 50% to attract a rental investor.

One can hope.

Good article. How can one be on a team, as an equity holder, and claim to make "independent appraisals"?. Sellers investing clan offering appraisals? Worth the paper it is printed on. Something is seemingly very rotten in Denmark...

People may like the data JM has put out -- but his status as an independent is seriously at risk with ventures such as this...

evnyc says >steve, thank you for the giggle. Earlier, Juiceman had me questioning my own sanity where SteveF is concerned. Thank you for the reminder that he is one egotistical moronic idiot who happened to get one call right. cheers.<

it's 2 calls right evnyc.... (1) Manhattan real estate buy call for late 08, early 09 from desperate sellers and (2) the stock market call.

I do all this and have not had to call anyone a nasty name either.

Sunday, what I am implying is that the only real "shadow inventory" talk has been coming from J. Miller. He has been pushing the "watch out for the shadow inventory" talk for many months now. I didn't think much about it at first. But he has been ramping up the talk for the second half of the year. After his constant shadow commenting, it started getting my attention. He has been the biggest vocal support for the shadow debate. Now I know why. His motives are clear to me now. Banks unwilling to sell properties to his new venture at really attractive prices. So let's put a little scare into them. I don't think he is necessarily doing this on purpose. It's just his weak human emotions taking over. He is now biased and compromised. It has happened b/c he is human.

Stevejhx - thanks for bringing up that old thread. This is the problem with people, they forget when their calls were wrong and focus on when they became right. SteveF did get the stock call right, I give props to that, but for Manhattan real estate - no.

http://streeteasy.com/nyc/talk/discussion/3181-poll-whats-going-to-happen-to-re-market-in-ny

21 Months Ago STEVEF quote ---> which means MARCH 2008 when Manhattan real estate was pretty much still trading right near peak levels - maybe slightly down, thats it - the adjustment as we all know only started in September '08 after Lehman failed and bottomed in FEB/MARCH '09 as defined by fear trades and the best deals for the first wave down

"Looks like we've got a house full of bears...well then it's time to buy. The fed has pumped 1 TRILLION dollars into the market already. What does that mean a year from now...inflation. Which in turn means assets become more valuable. It's not rocket science here, it's all been done before, this time is no different."

"What does inflation mean to you then? Let's look at the scenario obviously your bet is prices will soften my bet is prices will move higher. Fed injects massive amounts of money, not long after companies use money, economy ignites, more labor needed, wages increase from competition,...more money in peoples pockets means more buying power, more buying power means higher prices for sought after assets."

"dco...I feel with the aggressive Fed action the best is yet to come. My money is on Manhattan. I feel if you are betting against it you are wrong and will lose money. But hey your loss is my gain. So thank God for people who think like you."

Again, this is MARCH 2008

So I must disagree with your comment that you got the Manhattan real estate call right, because you were calling out BUY signals way before the market adjusted downward in the face of the bears argument that an adjustment was coming. But, you did get stock call right. Human psychology is a funny thing.

"You housing bears know your waiting day in and day out for the credit crisis to ...hit! and yet the days go by with Manhattan unaffected and recovery getting closer and closer. "Is the Fed injecting close to a trillion dollars into the banking system having an impact yet?!" "Man this crisis better hit!" The days proceed along as you get more and more anxious....that has got to be one s-cky feeling. Just buy already. "

Love this one.

PS: does anyone know where the threads are for the bulls vs bear arguments even before that one started in MARCH 2008? I know there were a few very heated long ones with spunky a few months earlier? Anyone remember them?

It would be interesting to look back and see what peoples arguments were then, how things happened, and what their arguments are now

Noah,
Happy Holidays Bud! As Arnold would say..."I'll be back...to comment". You put a lot out there and I'm a little busy at the moment. But I'll take you on soon. I promise.

Happy Holidays to you too SteveF! haha. yes, dig it up! Hey, you did get stocks call and reflation of Manhattan after March 09 calls right, and I admit I got both of those way wrong for a the first 2-4 months of it! So, if you gather my comments from say March, April, May, or June 2009, I admit I was wrong. Nothing wrong with being wrong my friend.

But you did call out Manhattan BUY signals way earlier than early 2009! So, you can admit to that one being off - nothing wrong with it

and PS, I did write about the surge in sales volume that I was seeing in the field on urbandigs back in May, June, etc..even though at the time I didnt buy into the sustainability of it. That was where I was wrong. I think the sustainability of the activity here given the nature of the problems we faced was quite surprising. I cant deny it. But on urbandigs.com, I will always tell it like I see it, even if it doesnt jive with my thinking at that exact time. Ill never sugar coat or bullshit what I see happening in the field. That much Ill tell you.

but...all in for 2009, total transaction number is down around 15-20%, no? and, prices are definitely down at least that.

well probably, but you have to understand where we are now and where we came from. That number is skewed because sales volume - meaning closings, is VERY lagging. So we have solid pipeline sales, pending sales, that are yet to register.

The freeze up was SEPT 08 - MARCH/APRIL 09. This period saw plunging sales and defined the wave down. Its what happens when bids disappear, which they did. Then, sales started to surge with JUNE, JULY, AUG seeing around 1100-1200 contracts signed a month, more than double what was being signed in say FEB/MARCH!

So, yes prices will laggingly show deals happening down 15-20% from peak levels Im sure, if you compare to peak, but the market today is trading higher than it was in FEB/MARCH/APRIL.

So its all relative I guess. Up from 8 months ago, down from 21-30 months ago.

"I do all this...."

Damn, steveF, all you forgot to do was pull a rabbit out of a hat.

but...if true, why have so many places been pulled from the market and why is so much condo inventory not really on the market? seems to imply that there continues to be a strong disconnect on pricing.

aha! but have so many listings realy been pulled lately? My data shows the pace of listings being pulled from market has declined noticeably over the past 6-7 months! So called shadow inventory, declined from 13,500 or so to about 11,300 or so - a sign that fewer sellers are removing listings. Not to say sellers arent removing, they are, but the pace of removal has slowed!

When the new urbandigs.com launches, you will see all of this. Its quite interesting I must say! Especially when looking at this metric back in Aug/Sept 2008 when the lehman fiasco occurred.

Let me as you a question, what do you think happened to listings removed back when lehman failed? Did it spike up? Or, did it plunge?

logic would say it went down, so i'll guess up.

not only did it go up, it surged up! Which tells me something. Perhaps sellers are one of the best indicators as to the health, or lack of health, of the marketplace. As reflation occurred, this metric fell. When lehman occurred, this metric spiked up. So for today, its as if sellers are happy with how the market is, so fewer sellers are removing listings.

I love it.... SteveF loves UD, until UD proves him stupid.
THen he's a fan of J. Miller, until Miller starts showing him to be an idiot.

Sorry, steveF, game is up. You're just an idiot.

"it's 2 calls right evnyc.... (1) Manhattan real estate buy call for late 08, early 09 from desperate sellers "

Except, uh, Steve made his BUY call in March! BEFORE it tanked 25%

Meaning Steve said buy at the EXACT WRONG TIME TO BUY!

Nice job, moron!

I'm surprised no one has mentioned miller's partner in this venture, Gerald Guterman, and his history in NY Coop and Condo conversions.

somewhereelse
about 9 hours ago
ignore this person
report abuse
"it's 2 calls right evnyc.... (1) Manhattan real estate buy call for late 08, early 09 from desperate sellers "
Except, uh, Steve made his BUY call in March! BEFORE it tanked 25%
Meaning Steve said buy at the EXACT WRONG TIME TO BUY!
Nice job, moron!

How do you call someone a moron when you don't even have a job?

http://www.nytimes.com/1988/04/17/realestate/guterman-s-troubles-jolt-client-co-ops.html
http://www.nytimes.com/1988/02/17/nyregion/a-king-s-fall-tax-changes-reverse-rise-of-developer.html
http://www.nytimes.com/1990/01/28/realestate/perspectives-cooperative-conversions-the-problems-of-sponsors-and-owners.html

> How do you call someone a moron when you don't even have a job?

What does your stupidity or the stupidity of SteveF have to do with my employment status?

hfs, now I understand why you are the top ignore button victim. I'm almost there, but not quite.... but at this pace, you'll post another 5 moronic posts without anything of value, and then you'll get it.

But I always like an underdog... so you get the 5 posts.

The J. Miller thing is interesting. As an institutional buyer capable of buying in bulk he can strike deals others cannot, Plus there may be some economies of scale in administering the portfolio.

"You housing bears know your waiting day in and day out for the credit crisis to ...hit! and yet the days go by with Manhattan unaffected and recovery getting closer and closer. "Is the Fed injecting close to a trillion dollars into the banking system having an impact yet?!" "Man this crisis better hit!" The days proceed along as you get more and more anxious....that has got to be one s-cky feeling. Just buy already. "

Love this one.

The Fed is targeting inflation, because they know the average person looks at nominal and not real return. By inflating our way out of this mess, the thinking probably goes that they solve the under-water property. Any collateral damage is acceptable(no pun intenteded)