Another Fun Number - Corcoran Says New Dev Prices down 14% This Quarter

and goin lower

wow, nothing from the peanut gallery....

opening my peanut shell now: these are backward looking #'s. i bought based on macroeconomic trends. i draw confidence from the widening yield curve(bond traders saying we have a strong recovery at hand) and the v-shaped stock market rise. if you wait until the sales numbers start looking good you've missed a good entry. most asset buyers are overly cautious and buy higher than where they should. i prefer to buy at or near the bottom. and that's where we are.

fun?

Even most bulls predicted this, but OK I'll play.

ooooooo! shocking!

Any more nauseatingly predictable stats?

> Even most bulls predicted this, but OK I'll play.

If bulls had predicted a 23% decline (so far), they'd be called bears...

Most bulls said we'd be down 23%! I love it! Now thats a funny one!

> Any more nauseatingly predictable stats?

Let me get this straight..... bears get burned at the stake for their predictions, then get proved right, and the bulls are claiming they called it!?!?

I love it!

ROTFL.

Who "burned" anyone "at the stake"? A little sensitive/hysterical, no? And you're blatantly twisting the facts: spinnaker was referring to the divergence of new development vs resales, not the overall market.

Right on bjw!! The "hysteria" reference was not without basis...

When new dev is (not) selling at a huge premium over re-sale it's a fairly safe prediction those prices will need to eventually come in line. Not at all surprising that we are beginning to see some stats supporting this. Especially now that the gloss has come off the benefits of buying into amenities like swim-up roof top tiki bars and 23' lobby fireplaces.

> The "hysteria" reference was not without basis...

Yes, you simply applied it to the wrong group of people.
Then again, you're the one who just said bulls called 23% down.

Thanks for the laughs, much appreciated.

I really laughed at your image of martyring yourself in the name of real estate predictions. Methinks the drama queen doth protest too much.

Anyway, to get back to semi-intelligent discussion, spinnaker (and I posted this in your thread, but hasn't really been addressed), don't you think there's a possibility that once new development prices come in line with resales that the latter could take a further hit? The only way I see this being avoided is if the newer stuff falls a bit short (ie: it's still a bit pricier), which is also certainly possible, especially since it seems more developers are now focused on actually fully completing their buildings before moving on to other projects.

hmm... StreetEasy reports average prices of new developments in Manhattan up 6.4% since last quarter and up 10.5% since 4Q2008

SEJunkie, what I found interesting was that average price went up, but median prices went down (both QoQ and YoY), which indicates that a fair amount of "trophy" new development closed last quarter. That's surprising, as these buyers were presumably not at all motivated by the tax credit.

(sidenote - hilarious that Troll Control removed somewhere's insults)

"opening my peanut shell now: these are backward looking #'s. i bought based on macroeconomic trends. i draw confidence from the widening yield curve(bond traders saying we have a strong recovery at hand) and the v-shaped stock market rise. if you wait until the sales numbers start looking good you've missed a good entry. most asset buyers are overly cautious and buy higher than where they should. i prefer to buy at or near the bottom. and that's where we are."

Glad you are finally on board.
Another new high today on junk bonds! Businesses must be rock'n!

http://finance.yahoo.com/echarts?s=SHIAX#chart3:symbol=shiax;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

bjw2103, According to the SE report, 16 properties in new developments sold for over $10mm, a 100% increase in volume over Q3 for the over $10mm, new dev. If they are trophy purchases, then I guess we could possibly conclude that some wealthy people out there think this is a good time to buy in Manhattan? Are their actions tied to the rest of the Manhattan market?

SEJunkie - a couple of big sales can easily skew avgs. Pay closer attention to the charts in the latest report that shows median price vs. # of sales for resale and new dev. and you'll see the disconnect.

bjw2103 - for me its a bit complicated to wrap my head around but I'll give it a try. The quick answer is yes but there's more to it. For sake of argument I'll call new dev 'condo' and resale 'coop'. There's is a close relationship between rental prices and condo's, many having been bought for that purpose (or option), so as an investment vehicle condos became attractive and demanded a premium. As rents decline the prices follow, eventually. To look at coops, you take away the speculative/investment element and you have a product that was never priced with an eye towards cap rate, rather it was priced more directly to whatever intrinsic value a prospective buyer saw, more along the lines of livability. To a certain extent each appeal to a different buyer pool so you have to ask if a family considering an uptown coop in a good school zone would even consider a condo if it doesn't meet their basic requirements. I think new dev will retreat to the point where investors will be tempted to return but that could be a long way out and a long way down. Right now according to SE condos are sitting at a 50% premium over coops.

I just couldn't put things on hold until I was 100% sure of market direction, I needed to get busy with schools and we were growing weary after 5 moves in 5 years. We watched the big dip and activity return so we jumped. I'm willing to live with a little downside risk for peace of mind and a settled life. cheers.

(sidenote - hilarious that Troll Control removed somewhere's insults)

but funnier that bjw didn't notice they got his too!

ROTFL.

I love it!

"but funnier that bjw didn't notice they got his too!"

Happened after I commented. The funniest part is all I said is that your reasoning ability has suffered. Troll Control, you've gone too far! Seriously though, you've been dinged far more, with good reason. I love it!

"Right now according to SE condos are sitting at a 50% premium over coops."

That is flabbergasting. On a sales price basis or median ppsf? Best of luck to you and your family, spinnaker - it'll be easier from here on out!

I guess this guy didn't get the memo... http://streeteasy.com/nyc/sale/487232-condo-450-west-17th-street-chelsea-new-york . Check out this attempt at a flip at the Caledonia...

I almost considered this exact unit (at the price he paid, from what I recall) back in 2006 when they first started marketing and I couldn't stomach a 2BR/2BA at 867 feet, let alone what I already thought was a crazy price...Is he serious? Bets on what it will actually go for?

$1.050mm.

Actually, that's what he could get today if he asked a realistic $1200. If he is as unrealistic as the ask...then he'll hold out so long it will be more like $800/ft.

50% being an average I am not at all surprised by the 100% premium.

Rhino86, I thought you were in jail...?

Jail?

jail:

–noun
1. a prison, esp. one for the detention of persons awaiting trial or convicted of minor offenses.

Rhino, prison violence can get you put in the hole

So witty. Did you start your valedictory address with a definition, too?