It is late 2007. Everyone is buying Manhattan RE. You shouldn't let this get past you. You need to buy- can't make any money renting, can you? So you find a nice 3 bd at a new dev, The Element at W. 59. In spite of the fact that there is a record number of apts being built in the area --10 WEA, 200 WEA, The Rushmore, The Ariels, etc, you think you found a bargain. The brokers say it is a great... [more]
It is late 2007. Everyone is buying Manhattan RE. You shouldn't let this get past you. You need to buy- can't make any money renting, can you? So you find a nice 3 bd at a new dev, The Element at W. 59. In spite of the fact that there is a record number of apts being built in the area --10 WEA, 200 WEA, The Rushmore, The Ariels, etc, you think you found a bargain. The brokers say it is a great time to buy. In spite of fact that there are constant refrains about a RE bubble in the media, they say it doesn't apply to NY. The RE threads all shout, Buy Now Or Be Priced Out Forever. Prices keep going up in the Element, so you pull the trigger and buy 20B for $2,550,000. The best $1527 psqft in the area. Apts at the Element are flying off the shelf, sales volume is up in NYC, it has got to be a great time to buy. This could be your last opportunity. You don't know if the developer is sitting on a dozen of the same apts because there is no transparency and the brokers say there is no shadow inventory
Cut to exactly one year after you close on your apt. The sponsor closes on the exact apt for $1,850,000. Of course that doesn't account for floor height. Oh wait, sponsor then closes on the same apt directly above you for $1,895,000. Seems they had a lot of this inventory. Guess that nearly three quarters of a million dollars is really gone. But you could double down and get your money back. The brokers say it is a great time to buy. How about an investment property at the Rushmore?
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Response by joedavis
almost 16 years ago
Posts: 703
Member since: Aug 2007
this is perfect for lemming 2007
how about lemming 2009
where do they rush?
does the plunge off the cliff land them in warmer or icier waters?
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Response by apt23
almost 16 years ago
Posts: 2041
Member since: Jul 2009
i think that just like in every other bubble city, sponsors will continue to knock the wind out of original buyers. The successful developments will continue the small, multiple cuts till they are sold out --like The Harrison which I believe is now down to 20% off. The troubled developments will make a show of small cuts until they can't hold out any longer and start with drastic cuts. If it is like other cities it will be 40 -50% down. Anything they can get to get out. And all the while, brokers will be saying it is a great time to buy. Media will be saying housing is stabilizing. And the lemmings will not have the patience to wait it out. I think people who buy in new developments now, especially if there is even a whiff of trouble, will have their knees cut out from under them.
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Response by Riversider
almost 16 years ago
Posts: 13572
Member since: Apr 2009
Nice!
Reminds me of the stock market. Google just hit $400 should I buy anyway? Of course not! Move on.
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Response by sidelinesitter
almost 16 years ago
Posts: 1596
Member since: Mar 2009
apt23 - this is great stuff. I now regret my unkind and inaccurate response to one of your posts on another thread earlier in the week.
Watching some of these developments twist in the wind is very entertaining. The only problem is pace; it makes watching paint dry seem active.
"I think people who buy in new developments now, especially if there is even a whiff of trouble, will have their knees cut out from under them."
http://www.youtube.com/watch?v=zKhEw7nD9C4
One small correction: 20B at the Element closed at $2,580,000, not $2,550,000.
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Response by apt23
almost 16 years ago
Posts: 2041
Member since: Jul 2009
SLS: no problem. and since judging from his responses since he is back on the boards, seems you really had a case. And thanks for the correction. I was obviously subconsciously trying to stem the bloodletting -- even if was only a mere flesh wound. And btw, 20 B closed in early 2008 not 2007 - that was a typo. A few extra months to know there was risk and still choosing to ignore it.
Re: Pace. yes, painfully slow, but I think it will pick up. Look at the recent sales at Tribeca Summit. The invincible Tribeca! The recent sales undercut some of the same apts in contract by half a mil or so. And btw, between the sales, the in contract, and apts on mkt, they seem to be short about 21 apts. Shadow inventory? I wouldn't buy in a new development till I had the status on every single apt in the building. I would want to know exactly how many times the developer could screw me.
Riversider: Google is over 600. Sure buy, buy, buy
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Response by Riversider
almost 16 years ago
Posts: 13572
Member since: Apr 2009
Do buyers realize how many(not all) apartments are cookie cutter variations?
Apt23, I can no longer tell the difference between a 700 square foot apt in Avery,120,200 WEA 10 WEA..
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Response by apt23
almost 16 years ago
Posts: 2041
Member since: Jul 2009
Riversider: Sure you can. The ones with the buckled floors are in 10WEA. Go for the subtle distinctions.
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this is perfect for lemming 2007
how about lemming 2009
where do they rush?
does the plunge off the cliff land them in warmer or icier waters?
i think that just like in every other bubble city, sponsors will continue to knock the wind out of original buyers. The successful developments will continue the small, multiple cuts till they are sold out --like The Harrison which I believe is now down to 20% off. The troubled developments will make a show of small cuts until they can't hold out any longer and start with drastic cuts. If it is like other cities it will be 40 -50% down. Anything they can get to get out. And all the while, brokers will be saying it is a great time to buy. Media will be saying housing is stabilizing. And the lemmings will not have the patience to wait it out. I think people who buy in new developments now, especially if there is even a whiff of trouble, will have their knees cut out from under them.
Nice!
Reminds me of the stock market. Google just hit $400 should I buy anyway? Of course not! Move on.
apt23 - this is great stuff. I now regret my unkind and inaccurate response to one of your posts on another thread earlier in the week.
Watching some of these developments twist in the wind is very entertaining. The only problem is pace; it makes watching paint dry seem active.
"I think people who buy in new developments now, especially if there is even a whiff of trouble, will have their knees cut out from under them."
http://www.youtube.com/watch?v=zKhEw7nD9C4
One small correction: 20B at the Element closed at $2,580,000, not $2,550,000.
SLS: no problem. and since judging from his responses since he is back on the boards, seems you really had a case. And thanks for the correction. I was obviously subconsciously trying to stem the bloodletting -- even if was only a mere flesh wound. And btw, 20 B closed in early 2008 not 2007 - that was a typo. A few extra months to know there was risk and still choosing to ignore it.
Re: Pace. yes, painfully slow, but I think it will pick up. Look at the recent sales at Tribeca Summit. The invincible Tribeca! The recent sales undercut some of the same apts in contract by half a mil or so. And btw, between the sales, the in contract, and apts on mkt, they seem to be short about 21 apts. Shadow inventory? I wouldn't buy in a new development till I had the status on every single apt in the building. I would want to know exactly how many times the developer could screw me.
Riversider: Google is over 600. Sure buy, buy, buy
Do buyers realize how many(not all) apartments are cookie cutter variations?
Apt23, I can no longer tell the difference between a 700 square foot apt in Avery,120,200 WEA 10 WEA..
Riversider: Sure you can. The ones with the buckled floors are in 10WEA. Go for the subtle distinctions.