As of today, only 8 foreclosures in Manhattan

perhaps technically. but what about bank sales and bank auctions. There have been at least 5 or 6 discussed on these boards that I know of so they are apparently not counted as foreclosures. Clearly numbers can be manipulated.

yeah apt23 but even adding in the few anecdotes the reality is the numbers are trivial so far in manhattan...

Yes, I know it takes time. I think the real question is where there are significant numbers of delinquencies in manhattan condos; if there are not, that is not necessarily bullish, but it certainly isn't bearish.

I don't think there will be many foreclosures here in Manhattan because this is a recourse state. There will not be the "strategic foreclosures" that plagued other states. In Miami, the banks are finally getting around to suing people that still have assets yet walked away from underwater mortgages.

If prices are to drop another 20% or more in the next year or so (certainly a significant risk in the view of many on this board) then I would think you would start to see more delinquencies, certaintly short sales at some point, probably some foreclosures (some recourse states have had upticks in foreclosures). It's not like the market will one afternoon crash; these things are cumulative. I think it is worth noting whether or not delinquencies etc. are ocurring.

apt23, I don't believe your characterization of New York state as a recourse state is factually correct. As I understand it, lenders have the option of foreclosing or not foreclosing and filing a suit for payment of the outstanding debt. If you have a deed-in-lieu-of-foreclosure, my understanding is that the defaulting party must demand a no recourse provision in order to be protected from subsequent suit by the lender. Anyone able to confirm this?

I thought that NY is a one-action state..meaning that they either foreclose or they sue- but can not have it both ways. I frequently see Streeteasy posters refer to NY State as a recourse state. What is the true story?

Technogic, you haven't finished reading chapter 1 of 'if you can demonstrate lower prices based on comps'. This books contains a lot of chapters, I'm thinking chapter 7 or 11 is the finish.

W67 - Im not even following your post, although the chapter 7/11 reference was not missed. If you could be clearer, it would help.

"If prices are to drop another 20% or more in the next year or so (certainly a significant risk in the view of many on this board) then I would think you would start to see more delinquencies ... "

Wrong, Jim.

It has MUCH more to do with people being UNEMPLOYED than it does with the real estate market.

let me just say that the "smart" ones took the money and ran, as demonstrated by the prolific comps threads. They had the equity, knew the score and got the F out. The MAJORITY of ppl who will likely declare bks, and or short sales by their very nature do not know when to take the chips off the table. i would paradoxically expect a "lull" in the comps thread as it becomes clearer the mkt will not stop and will not turn around.

It will be at this time that the first bulk/wave of foreclosures and short sales in nyc will happen. As evidenced by the recent activity off the 25% drop, nyc if anything is liquid (to a point). Just ask yourself, how many ppl do you know that have $400K in a chking account to plunk down on a $2MM 3bdrm? And 10, $40K discover open a credit card lines do not count. And then $100K safety, plus a "secure" job and a need/desire to stay in nyc for 10 yrs?

Every lemming that bought, do me a favor and keep a list of "dream" homes priced at 2x their current bought price..... it may not be tomorrow, or next month or next qtr, but when that "dream" starts to close or start listing closer and closer to your current "in" price, just know I called you a lemming first.

fair point matt that unemployment is key..but obviously price level and trend direction is also very important

Knee deep into the mnh market "collapse" (what 18mos since Lehman?) and 4 foreclosures south of Harlem. I know, I know, they're all in the pipeline... But IMO those who needed to exit the market for whatever reason, could then and still can now. Some felt pain and took their medicine but I would associate the term collapse with those markets where buyers can't be found. Clearly not the case here. Some still believe this market is artificially propped up by underemployed HELOC addicts maxing out their discovery cards - in the hopes of liquidating at the bottom of the marked, one would assume. And so they sit and fester and wait, and wait, and wait. Now its BK we're all waiting for while the chief bottle picker "predicts" a paradoxical lull in the comps thread. omfg..

67 wrote: "i would paradoxically expect a "lull" in the comps thread as it becomes clearer the mkt will not stop and will not turn around."

-- what do you mean by that?:::::

a) a general decline in sales volume?

b) decline in number ofsales where there is a significant discount say 20+% percent off peak ? (but wouldnt that mean an uptick in prices?)

how else could there be a lull unless you're just referring to the act of posting, not actual market activity

or what....??

The entire Sheffield on 57th went into foreclosure. And its not the only one.

Kinda strange that you're ignoring entire buildings....

It's only strange because the OP was referring to residential foreclosures.

The sheffield isn't residential?

Thats probably news to the residents.

I would assume entire buildings would be the realm of commercial property. But who cares. Go ahead and include it if it supports your position.

Spin: I don't think the NYC market will collapse because of a precipitous rise in foreclosures -- as happened in other bubble cities. I believe it will be because of people like me. I have wanted to buy since I sold in 2005. I have been waiting for prices to come down ever since ( I had tax reasons to sell early to escape the bubble -- I had 2 properties and wanted to get tax deduction on both, which I managed to do). I would buy now if prices were reasonable. But I found an apartment to rent that is far less than it would cost to buy the same apartment -- it is much better, and much less rent than the great rental apartment I just left. As long as a potential buyer like myself can rent cheaper than buy, the market will come down, foreclosures be damned. The market will follow rents. So the comps thread will be in a lull because people like me will leave the market. Sales will slow as investors leave the market and buyers become renters.

Hey ever seen a bottle picker? Hard working ppl, the miami condo investment just didnt' work out for them.

jimmy, it's the direct result of the "herd" mentality built into nyc re mkt. 25% off is now accepted and baked in. There was a lull in fall/jan as ppl put their great hope into WS bonuses. Now the mkt is getting cleared by ppl pricing at or slightly below 2004 prices knowing bonus ain't gonna save nyc. So who is smarter, someone locking in the greatest bubble "profits? or lemmings saying 30% OFF, "jeez, can i have two apts, mr?"

I think beyond 25% off, it's starting to eat into "real" equity for some buyers in the 2004-2007 period. If nyc re takes an add on 5 to 10% drop in the next 2 qtrs, I'd expect a seller's strike. Alot of lemming regrets for having jumped in too soon. "Forced" sales to be the only mkt again. So now we are into the 24-32 month out post_lehman, mkt accepts this is a multi-yr process with 30% off as "mkt" and an "unkown" bottom. Scaring the snot outta sellers that thought they could wait this out.....I'd look for a summer lull then a 2nd significant drop b/f fall.

LM(kanadian)AO. Sheffield=> no, let's not count the $200K lost in leveraged home equity, just focus on cutting coupons for canadian ham...you'll make it back $.20 at a time....

67..ok..one way or another you;ve said and are saying..something else down spring or summer or b/f fall ...so let's see...that's fine with me...and, i think, actually, if we get another downturn at all notable (i guess 5% - 10%) it may scare people more than before and maybe pop the psychological bubble (personally, i dont think people have stopped thinking like bubble times)...[in the same way i feel that another major terror attack will have far greater impact on the economy of the US than the first one. and on nyc if it happens here.recurrence makes it harder to dismiss a risk....no one on this board ever talks about terrorism but i think it is a significant risk to nyc re, even if it didn't cause a great deal of loss of life]

i just recently sold my condo in soho and had looked at sites like this for some idea about what the "tone" was in real estate. my honest observation is that there are a lot fo sour grapes from those that have been lifetime renters in NYC and failed to ever commit to purchase for one reason or another. this leads to almost obsessive postings about how far prices have to fall, how overpriced everything is, rent vs. buy math, etc...

So some details. I work at a bank, I got paid really well in 2006 and 2007, really poorly in 2008 and crushed it in 2009. Despite what Bank of America did, the majority of bankers got paid a significant portion in cash. I am one of them. I bought in summer 2006 because I was sick of paying sky high rent and having no availability in neighborhoods/buildings that I would actually live in. The building was recent construction, and I paid close to $1M. I just closed for $10k less than what I paid. I paid no closing costs on the front-end as my employer covered those costs on relocation. I jammed my real estate agent down on commissions, and made the two agents make up a finla $10k at the end to bridge the gap btwn me and the buyer. I do not make over $1M a year, and my mortgage was obviously less than $1M, so due to the high level of interest I was paying and RE tax, I actually had a tax refund every year, or would have in years when I didn't have a lot of capital gains from my investment portfolio.

The final math for all the negative Nancys out there. Lost about $65k on my basis, but when I back out the tax shield benefits, I actually only lost about $20k. This is living in NYC, buying at the peak and selling after a massive economic collapse. So all-in, I feel like that $20k was worth it to live in a very nice, non-rental building. Don't all be haters, if you like a place and you can afford it you may want to consider purchasing it. Homes aren't investments, but at the end of the day you can still do ok even in the worst possible environments.

FLMAO... choppy...sour grapes? Hardly.

But let's get to your stupid math. After doing, this and that.. and screwing this and that and plugging this hole with sticky tape.. .etc. etc. etc..... you are out $20K. You forgot to include the change that was in the kitchen drawer and the free pizza coupons from prior owners.. .that makes your "loss" only $19,994.29.

you do understand not all $20K losses are created equal? How about if you sold at the height, maybe you'd be up $200K?

And if it was such genius... and you CRUSHED IT, why not double down BIG PENIS GUY? FLMAO.....

It's like the john having sex with 20 crack whores and saying, I only got crabs! I'm INVINCIBLE! Everyone should have bought RE in 2006! FLMAO... on my god.. thatz a classic... right therez... on my f'n god... someone tell me a puppy died... I just cant' stop laughing...

choppy, why'd you sell?

67thwannabe is right choppy, it's not sour grapes. Trying to put my finger on it... hmmm it's more like a case of severe anecdodalrrhea on top of a pathetic compulsion to belittle anyone with a contrary view. But we all love YA! Our little bottle picking buddy!

The problem with your "reasoning" choppy is that most people do look at their homes as "investments". They are correct in doing so when you look at the real estate market over the past 10 years. Perhaps that will have to change going forward but to rationalize a $20,000 hit seems a bit self-serving. That is nothing to brag about for a "banker".

"I would assume entire buildings would be the realm of commercial property."

Only if you change the definition of commercial property.

Residential property is NOT commercial property. They're opposites.

"But who cares."

You apparently.

"Go ahead and include it if it supports your position."

Thats how logical arguments work. I will.

The intent of the post was clearly geared towards single or small multi family homeowners, as opposed to corporations owning large residential developments. 8 foreclosures since Lehman is a striking statistic no matter how much you try to muddy up the water.

My Realtytrac search shows 1223 properties in pre-foreclosure. We have no way of knowing how many of them will go into foreclosure, or how many will be short sold. But 1223 is not an insignificant number, particularly against the backdrop of suggestions that foreclosures will almost certainly rise during the 2010 calendar year.

Interesting to note that as many co-ops were foreclosed on as condos. Much has been said about the stability of co-ops (granted the data set is small, still it is what it is).

"The intent of the post was clearly geared towards single or small multi family homeowners, as opposed to corporations owning large residential developments. 8 foreclosures since Lehman is a striking statistic no matter how much you try to muddy up the water"

You try to claim residential is "commercial" and talk to me about muddying the waters... funny.

I love how an entire building not being able to sell apartments so it goes under "doesn't count".
In Miami, maybe folks would have qualified for the mortgages first that they couldn't pay.
and here, maybe those types of folks just didn't qualify.

But apartments sitting empty and unsold, and the owner having to give them to creditors... and pretending they don't count.... now that is "muddy".

Congratulations on your sale choppy. Your loss was definitely quite small compared to the gloom and doom regularly spouted here. Even when the market hits the exact bottom, there will still be people here arguing that prices have another 20% to fall.

Of course, the "doom and gloomers" were the ones who were right, while folks who didn't know diddly about RE said the market wouldn't crash, etc. Even when stats showed prices fell by 20%, there were people yelling "THE MARKET IS NOT DOWN 20%"

Oh wait, that was alpo...

;-)

Seriously, not sure if I'd be trusting anyone who got it THAT wrong about the future direction of the market. They couldn't even see the biggest bubble of all time.

Actually it's not a bad market to buy and sell if your upgrading (and can afford to).
To sell an apt you paid 1mm for 800K is ok if you then go on to buy a 2mm apt for 1.6mm.
Of course, renting a year and waiting to pay 1.4mm would be better. :)

So whatta ya doing now choppy? renting?

It's interesting that all the posters so far look at buying a house as an investment. If choppy "lost" 20k, was he going to live in his car or sleep in his office the whole time? I would think there would be a cost attached to shelter for 3 and a half year, which for most people renting would have been closer to 200k. In that sense, choppy has done very well for himself.

wow, a lot of responses and even some that were non-attacking. I obviously had a mortgage, monthlies and taxes, but my carrying cost was actually about a few hundred less a month than what my unit rents for today. The tax abatement, a very low hybrid ARM rate and a 30% down payment made that possible. I acutally had it dual listed and had seen rental interest but the broker fee was a definite sticking point for most. If that 30% down had been in the market, unless it was all in Treasuries, it would have been down a decent bit as well, which I didn't include in my calculated savings.

the point of my post was not to say i'm a good market timer, far from it obviously. i have plenty of friends and co-workers who sold in '07 and are very happy with the decision as they made plenty of money. I had only been in my place for about 12-18 months when those people were getting out, and I felt like although I could turn a profit on a sale at that point where else was I going to live? I had stated in my original post that I didn't like the value presented in the rental market, so had no interest there, and I still wanted to live in the city and very much liked my apt, the building and the location.

As it turns out "the biggest bubble of all time" actually only cost me $20k of loss on my basis net of all transaction costs and factoring in the tax-shield (don't think that's stupid math, it's dollars and cents unlike pizza coupons and whatnot). THAT was the point of my post.

The wet blankets in my short time looking at this board, in my view, tend to be those that missed affordable ownership opportunities in years past, and even after all the tumult we've been through some of us (using myself as an example) were able to come out after buying close to the peak and selling after the dust settled without getting killed. Those who have been renting over the last decade are still holding out hope prices will fall another 20-30-40%, good luck with that. I have no horse in that race any longer, and those numbers are great dreams for those hoping to buy if the amount of space they need becomes affordable. I think you're just talking your own book though. Based on my easy selling experience as one data point, your dream of owning your own home will probably remain just that.

as for why i sold - it's time for the burbs, need more space and eventually going to have kids. we're renting a house for now but see some things we like on the market. Sellers in the close-in suburbs seem to be more aspirational than in the city though, have looked at places that have been on the market for 6 months without a single reduction in price and no offers. I think there's still some softening left to go, but if we found the perfect place for us I would not hesitate to make a very fair offer, even over what I think the true "value" of the home is in order to be in the exact house and location we are looking to be in for the next 10 years. To those looking to time the market and catch the absolute bottom -20% or more from now, best of luck. My personal and now unbiased opinion is that's a lottery ticket long shot.

FLMAO. Choppy, "the biggest bubble of all time" and you actually LOST money. OMFG, du u spkie the enzlish lnguage?

Choppy- Thanks for taking the time to post. GL!

"To those looking to time the market and catch the absolute bottom -20% or more from now, best of luck. My personal and now unbiased opinion is that's a lottery ticket long shot."

It's not a slamdunk that it will happen. Re recourse v. nonrecourse, in the '90s there were MANY Manhattan coops in foreclosure. Did something change since then re: recourse/nonrecourse?

To summarize Choppy's story: "Person with $300,000 buys condo, manages to only lose a little bit of money."

Actually Choppy's gross return was -7% ($20,000)/$300,000. Would have been much worse but for some insider games and tax breaks (all fair and good). Point also taken that the apartment was owner occupied, provided free rent. I feel that being able to beat a sponsor down on price and incentives until your apartment is cheaper then rent falls into the "one for the bears" column.

N.B. I'm a little leery of accepting Choppy's loss numbers at face value. You'll forgive me...I don't get the feeling that anyone on Wall Street knows how to or wants to accurately report their loses anymore.

nice viewpoint choppy. don't mind w67, he's a bit still addled from his papa firing him from the family real estate firm. possibly incompetence or one too many 16 year old girl acronyms via intra-company memos, but i'll bet on the former.

probly just a bit itchy for having flushed 5 years' of rent in waiting, most likely supported by boss pops out of pity.

where did the author of this article get these numbers? what does he consider a foreclosure? i know there's more than 8 foreclosures in manhattan and way more than 40 in brooklyn.

Gscully - I'm the author: I got the numbers off of property shark. To be clear, these numbers do NOT represent the total number of foreclosures ... rather a snapshot in time; this is because investors with whom we're working are looking NOW for foreclosed properties; they don't care about the cumulative picture, therefore.

The reason I went there to dig and even wrote the article is because of the Furman Center's big study that was quoted by everyone, noting how foreclosures in the city increased by 100% over the last decade (I'm misquoting here, but the gist is the same). There are so many clients we have who are just dying to scoop up foreclosed properties in prime areas, and that's just not the reality right now. I'm not even venturing in this post to discuss what will happen in the future, I just wanted to create perspective around foreclosures in the city.

Furthermore, foreclosures as per Property Shark are not the same as Lis Pendens (which is the pre-foreclosure stage). All of this is to say that these numbers do NOT reflect all distressed properties, rather those that are formally in the foreclosure stage/auction process.

I hope this is helpful.

"I would think there would be a cost attached to shelter for 3 and a half year, which for most people renting would have been closer to 200k."

"Point also taken that the apartment was owner occupied, provided free rent. "

So, there was 0 maintenance cost? 0 taxes? Yes, its free after you pay a bunch of money. ;-)

http://therealdeal.com/newyork/articles/new-manhattan-condos-see-rise-in-foreclosures

"All but two of those buildings (there are actually 11 on the list because of ties) are condos completed at the peak of the market"

I think that pretty much sums up the article.

Interesting article. Obviously, how many of those actually move through the foreclosure process will be telling, but that is a good start of information on this topic. Is there somewhere to find out how many were modified from the 1 year period?