home sales fall to lowest in four years

the crash is coming....

uh huh...

The crash WAS COMING in 04.

The crash WAS COMING in 05.

The crash WAS COMING in 06.

The crash WAS COMING in 07.

and now...

The crash IS COMING in 08...

(yaaaaawwwwwnnnnn....) meanwhile,

My condo went UP about 12% in 04.

My condo went UP about 12% in 05.

My condo went UP about 12% in 06.

My condo will go UP about 12% in 07.

Therefore, it'll be UP about 50%-60% in four years.

You still rentin' there, sport? Good job.

But Noah Rosenblatt says the Manhattan market will go down in price. He also says interest rates are rising after the they ran up and he says summer is bset time to buy a condo because the inventory will be at it's highest levels. I don't know about you but Noah is the best.

From a real estate perspective, Manhattan isn't part of the USA. This is the only town in these here United States in which both foreigners and domestics buy travel pads (except perhaps Miami). No one buys a second pad in Boise or Phoenix. Manhattan real estate is and has been an entity unto itself. Want proof? You can go to Fort Lee, new Jersey and get a 1 BR tomorrow for 185,000. Throw a rock across the river and that price doubles. It is what it is and foretelling some Mayan-esque crash ain't gonna change anything, bub.

#3-- I'd sell out if i were you.

My stock portfolio went up in '97
My stock portfolio went up in '98
My stock portfolio went up in '99
My stock portfolio went up in '00

It was up over 100% in 4 years. Therefore, it should have continued to go up, right?

#6 - The difference is that I didn't, like you would have (except I'm sure you're a bitter renter and don't own your own place, regardless).. That's why my net worth is in the upper 1% of the nation.

#7 -It sure doesn't prove that it'll go down, if that's what you're inferring.

Inventory at an all time high

http://calculatedrisk.blogspot.com/2007/06/more-on-may-existing-home-sales.html

# 9 Great Blog, and I agree with the fact that if Peoria ,Ill inventory is high so should be NYC's.

Sadly, #9, that's not the way it works. Inventory in NYC is not at an all time high - no where near it. And rental vacancies are at an all time low, >0.8%, and will tighten further.

asset allocation. don't put all your eggs in one basket. if you can afford to buy, but. real estate over time does well so does the stock market. if you have 5-7 years, you shouldn't lose money in real estate. 12% is long gone. we have been flat for almost 2 years. there is no rush to get back.

#12:

"...we have been flat almost 2 years..." - who's "we?" Some people in NYC yes. Some people in NYC are up 10%-20% from last year. There is no "we."

In the case of some friends of ours, they bought a 2 bed/2 bath in a new condo build about one year ago for $1,675,000 in the Village. The condo is (finally!) going to close in a few weeks. But my friends found out about six weeks ago that they're getting transferred to London. Fortunately for them, there was a clause in their purchase contract that stated if the building hadn't closed by June 1st, they could elect to be released from the contract and receive their 10% down payment back, which is what they did.

So the developers put the place back on the market (remember, it's still not finished yet, but it is very close to receiving its TCO from the DOB) and it went to contract in THREE DAYS for $1,975,000. Almost an 18% increse in one year.

There is no "we."

Flat #12?

What neighborhood are you in . . Peoria Heights?

Bought in Tribeca in 2005 for $1M; sold in 2007 for $1.4M

This debate will go on forever on these boards. The fact of the matter is that NYC RE is tied much closer to the global market than the U.S. market. Keep an eye on that.

#5 comment is right on. Drive 3 hours to Pennsylvania and you can buy a house for $200K on a block filled with desperate sellers. . . you can't buy a parking spot in NYC for that much and there will be a line down the street of people who want it.

Face it. The republic of Manhattan lives by its own financial rules. $25/hr parking, $18 drinks and a $40 hamburger.

viva manhattan!!!!!

#8-- Yes all who disagree with you are bitter renters. I sold my 1 BR in March for north of a 700% return on my cash and I am ever so bitter now. I bet your wife cannot stand you.

#16 - oh wow - you owned a one bedroom? All by yourself? Wow, you're such a player! Did you live in Inwood, Pelham, Bensonhust, Flushing, or Staten Island?

And now you ARE a renter! Good job!

And it's extra nice that you saw your way through to include my spouse in the discussion - very, very classy. But I suppose I should have expected as much from someone who's total net worth is less than my average after tax annual bonus.

NY Metro - down 1.5% YoY. Too many sellers are in denial.

http://standardandpoors.com/spf/pdf/index/062607_HomePrice.pdf

#13 - What's your point? I have friends who bought last year for 1.8M in the West Village and also had to relocate unexpectantly because of work and ended up *LOSING* money - had to sell for 1.7M.

There will always be exceptions, but the general trend is that prices are flat and going down. Before someone calls be a bitter renter - let me set the record straight - I am an owner.

Let's repeat that, please - NY "METRO" - "METRO"

Queens is NOT prime Manhattan.
Staten Island is NOT prime Manhattan.
Outer Brooklyn is NOT prime Manhattan.
The Bronx is NOT prime Manhattan.

Too many uninformed posters (like the one above) are ignorant (let alone in denial).

#19:

My point is that there is no "we." Your friends probably overpaid for a pile of crap and got hosed, as they should have. My friends wisely bought a place in a very desirable new build, and that place went up almost 18% in one year.

"We" have NOT been flat for two years, as poster 12 asserted. THAT'S my point.

And I agree with #20 - well said - discussing the overall trend of the NY Metro area is a joke. Talk about the trend in the Bronx, or talk about the trend in Staten Island, or talk about the trend in prime Manhattan. Lumping them all together and then expecting to be able to interpret any kind of worthwhile data is a joke.

Isn't "New York", Manhattan?

All the rest of the boroughs are for the plebes who sweep out my apartment and park my car.

The Kingdom of Manhattan is impervious to all!

Viva Manhattan! Viva Manhattan!!

So $13, all you've proved is your friends got lucky by having that clause in the contract. Now lets say they had closed on the place and were forced to sell. They may have gained 18%, but then subtract closing costs on both ends (probably a bit higher since they bought into a new development), brokers commission on the sell side, and also since they held onto the property less than 2 years, they got hit with the cap gains tax. What are you left with - easily less than 10%. S&P's gone up almost 19% the last year.

MOST people have seen little price appreciation in the last 12 months and chances of seeing the same price appreciation we've seen over the last 5 yrs (e.g. 100% gains) going forward are nearly zero.

You also have to look at how overvalued certain areas have gotten in the last couple of years. My friend kept moving to florida and back to ny and every time she sold a house, she made a profit of 100K in only a few months without trying. Certain areas like Florida, Vegas, etc experienced an over inflated value that wasn't real. Manhattan is not on Mars and is tanking like the rest of the county, although not at the same rate because apartments didn't double in value over the last 5 years like in Florida. I see signs of a crash but not as bad as in the recession of the 90s. If real estate is tanking all over the country, it is tanking in Manhattan as well. Just in a different way.

yada yada

Global RE markets are crashing too, look at the ETF that tracks them: http://finance.yahoo.com/q/bc?s=RWX&t=3m&l=on&z=m&q=l&c=

Wall Street bonuses may also be not quite so hot for many:

http://www.abcmoney.co.uk/news/27200793916.htm

And the subprime crisis increasingly looks not so "contained".

Manhattan was late to get on the current bubble and is late to start deflating, but if you have any doubts that it will deflate shortly, well, I guess you're entitled to your own opinion. Just watch your step when passing by the new condo popping up on your block.

# 26 Your articles have nothing to do with the doom and gloom you are wishing for. Keep renting and wishing though.

I'm still renting off the money I made selling in 2006 and will be doing so for about 10 years at the current price levels. Would I have made another 10% if I waited a year before selling? most likely. Can the market go up another 10%? not that likely, but maybe. I'm not in the business of timing bubbles and I know when to take my money.

#28 Sounds good to me...take your money and run. At least your not a bitter renter talking a lot of BS....you actually owned then sold while the getting was good! Your comment, although not favoring the buyers seems balanced and fair.

# 26, #28, and # 29 are all the same person. Kind of immature don't you think.

"A bubble is a boom until it bursts" - plagiarized by a not-bitter renter who also sold last year

#28 -

Good for you.

So in ten years, while I'm still paying a historically low interest rate 30 year fixed mortgage (6.25%) that I locked in about six weeks ago, you'll still be renting, and assuming a modest 3% per year rent increase over ten years, you'll be paying 34% more then than you are now for your rent - and you'll have zero equity to show for it. If we assume a 4% year rent increase you'll be paying almost 50% more for your rent in ten years (in NYC we could even reasonably figure a 5% annual increase, but I won't go there - you'd be reduced to tears). That alone will pretty much wipe out any after tax profits you might have figured on investing the proceeds from the sale of your joint.

Plus don't forget the fact that when you want to buy in 10 years, I'd be willing to bet that interest rates will not be at historic lows again - so you'll probably be paying 7.25% for a 30 year fixed mortgage (which is what they've jumped to in the past six weeks), or 8.25%, or more for that mortgage when you buy again, IF you can afford to buy again!

#32 Ok, you win. You made a great move. Buying now is up there with 1. Buying New York from the American Indians 2. Buying into the department store that became an insurance company that became Berkshire Hathaway. You are set for life.

#21, your friends should have closed and rented out the place if it is in prime GV.
Rents are very high for good quality large apts in prime areas.

2BR 1700 sqft in a building I know in tribeca rented last year for $12000 per month. GV may be silimar.

#34:

I agree with you - I think they should have done what you suggest as well. But they were leaving more or less permanently, I think, and couldn't be bothered.

The Manhattan market is not what it used to be but it is still doing quite well.