Another bearish chart from Jonathan Miller

Prices haven't risen, therefore you cannot call this a base. A base is rounded and there's been no rise. This is a downtrend with a sideways consolidation. If you want to get fancy..it can break either way and you technically want to follow it in either direction. I am not convinced the technical analysis for real estate markets is relevant..but if we are going to use it, we should at least get it right. There has been no rise. There has been interest at this level...and strength (in demand, not price) is basically getting sold into right now...Hence the inventory. The market is more healthy now in terms of function...but price is the ultimate decider...and the price trend is down and it literally hasn't ticked up once. Its a deadlock for now... how many buyers are there at this price vs. how many sellers...the latter apparently is rising to the challenge of meeting the former right now.

I can't wait to see what the second half of the year will look like. What will drive sales then?...

I just realized why technical analysis is silly for this. You can
always buy more stock, but you can only buy one apartment. Current
buyers cannot add to their position on the way up.

the majority of people who received decent amounts of cash bonuses this year are the smae people that have been getting paid for the last 5 years. becuase of all the layoffs we have gotten down to a core of experienced people that have survived this far. that being said, a good amount of these people are already in the RE market. In orde for these people to trade up, they need another lower incom person to come into the market. the lower people arent there anymore. combine this with the fact that people are more inclined to save now, the market in ny opinion is definitely headed lower. of course thee will be some activity, but the down trend remains.

It's hard to really know what the market is "currently" doing. I note, though, that SE's Manhattan Condo Listings Snapshot, which shows current condo offering prices by type and price per square foot has remained soft so far this year.

Government purchase incentives will probably soon end. In addition, the Fed is expected to exit their massive mortgage backed securities purchase program soon which should put upward pressure on mortgage rates as spreads are at incredibly tight levels.

Interesting times.

To play devils advocate, a lot of wealth was created from 2004 to 2007. I still say this wealth is what is driving the current buying. We can see if it lasts. I agree that people's attitudes toward spending, for example locking in private school tuitions, has changed. Total bonuses are only about what was paid in 2000 and neglected in this is the hedge funds, which on average didn't even make back their 2008 water marks.

Rhino - Actually, more hedge funds did return above their high water mark than not in 2009 (which was the strongest year for hedge funds in a decade), and a bunch that are still under their water mark just reset the fee structure (which is comical, but nonetheless they did it).

http://money.cnn.com/2010/03/01/markets/thebuzz/index.htm

"Spending was up 0.5% from December even though incomes rose just 0.1%

More disturbing though is the fact that the savings rate, which had been above 4% for the past months, fell to 3.3%."

I don't know about that claim in the first sentence, or that most were successful in resetting such that they were able to pay out in 2010 for 2009. I'd be curious to see a quote that more covered 2008 losses than not.

w67thstreet
about 20 hours ago
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Miette.... let's cut the BULLS-IT. Up or down nyc re in 3 yrs?"

Funny when i asked on a separate thread for price predictions for jan 2011 i received this summary from W67:

w67thstreet
about 3 weeks ago
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Forget 2011. there are much more relevant data to NYC re.
1)When does fed stop 0%
2) what happens when new buyer tax credit dries up?
3) when does mkt to mkt apply to banks holding tons of helocs, and under morts?
4) will spring summer 10' be another leg down?
5) when does govt stop being 100% of all new debt origination?
6) when does rent stop droppping?
7) when does 3.5% down financings dry up?

Sorry moxie, but can't get you a $psf until at least 3 or 4 items from above become clear. It's like wanting to know your sat score bf you've even taken one practice exam.

I guess W67 has decided to cut right to the score and forget about the "practice exam"
Rhino on the other hand put his money where his mouth is and made some predictions.

Did I? I forgot. What did I say, down 10-15% in each of the next two years? The real estate market right now is like the Gap. It tries to sell at full price, then it cuts 20%, then it cuts another 10% and another 10%...until it clears the shelves. Finding buyers at each new price point shouldn't be a surprise... the question is always - is there enough. This new overhead supply says there are people who want out.

"inventory is rising because of increased demand. that is not bearish, it's bullish and what typically happens at market bottoms."

Yes, officially the dumbest thing I've heard since... well... perfitz.

For years the bulls didn't want you to look at prices, which were tanking... they kept saying "look at inventory"... then that tanked, and now... "sorry, we didn't mean that, we mean inventory is GREAT".

Jesus, when the bulls start arguing with their own "logic"....

urbandigs
9 days ago

More coming. 35 Bethune 2/3a will be over ask.

--
That is, until it comes back on the market:

http://streeteasy.com/nyc/sale/480676-condo-35-bethune-street-west-village-new-york
11/24/2009 Listed by Corcoran at $2,895,000.
11/25/2009 Listing is no longer available.
12/17/2009 Re-listed by Corcoran.
01/26/2010 Listing entered contract.
03/15/2010 Re-listed by Corcoran.
03/15/2010 Price increased by 7% to $3,100,000.

this was a multiple bidding situation, 4+ offers, my client bid on it and lost, and I was just told the winning bidder could NOT secure financing...you do the math. I wont comment further on it due to REBNY rules for active listings. Clearly you can see I did not make the story up though. Someone did bid over ask, signed contract for it, and then failed to close. For all intents and purposes, that bid was not real. Why didnt they get financing? Individual issue? Appraisal issue? Hmmmmmm....Still, it happened that way because my client (who bought somethine else since) was directly involved and it was and still one sign of the mini-euphoria from adjusted lower level that I see out there with buyers doing nutty things to get property

something seems wrong here. with 4+ offers, all 4 had financing contingencies?

UD: I respect your opinion, and I wasn't attempting to say that you were misrepresenting the situation in any way. I was simply pointing out that some of this bidding war activity is a bit overstated.

Now, the agent may be playing 11 dimensional superchess or have some other obscure strategy, but it seems to me there was a "bidding war" here that is not going to result in a sale.

This is actually a very interesting issue: here you have evidence of the market trying to go up, but since the money spigot has been turned off..... CAN'T. In the same way that the market over inflated because money was too easy, the market may have hit a glass ceiling if money is too tight. What may then happen is the market loses this momentum, and we all know what usually happens after that.

inventory just about to touch 8900. Highest point in months. Must be that darn January effect...
;-)

interesting 30yrs, absolutely! Or that the dynamics and emotions at play in the market today and in past few months is disconnected from appraisers who know have watchful eyes on them and a process that separates appraisals from lending institution to remove conflicts of interest...I still believe Manhattan is considered a declining market, meaning negative time adjustments on appraisals based on past similar comps analysis. Or was this changed recently?

8918.... we gonna hit 9 again?