aaaaaaaaaaaaaaaaaaaaa

Rent now before your priced out forever!

well, i should say just get ready to pony up for product you didnt have to for the last year and a half.

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

Related puts back free months and offers 1 add'l month to renters that do not use borkers summer 10'!

actually, w67th, you don't know what the fuck you are talking about. related has indeed pulled BOTH the free month of rent and the op (industry jargon retard) in a couple of buildings.
this PROVES what i have been saying, and has been stated in the media:
vacancies are down
concessions dissappearing (slowly, but dissappearing)
rents will stabilize then climb

FRONT ROW SEATS FOR ALL THE LOSER KNOW IT ALL POSEURS ON STREETEASY

DON"T WORRY, YOU WON'T BE FIRST TO KNOW, BUT YOU WON'T BE THE LAST

jim, did someone email you from SE to stop posting under a million aliases?

The overall economy is at least stabilizing (ppl gotta eat, buy clothes etc)... now do you think this is a positive for NYC RE?

I'll let you think about that and get back to you.....

Oh and I'll let you have your industry jargon and professionalism based on 2 week coursework and $50 annual fee to RE BORKERS OF america...... but really think about it... is a recovering US real economy a net net benefit to nyc re?

Rents probably HAVE bottomed, which puts a floor on real estate. Anyone looking for 40% price drop is smoking crack. We'll be up a year from now.

What do we know for sure?

1) We've seen a recent bounce off the 2008 bottom.
2) History teaches us this can be a turn in the market, OR a "dead-cat bounce".
3) We're coming up on the spring selling season

Anyone who has worked in the markets knows one thing: at this stage of the cycle, we don't know where we are. We'll know more in 3-4 months.

I guess all those economic and political problems that rs likes to obsess over won't affect the price of his NYC real estate. not just a river in egypt.

actually Dwayne, we may know more in 3 months, but I'd personally go with three years (or maybe, depending, until a couple of months after the mid-terms). the housing market has been manipulated for decades but this has been going well above and beyond prior efforts.

you all like to write a lot without actually reading.
Related, a huge landlord, with tons of bright people working for them who look at data, etc has decided to revert to more normal market practice. they realize they don't have to give anything away to rent their apartments.
its a fact, not speculation. it had happened.
where one has gone, many others will follow

tons?

Related has a very small market presence for rentals, really.

sure....something along the lines of glenwood i'd say.

small cap landlord

"I guess all those economic and political problems that rs likes to obsess over won't affect the price of his NYC real estate. not just a river in egypt."

Yes, NYS/NYC running out of money will only INCREASE prices.

Bankrupt politicians will save us!

Which Related buildings exactly, jim?

"Related, a huge landlord, with tons of bright people working for them who look at data, etc has decided to revert to more normal market practice. they realize they don't have to give anything away to rent their apartments. its a fact, not speculation"

Really. Let me tell you another fact: In 2005, I was discussing a transaction with a private equity firm. They had just sunk millions into a company that was tied to the real estate industry in the southwest (Phoenix, Las Vegas, etc). And I said, "guys, when i look at the numbers, housing in the U.S. - and ESPECIALLY in the region you are talking about - seems ready for a tumble".

And these "bright people", all of whom had ivy league degrees and most of whom earned 7 figures, assured me they had studied the numbers and their would be NO -- let me repeat, ***NO*** real estate crash in the U.S. Especially in Phoenix.

I passed on the deal. Phoenix real estate lost about 65%. Now, i've dealt with real estate RENTAL firms for about 20 years. And I've dealt with private equity about 12 years. And, I'll bet you dollars to doughnuts, the "tons of bright people" at Related are not as bright as the "bright people"
at the PE firm who assured me real estate would never crash in the southwest in 2005.

AR, which river in Egypt?

Kind of sad. Jim Hones, why do you gloat over making renting more difficult in New York?

Too many people switching from owning to renting, eventually pushes up rental prices. Gotta love group think

Jim Jones is correct Related has a sizable rental presence in the city.

https://www.related.com/Rentals/Default.aspx

http://blogs.wsj.com/developments/2010/03/03/renters-poised-to-lose-their-upper-hand/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fdevelopments%2Ffeed+%28WSJ.com%3A+Developments+Blog%29

Renters–the ones with jobs anyway–have been having a good run the past year or so. But the party may be drawing to a close. The evidence, apartment operators are gearing up to build new rental units.

But already in Manhattan the days of mega-concessions seem to be seem to wrapping up, at least in the most desirable neighborhoods. In New York, Equity Residential, which has buildings on the Upper West Side, Chelsea, Murray Hill , the Financial District and elsewhere, said it has stopped paying broker fees for certain unit types. In better times tenants pay that fee, typically one month’s rent.

http://online.wsj.com/article/SB10001424052748704486504575097963485798970.html?mod=WSJ_Real+Estate_LeftTopNews

The gap between new and renewal leases has narrowed from about 10% nine months ago to about 5% today, a sign of confidence as landlords have to give up less to sign new tenants, Mr. St. Juste said.

Landlords also are excited about demand. The 20-to-34 age group, prime renting age, is expected to increase by five million in the next decade, according to Hessam Nadji, managing director of Marcus & Millichap, a real-state-investment brokerage firm. People who moved home or who bunked with roommates during the downturn also might ink leases as the economy improves.

jimhones is correct on Related, at least some of Related, though a smart renter can be aggressive about it, I'm reasonably certain. But Manhattan varies by neighborhood, even though somewhereelse wants to call Jim's bluff because he knows of a building where the opposite is the case, both can be true. Depends where we are talking about. Downtown might be removing incentives faster because more people have been moving downtown from the UES and Murray Hill.

Question on Equity Residential not paying a fee: is this if a prospective renter brings a broker, or is this for any renter where Equity requires a brokerage fee for their in house people (which I think is a bogus practice and should cause any renter looking on his own to just walk away). I feel strongly that if a renter brings a broker, he should pay his side, but all other circumstances the owner should be responsible for paying fees associated with marketing his apartment - that is the best way to align incentives and be sure that people get what they pay for.

pullikng free month and no fee has been going on for the last year...the LL's are testing the waters.

"Jim Jones is correct Related has a sizable rental presence in the city."

Jim Jones? Freudian slip?
http://en.wikipedia.org/wiki/Jim_Jones

Wow. How about a little, even a little analysis of those WSJ links:

a. the gap for lease renewals was 10% 9 months ago and 5% today. Considering that for a March 1 article, most 1 year leases would have been signed in January/February 2009, doesn't that mean they are in most cases 5% off whateveer concessions were made last year, after Lehman brothers collapsed and while the market was in free fall. On the other hand the 10% gap from last July was down from a lease signed in July 2008. In sum, the rate of decline for rental prices has slowed. That is about as stirring as the rate of job losses declining.

b. Rental builders are building more units for the future: "They’re betting that limited new supply, combined with an improving economy, will lead to ideal market conditions nationwide starting in 2011 or 2012." That means they are expecting an uptick somewhere between 9 to 21 months from now, not tomorrow, not today. The guy from M&M is talking about the next DECADE. So (provided their predictions are correct) it makes sense for developers to start now: "Given the multiyear construction window, companies have to start now to be ready in time."

The real summary of those two pieces should be: "Rents will go up at some point and some developers think it might be as early as next year so are starting to build now."

What I found interesting is to see developers making a decision not soley on DSCR, but on replacement cost. Sam Zell knows the market and if he can buy a building at 60% of reeplacemetn cost he's prepared to ride it out. Market has a tendency toward group think and judging the future by looking at the rear view mirror. Plus too many are prepared to announce with certainty their opinions without even knowing the market, like saying Related is a bit player.

It is telling how bothered aboutready and others like her get because the market hasn't crashed like she had hoped it would.

Equally telling is the giddiness expressed by those seeing a return to bidding wars and reduced rental concessions. Everything has gotten way too reactionary, instant, frenetic etc. What we need is some hysteresis in the real estate machine to stop the heat from going on and off 100 times an hour.

Someone did a poll on what the probability is of future price movements. It's interesting that so many like to base their opinions on some version of a normal distribution when price movements at least in finance tend to follow a non-normal fat tailed distribution. Getting back to rents, I can easily see why the experienced money believes rental prices will firm(that does not mean explode on the upside).

"It is telling how bothered aboutready and others like her get because the market hasn't crashed like she had hoped it would."

Uhhh, a 20% drop in rents is a crash. To put that number in perspective, rents make up 30% of CPI, and if the whole country's rents had dropped by 20%, that alone would have caused 6% deflation. Two years ago, I thought prices were stupid-high, but I didn't think rents would drop by a number that large. Yet here we are, and it has been a nice surprise / windfall for me really.

FTR, just as I didn't expect rents to fall 20% before, I don't actually think they're going to keep dropping, but I've been wrong before.

What we are probably seeing is partly explained by mean reversion. We went up too much and now we've gone down too much.

First, the bears had been predicting a 50-70% drop in prices. Second, you are referring to a 20% drop from peak, but that was a very short-lived peak. What was the average over a multi-year period compared to now?

The market has not crashed the way aboutready and others had hoped, and it disturbs them.

I have to disagree with INONADA A 20% decline is not a crash. 40%+ is a crash..

I guess the definition of crash depends on your view then. But the Los Angeles area was widely considered to have crashed in the 90s. It fell about 20%, but in real terms it was over 40%.

By the way, high point was late 1989. The bottom, or I should say the seventh bottom, was around 1997 and that came "two years after the first positive month to month reading".

http://themessthatgreenspanmade.blogspot.com/2009/07/1990s-los-angeles-housing-bottom.html

LICC, you've got to be kidding me? We r probably 35 to 40% off from peaky peak of 2007..... but whatevas?

Riversider, do you have two brains that you interchange when posting about political stuff vs. your own "home."? You point out post after post about the gov't feeble viagra shots to the RE mkt, the manipulations of all the politicians, the waste of tax credits, the crazy low low low Interest rates where you scan daily the CD rates from all corners of the earth to earn 5bps extra......and yet miraculously your nyc re apt is NOT NOT NEVER EVER GOING DOWN!!!! I'm sure you would've been one of those jews who said, as long as I keep turning in my neighbors the Germans will NOT kill me.

Oh back to how a "recovering" US economy would suck for nyc re. It provides cover for Bernie to start raising rates. Now when rates are going down and staying there, bankers (wall street) is your best friend. BTW the debt markets is a log fold larger than the equity mkt. The true bread and butter of wall street is swapping out of high interest debt to low interest debt. Also M&A thrives in low interest rate environment when ppl are willing to take risk to gain yield, usually by touting "efficiencies".. (highly dubious in my book, nonetheless every captain of industry says, combined SG&A goes down 20%!).....

The mechanism by which the velocity of money decreases is higher interest rates. Just think, if someone is paying you 10% on your cash, every time it hits your bank, you try to keep it in there for an extra day.... every item you buy, things "cost" more as the lost interest income becomes more "meaningful." Now in the go go 2001-2007, the interest rate by virtue of the "leverage capital" gain touted by the RE whores never got parked for more than a millisecond bf it was lent out to the greater fool.

Now regular ppl got nowhere to put their money. RE is in the shitter, equity mkt's already 60% up from lows.... so ppl will park their money in banks and cd's when interest rate rises.

Given all of the above:
1) less transaction volume in debt mkts, equity mkts, and M&A => crappier bonuses going forward
2) hoarding of cash, less money on consumption of good and housing.
3) less transactions in general.

Yes, the "I feel more secure in my job" bankers and jobs in general will lead some to higher consumption for some ppl, but my guess is that they've already shot their wad. It's not like crispy cream donuts... you need to buy housing every day.

does anyone talk to anyone that is not working on wall street? rents have gone down because demand for rentals has gone down. there are more rentals coming on line with no more demand in sight from anywhere. there is a $9 billion budget gap in the new york state budget. and on and on. very productive to debate whether a 20% reduction counts as a crash or an adjustment?

w67. This started out as a discussion on NYC Rental. I agree with Malthus about Los Angeles. California , Michigan, Florida, Arizona, Nevada are far worse off than NY. We're down 20% (rents and/or prices). Gov't actions to stabilize will wind up being very ineffective considering the money spent. In Manhattan if I had to speculate I'd say we'll be flat to up marginally over the next year or two. Downside risk of owning is small. And with a huge change in prefrence toward renting, I'd say the risk of seeing rents go back up is something renters should think about.

Here's another possibility...The RE market here in the city remains soft and sluggish for the foreseeable future. It just doesn't not re-ignite. The city suffers from reduced services and ever increasing taxes. The desirability for city life tarnishes and we have reducing populations of high income earners. The most recent 'crash' if nothing else, has reduced the number of high paying Wall street type jobs that take place here in the city. NJ and Conn have absorbed a fair number as has other parts of the country. The double edged sword of technology is the reduced need to be physically present. So what's that other industry that we have here in town that provides substantial tax revenue?
No, it's not hair dressers, nope...not fashion...tech?...nope. THERE IS NONE!
Golden Goose? DEAD!
Welcome to our new reality.
Sucks for me too.

doesn't re-ignite

"I have to disagree with INONADA A 20% decline is not a crash. 40%+ is a crash.."

Let's put some historical perspective on your statement. The people running monetary policy in this country look to two things: unemployment and inflation. In looking at inflation, the index they consider most is CPI (consumer price index), and rents make up 30% of this index. Unlike changes in asset prices (i.e., home prices), changes in rents are consided inflationary / deflationary, and the Fed will react firmly to changes as small as 1-2% in this index.

The 20% decline in rents amounts to 20% deflation. You're saying "that's nothing, wake me up when we see 40% deflation". Do you realize that peak-to-trough during the Great Depression, deflation "only" amounted to 27%?

So by your definition, even the deflation during the Great Depression did not represent a crash.

Actually, I can tell you with a fair degree of certainty that what they are watching now are CDS spreads. They are glued to them and view them as the first predictor of systemic risk.

What? They certainly don't look at CDS spreads when determining INFLATION! Boy, your paranoid delusions are creeping into all the threads.

CDS spreads tell you nothing about systematic risk per se, unless its CDS spreads on a systmatically important entity. But that tells you nothing more than a plunge in stock prices or large change in interest demanded buy potential bondholders. Nothing whatsoever to do with what inonada just wrote.

The investment banking industry, and the desire for city living are not dead. Period.

more debate about the name? it doesn't matter.

What? They certainly don't look at CDS spreads when determining INFLATION! Boy, your paranoid delusions are creeping into all the threads.

Relax sparky. They are looking at credit default swaps, because inflation is not a bogeyman for them the moment.

inonada
about 5 hours ago
ignore this person
report abuse "It is telling how bothered aboutready and others like her get because the market hasn't crashed like she had hoped it would."

Uhhh, a 20% drop in rents is a crash. To put that number in perspective, rents make up 30% of CPI, and if the whole country's rents had dropped by 20%, that alone would have caused 6% deflation. Two years ago, I thought prices were stupid-high, but I didn't think rents would drop by a number that large. Yet here we are, and it has been a nice surprise / windfall for me really.

FTR, just as I didn't expect rents to fall 20% before, I don't actually think they're going to keep dropping, but I've been wrong before.

hope for your case you signed a two year lease and that you have saved your "windfall". next one won't be so affordable.

is there something new here? what the hell is point of copy and paste?

"The 20% decline in rents amounts to 20% deflation."

No it doesn't. 20% decline in rents is based on many things, like job loss and lack of hiring in NYC. Very different than "deflation". So of it is deflation but not all of it.

"We r probably 35 to 40% off from peaky peak of 2007..... but whatevas? "

That's wrong w67th. The latest Miller Samuel chart clearly shows 25% off of 2008 and 15% off of 2007. Don't you ever check your facts?

how is a 20% reduction in rent not deflation?

JM, of course the 20% deflation in NYC rents is but a fraction of nationwide CPI. I was making that point in response to "a 20% drop in rents is normal" attitude from RS. But to CC's point, you can call it whatever you want, I suppose.

Don't let facts get in the way of a good discussion, esp when the other side had a state your income loan docs. Yes, there were actually forms that stated on top in bold print 'stated income form'

Flmao. Welcome back juicy.

And as to 35% off, sam miller is average #s, so I assume there are most definitely outliers that got traded at peaky peak and then traded in the last 12 months at 35% even 40% off. Just sayin.

"hope for your case you signed a two year lease and that you have saved your "windfall". next one won't be so affordable."

Maybe, but even a 25% increase to get it back up to where it was before the 20% drop isn't a whole lot to me. Rent increases are probably not even in the top 10 of risk sources that might cost me the most money next year. I am bemused, however, by the certainty with which you proclaim what'll happen in the next 6 months.

Nevertheless, I agree with your sentiment of locking in a multi-year price, though I wouldn't do it without one-sided options to terminate the lease personally. Back when I was looking, I negotiated 2- and 3-year leases at set prices on a couple of places with the option for me to terminate with 60-day notice. In the end, however, I stayed at my old place with a 20% rent reduction and a 1-year lease because the new places did not excite me enough to overcome inertia once the prices were all in line with each other on a relative basis. With my current place, asking for a multi-year with exclusive option to terminate on top of a 20% reduction from a prior 1-year lease seemed a bit excessive, even for me.

actually, given all the governmental support, i'm surprised the market isn't doing better. as i've said repeatedly. trillions of dollars and it's still falling.

as CC points out, current state deficit is $9 billion. but maybe the gov't will print some more and another bail out will occur. saved today, screwed further tomorrow.

JM, major deflation. and the miller samuel chart, i believe (although i haven't checked my facts) doesn't account for incentives. so the numbers are actually greater.

w67 didn't the crash she was hoping for, so she just makes it up and says she did.

You can predict the a crash all you want. At some point the rational thing to do is ask why it didn't occur and move on.

or better yet...just pretend that it didn't happen and keep manufacturing excuses as the situation continues to worsen. there is still no evidence other than jim hones et al that rents are not continuing to go down.

correction: w67 didn't get the crash she was hoping for, so she just makes it up and says she did.

1. w67 is male
2. he is not hoping for a crash -- he is reporting on one in process
3. how can you assert with a straight face that we are not still in the midst of massive economic upheaval?

RS & LIC, which crash or non-crash are we discussing here? NYC RE rents? NYC RE prices? Stock market? Economy? Employment? Or something else?

Was there a crash or an adjustment?

"Flmao. Welcome back juicy."

Thanks w67th. I posted a picture of what I envisioned you to look like in the streeteasy meet-up thread a couple weeks ago. Not sure you noticed it, but it has to be pretty close.

Didn't catch it, but I'm thinking it wasn't a girlie pic ; )

Thank you CC and welcome back again.

@LICC, what r u 5? Putting down someone by swapping their gender... is that how you make fun of your mama?

And to ALL THE POSTERS who think the NYC RE is no longer going down... plz do me a favor and buy some more... beyond all reason the 3.5% down loans are still out there and IR continues to be at historical lows.... I mean itz like crsipy creme donuts as it rolls out of the frosting machine.... just grab in fistfulls and knock them down.... so so yummy going down.... but too much and you'll get man-boobs like LICC and Riversider...

anyone do a little homework here and figure out that where they have stopped offering free rent, etc?

Yes Jim, you are referring to Related. But the key word in your sentence is "offered". I know of a lease signed in a Related building THIS VERY WEEK negotiated down on listing price and with a free month.

It is true that landlords of established higher-end buildings are testing raising prices and removing incentives. I don't know if this is all areas of approx. below 96th Street Manhattan. And again, I'm referring to better buildings that have been around longer than just a few years.

Therefore, there are two things that can work for renters. The first is self-knowledge of the market and a willingness to negotiate or walk. And the second is having a _good_ broker who will provide that knowledge and offer strong negotiations with the landlords.

I'm no basher of brokers, but you have to justify your own worth to your clients. So instead of just explaining how the market is going against the renter and gloating for some unknown reason, why don't you prove your worth and illustrate the value you provide, e.g. that you could get a free month from a landlord who has otherwise removed that offer?

The barrier to entry in your profession isn't high. But the barrier to distinguishing yourself as a top broker is high. So, why don't you do that?

Jim, any contradiction?