Subprime Mortgage Collaps

It affects Queens, the Bronx, Brooklyn, and Staten Island - and parts of Manhattan north of 96th Street.

In Manhattan, south of 96th, where there were a grand total of five (5) forclosures last year, the subprime situation means nothing. A massive world recession, yes. A U.S. subprime collapse, no.

The effect on Manhattan, if any, will be via hedge fund losses and smaller wall street bonuses on demand for real estate, rather than via any distressed sub-prime homeowners needing to sell. In other words, it tis the repercussions on financial market returns that will matter.

#2--- i think you're utterly missing the point. of course manhattanite are not mortgagees on subprimes. what i was referring to is the collapse of the secondary market for subprime paper, which potentially affects every hedge fund, possible mutual funds, institutional investors and the like. the affects of the collapse of the market could trickle to owners and buyers in nyc as these are the primary players in a lot of this shit.

What percentage of Wall Street activity has anything to do with subprime-based CMOs? I'm not very good at scientific notation, so I can't really express a small enough guess at the percentage.

#5--enough to tank 3 hedge funds and counting. true problem is no one knows who holds this stuff and how much. some guys wont' step forward unless they absolutely have to. reminds me of S&L circa 80s.

CNN had a report that realors are not telling the truth for fear of a collapse of the market in the country INCLUDING MANHATTAN.

And enough to tank even more than 3 hedge funds - as CDOs (/w and /wo subprime exposure) could suffer collateral damage - pun intended - whether market driven or politically driven. This could also be the trigger that finally puts the nail in the coffin of the relentless and often cavalier search for yield thus affecting demand for all risky paper, which would mean a slow down in the largest credit expansion in recent corporate history. And so down the drain will go fixed income bonuses, hedge fund bonuses, investment banking bonuses, private equity bonuses and finally equity bonuses. Which definitely will affect NYC real estate - below and above 96th street.

But that is a worst case scenario - that likely has a less than 10% probability of occurring. But throw in one more high profile blow up and that probability must be trending up.

this cannot be helping us people who are looking to buy a house in queens. should i bail?
or wait for more "downturnage?"
and the interest rates, which way do you think they'll turn in the next couple of months?

Definitely up ....until they go down, that is.

No, but seriously, I think they'll go up, but far too little too late. Someone has to pay for the last 6 years, and unfortunately its going to be me....and you....and you.

there's reportedly over $2 trillion, yes trillion in subprime paper held across hedge funds, et. al. If you people think this mess will not hurt all of our bottom lines you are sorely, sorely mistaken. Will it be a Mayan-esqu end of days? No. Will it tank the real estate market in NYC. Probably not, but in the short term it could certainly cause a double digit decline. If the hedge funds continue to collapse under this and have to pay back angry investors, bye bye bonuses, bye bye NYC pied a terres, bye bye real estate boom...and that would be for a while. See late 1980s. Of course it will come back eventually, it always has in the past.

#11 How long do you think it would take for the real estate market to make it's come back, should the NYC market get hit?