Today starts the official DOWNFALL

Let's say the Manhattan RE drops. There are still a lot of people on the sidelines looking to jump in and will snatch up the good deals. These people have a lot of cash and can afford the higher mortgage rates.

2babes #98...seems as if #95 vs. #1 have very different screen-names. HimWhoKnows vs. HimmWhoKnows are complete different IDs. Apparently you don't pay close attention to detail so you do not throw us all off.

I'm betting with #1, the OP that were are in for a downfall. The markets in asia are down big into their monday openings.

This week will be very interesting on Wall Street.

Once psychology of the local market shifts to a more consistent tone with the rest of the nation, it will also affect the sideline buyers. These buyers are already trigger-weary, which is why they are on the sidelines. A downturn will affect their psychology and make them even more prudent, so as to not catch the proverbial falling knife.

Okay, so we're all still sitting around waiting for HimWhoKnows, (or Goldster) to simply put their money where their mouth is and take the bet.

#102 NotAnonymous, I agree completely. Also these people will act as a safety net and prevent any drastic decline.

FYI/FYR..... http://money.cnn.com/2007/07/30/markets/sloan_drop.fortune/index.htm?cnn=yes

I'm one of those people on the sidelines looking to get (back) in, but sellers who weren't saavy enough to sell at the highpoint are still clinging to their unrealistic expectations so its still a standoff. I'm happy to rent in the interim.

Man - I've been looking for a condo over the last couple of weeks and have my hopes slashed and dashed! I'm seriously thinking of renting until the dust settles. Any thoughts from the rest of you pro's?

Can someone honestly tell me that my recently purchased 6% 30 yr fixed $500k luxury 1BR condo in Carroll Gardens is going to lose value if I sit on it for 5 years? Puh-Lease! We're not going to see the same rapid appreciation of the last 4-5, but I'm sure I won't lose either. Real estate is much like poker: you certainly need balls, the skill to understand math/odds, some luck, and the ability to time your moves accordingly. Absorbing all of the information of a weak dollar, sub-prime meltdown, pending election year, “terror” paranoia, etc will just lead to paralysis by analysis. Do your homework and you’ll be fine, but if you're on the sidelines, you most probably will end up short-stacked in the end.

If you already bought a condo to live in don't sweat it. However, if you are like me, looking to buy and see these apts going down daily, it's kind of preventing me from buying because I am afraid to buy something and watch it tank a few mos after I buy it.

You bought a 1BR in Brooklyn for $500k? you know it costs maybe $120k to build one (including the cost of land), right?

Just to let everyone on those board know that the OP has left the majority of messages on this board under many different screen names (ie HimWhoknows,Goldster,Zizizi) just to name a few. I am quite surprises Streetteasy has not banned this jackass from blogging all over the board with about a dozen or so screen names.

spunky dear, please don't make false accusations. If you bothered to read you'd see that I was the one suggesting the OP had multiple names. That I agree with him about the future of the economy does not mean we're one and the same.

HimWhoKnows> Issues new warning. Equity markets up today, tomorrow you will see a sell-off.
Also, let me remind everyone that the FED is not done raising interest rates. You all will see the DOW below 13,100 within the next 30 days.

HimWhoKnows - what a ridiculous name. For a start, why did you not choose the more grammatically correct 'HeWhoKnows'? Secondly, given the market volatility, it seems almost certain that the Dow will hit 13,100 at some point in the next 30 days. Just as it is equally likely to hit 13,800. A prediction of this nature is basically useless.

Furthermore, you have NO IDEA what the Fed will do over the next 12 months. And if you understood anything about Fed policy, you would realise that the FOMC do not target the value of the dollar, as you suggested in your original post. It is pretty obvious that you are an amateur in matters both economic and financial, and the only thing more tedious than your ramblings is the fact that others on this board appear to take you seriously.

curious007 i'm with you. ziziziz is just waiting to find his dream home in the clearance dept of Macys. Keep dreaming baby!

Don't worry, a year from now we'll all be thinking about the current prices and laughing. Of course, I won't be able to know you're laughing because they'll have repoed your computer by then and you'll be living on the corner of Spring and The Bowery (and I do literally mean *on* the corner), but do keep on the good spirit.

And with the Dow craptacularly dropping to 13,211 at the close, the 13,100 bet seems far more likely now than the 13,800 bet.

Still waiting for the split personality OP to simply put their money where their mouth is and take the bet.

Chickenshit.

#120-- I'll make a bet. That you cannot go another day without posting challenges for some anonymous schmuck to bet you.

Why so angry, #2/120?

oh no ziziziz you got it all wrong...i'll be ok honey, either way...I'll be OK! And you will be looking in the clearance section for your dream home. Poor soul...

People who bought at the crazy high prices are nervous and everyone else (like me) are just confused on whether to buy or rent.

Julia, I didn't mean to start this thread to draw up controversy. I simply started it to give a warning to the financial and real estate markets.

At this point I regret having started the post to some extent. I've gotten horrible feedback..It's been a little over 1 week and the Dow has gone nearly dropped 1,000 points
since my post.

I urge all to take into consideration my remarks. I don't post for controversey, I post to assist.

Best,

J

HimWhoKnows...where do I put my money? If not equities or real estate what do you advise?

Julia is also another screen name for the OP. This is so stupid it's making me barf.

Please, please, please don't tell me that anyone actually believes that this guy knows any thing. Take a look at these boards. Every week someone has posted the same thing more or less. Eventually you will be right ("even a broken clock is right twice a day").

Julia -- if you are taking advice from a message board, you need some help. This person could be a kid, lunatic, or unemployed housewife in Des Moines.

Talk to a professional. Get real assistance.

OP--Dow still even after this correction is up 20% since last August. seems your post was addressed to the r.e. markets, not the Dow anyway. You predicted a correction. Congratulations. Now will the Yankees make the playoffs this year?

I listen to professionals on financial shows and the majority keep saying hold off because prices are going down, eventually that will probably include Manhattan.

In OP speak .. . .

"There is a good chance that the Yankees definitely may not possibly come close to nearly missing the playoffs by 15% in the next six months."

Oh, and there is a .00001% chance that I will be the coolest kid in Edison HS and date the prom queen!

I'd like to refer back to 2001-2002 when everyone was screaming SELL SELL SELL the stock market AFTER the drop... and now six years later it was obvious you should have been buying buying buying.

Yes, and everyone who was CATCHING CATCHING CATCHING the falling knives were buying WCOM, LU, SUNW, WMT, DAL, YHOO, ENE, TXN

You proved my point zizizi. When people were catching knives, the media was still saying "Buy high, sell higher."

In 2002, CNBC, media and everyone was saying SELL SELL SELL... run for your lives, take your losses, wow i got burned. If you bought the S&P 500 in 2002 (when people were still bailing and sour), you would have doubled your money. (Not to mention stocks like AAPL) Even Yahoo has doubled since 2002.

What does that mean? Make your own call but I remain extremely skeptical of what is said on TV, in the papers, on CNBC, etc. Heck, even the fed. They are all reporting after the fact.

You should be even more skeptical of what is said on message boards because its very likely people like the OP and zizizi are heavily short housing stocks/real estate and are trying to manipulate their positions.

Spaceboy ... I think it is very likely that OP and zizi are college students in Nebraska who watch too much cnbc inbetween Big Mac runs and econ 202 . . .

marzknyc, is that a Polish name? Do you pronounce it like moron? are you the same markznyc who posts on curbed and other boards and claims he's not a broker?

Not a broker just a guy sick of the retards like you who post ridiculous "sky is falling" statements on boards to generate responses from people liek me (who fall for it every time). Started with $100K apartment 7 years ago, flipped a few, and now own a $2M unit, so no expert, but doing pretty well. Been living in the city for 15 years , work in tech and am admittedly a big cheerleader for the city. So -- that's me. You . . . who knows?

BTW -- nice 1975-era ethnic slam. I am sure that this "moron" could buy and sell you all day long.

#137. Sweet job. I bought in 2004 when jerks were saying don't buy and made a sick return on my down payment--like 700%. I opted to rent but will buy again shortly--more for the ownership feeling than for a belief that market will go up 30% a year (which it won't).

i agree with spaceboy. these julia, zizi, yogi, boo boo names are one in the same. Guys, You'd better spend your time at the beach than downtalking r.e. on this thing.

I don't know about the others but I can tell you this - zizizi and Julia are NOT the same posters - go back and read their posts - two entirely different energies coming through.

just found this as the top headline of bloomberg.com

http://www.bloomberg.com/apps/news?pid=20601087&sid=alZXe8Konu6w&refer=home

this isn't new, this guys been saying this recently, thing is he's talking about housing in America, even if he's right, how this affects Manhattan, who's to say.

News: Wall Street earnings tank
Broker: Bonuses don't matter that much anyway

News: Wall Street earnings strong
Broker: Bonuses will keep manhattan market strong

News: Dollar strong
Broker: Imports are cheap, so people can pay more for housing

News: Dollar weak
Broker: Foreigners will keep manhattan market strong

News: Subprime market crashed and burned
Broker: Doesn't touch manhattan

News: Alt-A market crashed and burned
Broker: (fingers in ears) *I CANT HEAR YOU*

News: Inflation up
Broker: Real estate will keep up, renters screwed

News: Inflation down
Broker: Fed will lower and mortgages will become cheaper, good for the manhattan market

All news is good news to a broker.

The same exact way that you use whatever lame facts you have at hand to prop up your own desperate assertions.

And when you say lame you mean true, yes?

Bond turmoil worse than Internet bubble: Bear CFO
Friday August 3, 2:50 pm ET

NEW YORK (Reuters) - Bond market turmoil sending investors fleeing from risk may be a worse predicament than the 1980s stock market fall and Internet bubble burst, Bear Stearns Chief Financial Officer Sam Molinaro said on Friday.
"These times are pretty significant in the fixed income market," Molinaro said on a conference call with analysts. "It's as been as bad as I've seen it in 22 years. The fixed income market environment we've seen in the last eight weeks has been pretty extreme."

"So, yes, we would make that comparison" to market events that also include the debt crisis of the late 1990s, he said.

zizizi it all remains to be seen. This is just one guy's opinion. He might be Street savvy but there are lots of 'experts' out there and you STILL never know how Wall St. will affect the RE market.

Whatever happened in the late 1990's, the RE market bounced back nicely. Or maybe it's doom & gloom. Who knows? Get a life.

Does anybody here work on Wall Street and have a sense of where bonuses are headed this year?

Regarding post #142, the same could be said about your negativity too.
The naysayers always have an excuse (see the past six years) on why the Manhattan market is going to get cut in half.

You supporting your arguments with media articles is completely useless. For every one of these, I can google a news article that said "Manhattan real estate can't go up anymore" from 2003,2004,2005, etc. as well as articles that said "Sell Sell Sell your stocks" in 2001, 2002,2003, etc.

It would be interesting to see those articles you mention. I doubt you'll find anything equivalent to the current statements being made starting around June 20th and the systemic meltdown of fixed income markets. I will admit to thinking we've peaked 2 years ago, but right now it seems fairly certain that we have. I got it wrong by 20%, the poor souls who are still buying are getting it wrong by a heckuva lot more.

mrsbuffet -- Regarding bonuses, I think some banks are not too affected and are likely to come close to last year's numbers, but others are already talking about "capital preservation mode" and "freeze in LBOs" and other expressions that mean "dear employees, start looking for a new job". We'll see how this plays out.

http://finance.yahoo.com/q/bc?s=AHM&t=1y
http://finance.yahoo.com/q/bc?s=BSC&t=1y

Ok I spent ten minutes, here are some...
When I bought my place in 2003-2004, everyone told me I was an idiot. The bubble talk was already in place. I know because I second guessed myself for a while.

http://edition.cnn.com/2002/BUSINESS/asia/06/22/wallst.close/index.html
http://money.cnn.com/2002/09/24/pf/investing/q_haventsold/index.htm
http://www.pbs.org/newshour/extra/features/july-dec02/corporate.html

http://nyhousingbubble.blogspot.com/
http://www.iht.com/articles/2005/10/04/business/homes.php
http://findarticles.com/p/articles/mi_m3601/is_28_49/ai_100914746/pg_1

http://nyhousingbubble.blogspot.com/
http://www.iht.com/articles/2005/10/04/business/homes.php
http://findarticles.com/p/articles/mi_m3601/is_28_49/ai_100914746/pg_1

Wall Street confidential prospective bonus for the year 2007: Merrill Lynch 230% of the base annual salary, HSBC 255%, Goldman Sachs 285%, Lehman Brothers 325%, Morgan Stanley 330%, JPMorgan and Chase 345%, Smith Barney 355%, ING 365%, Barclays 375%, Credit Suisse 395%, Nomura 410%, Wells Fargo 425%, Wachovia 450%, A.G. Edwards 485%.

Eh? Are you talking VP level?

For all those who think that Manhattan real estate prices can't crash -- when I got married in 1990, my husband's one bedroom apartment on CPW and 106 was worth 40% less than what he paid for it in 1987 (which was the peak of the last real estate boom). I bought a one bedroom in 1989 (when the market was just beginning to soften) and we sold that in 1995 for a 15% loss. And it took a few more years after 1995 for the Manhattan real estate market to recover.

I'm not predicting a crash, or saying that the crash is definitely coming -- I'm just saying that it has happened before and it could happen again.

#154 you are absolutely correct...I believe the people who bought at very high prices are in denial. Front page of NYT talks about Wall Street now saying the market is going to have a hard time next year. I am also not hoping for a crash that helps no one but reality is arriving and I am sure a 10-15% correction is heading our way.

spaceboy -- actually many of these links were absolutely correct:

ny peaking - indeed, the case shiller index hasn't risen since 2005 and there were many months in 2005 where you just couldn't sell anything. That we got some extra hot air for the past year is nice for owners, but not for current purchasers.

too much inventory building up - as we can see across the nation now...

renting cheaper than buying - still is - unless you did very well flipping, owning is 2.5-3.5 times more expensive than renting.

But none of them is talking about the explicit reasons that we're seeing now in the credit markets. Wait a couple of months until some of the other "special" accounting practices blow up. (hint -- when a mortgage owner has a defaulted mortgage, what do you think they put on the books as the recovery rate?)

Technically the stock market links were correct also... in scaring you out of the market... only to look back five years later and say "Doah!" I'm not giving any advice except be skeptical of the media. If they were so good, they wouldn't be reporting the news or writing articles, they would be retired. Nuff said.

Who knows what will happen to Manhattan... all I know is, there's a ton of people still on the sidelines who have been renting for years and now looking at renting for more years and growing frustrated. As long as that continues to be the case, I don't see that doom and gloom.

Who knows what will happen to Manhattan... all I know is, there's a ton of people still on the sidelines who have been renting for years and now looking at renting for more years and growing frustrated. As long as that continues to be the case, I don't see that doom and gloom.

Judging by these posts, many of you people have no idea of what's been going on in the debt markets for the past 2 weeks.

The statement by Bear Stearn's CFO is not to be taken lightly- this systemic crisis in the debt markets is of historic proportions, dwarfing the S&L and LTCM crises from the 80s and 90s.

And it's begun to unravel at lightning speed. The pace is quite amazing.

Many people in Wall Street will lose their jobs. In fact, it's already occurring. Many of my friends working in the MBS area, even in the commercial real-estate sector haven't been working since last week. For example, Morgan Stanley has simply just stopped issuances. Same for many other Banks.

The whole system is simply 'stalled' for lack of better words. It will take a few more weeks, and even months for you people to see how bad it really is. People in the Wall Street trenches right now know how bad it has gotten is such a short time.

Hence the comment from the CFO of Bear Stearns, and the resounding acknowledgement by the markets and evidenced by the plunge to -280 in the last half hour of trading after the comment was made public.

In other words, we are at the beginning of a systemic episode of a larger scale than the 90's Asian Currency Crisis/LTCM or 80's S&L Crisis. Look out!

Basically, the risk of downside to the Manhattan market is greater than the chances prices are going to appreciate at sustained levels. This already true with COOPs as their prices have gone down, and will be true with CONDOS (supported by foreign investors/buyers who can't pass COOP boards) once Carry-Trades unwind and the Dollar strengthens.

MMAfia

In order for manhattan prices to drop substantially, there would have to be significant job losses across the board. I'm not speaking about just mortgage brokers brokers but also banks, traders, etc, since those people are more than willing to jump in and buy for a small drop in prices. When everyone loses their jobs or they see their fellow sitting next them to lose theirs, then and only then, will prices start falling.

No, bankers and traders aren't idiots and will wait until the drop isn't that small. Remember that you're looking at properties that need to go 40-50% down to reach fair value.

"I'm not speaking about just mortgage brokers brokers but also banks, traders, etc, since those people are more than willing to jump in and buy for a small drop in prices."

There are many on Wall Street who will either lose their jobs or see their bonus payout shrink dramatically this year.

Hedge Funds, Private Equity Firms -> many will blow up (ala Bear Stearns) or lose a lot of value due to risky, over-levered investment strategies and the continuing LBO collapse

Investment Banks / Brokers - again, exposure to Funds and involvement in the LBO/credit scheme will dramatically reduce profits (Morgan Stanley, Bear Stearns, etc. stock all down well into the double-digits already, with much more ARM reset yet to come!)

and of course, those directly involved with Mortgage Backed Securities... aka the Secondary Mortgage market.

Things are in panic mode- for example, Wells Fargo raised their 30year Jumbo loan rate from 6-7/8% to 8% OVERNIGHT!!! Holy cow, that's gotta be a shock to those who didn't lock in rates!! and Well Fargo is the biggest 30yr Jumbo dealer in the entire country!!!

http://www.cnbc.com/id/20107397

Like I said, mainstream America simply has no clue- we are in MeltDown mode in the Credit markets. Once mainstream catches on, Watch Out!

Good luck,

MMAfia

So why don't you guys bet,....

Bet on what? the price of Manhattan real estate? there's a place to do that already on the CME Housing Futures market based on the Case-Shiller's index.

if you are referring to pay-pal bets online, that's not my cup of tea. might be for others who need to prove a point or get satisfaction at the expense of someone else who posted on this thread.

MMAfia

it's just the start of a long, hard, and challenging year. The sub-prime fiasco is a disaster just starting to unfold. Lenders, homebuilders and perhaps even one of the countries largest Banks will file for chapter 11 before the dust settles.

As many as 30% of hedge funds will likely close as well. Get a truthful broker to come on here and say the picture is shining. Honestly, brokers need to make a living, it's like the guys on Wall Street trying to sell customers Yahoo at 120, a week later at 110, then 105, then 90, all the way down to 14. It's fair to say a 1 BR in Manhattan will probably be attainable between 300-400K after it's all said and done. A studio? 250K. Brokers need to make a living, to say Manhattan won't feel the aftermath...forget it. Also Europeans won't flood the market because real estate turbulance is insight from England, Spain, France and Denmark. Lending euros is becoming expensive as the ECB continues to hike rates. Considering most emerging markets depend on low IR, they will be hurt as well. It's possible we'll have a global recession in 08.

My bet is the U.S. will be in a recession in November 2008 going into the 08' elections. Anyone here differ?

MMafia, zizi, OP, etc.

You guys feel everything is going to bust. If so, are you guys immune from it? When it does bust are you guys going to make millions while all those people who bought lose millions.

Are your jobs so safe? I guess if you work in MacDonalds it won't affect you. If the RE market crashes like you say who the heck is going to buy your house.

So, why don't you sell me your condo/house now.

I'm short NYM futures (only a couple because you guys don't like to trade them with me). I'm short RWX and IYR. I rent after having sold my last place. I'm not placing a huge directional bet on the index as a whole because I don't have enough cash :-)

And my job is quite safe, yes.

HimWhoKnows, what do you think, how long will it take until prices adjust? I am looking for a 1bed, and my broker keeps telling me the market is up. I don't buy it. I was thinking more along the lines that prices will stay the same for next 10 years, eaten up by inflation.

From Wall Street Journal today, re: Wall Street and the impact of subprime on the markets:

'Great Unwind' May Be Here As Problems Spread To Broad Bond Market, Top Brokers Could Suffer

Analyst Brad Hintz of Sanford C. Bernstein & Co. predicts "performance will decline" at the top five U.S. brokers for the second half of the year. "The halcyon days," he adds, "may be over for now." Perhaps that's why chatter around some firms suggests job cuts could be coming if conditions don't improve by September.

zizizi - NYM, RWX and IYR are all up,... ouch

This is my prediction. In 3 months mortgage rates will back down The Dow will set a record by years end and Manhattan prices will be reach new highs.
Why do I predict this well because everyone feels the opposite and is panicking. Once again the herd mentality at it's finest. Some jackasses are takings advantage of the herds insecurity and are fueling the flames. People are so insecure they are turning to anyone who they think has a crystal ball.
Please sell your property at a discount so I can buy it. I am looking in GV, Tribecca, Union Square or the West Village.

OP HimWhoKnows:

"...My bet is the U.S. will be in a recession in November 2008 going into the 08' elections. Anyone here differ?.."

Yeah, I'd like to 'differ.' Yeah, I'd like to 'bet' - and I'd like to have you put your money where your mouth is. But you wouldn't bet on your initial proposal (Manhattan residential real estate down 15% by 1 January 2008), so we know that you're full of s**t and won't back you assertions up with actions.

Unless you're ready to do so, take your oracular predictions (and if you're SO smart), make yourself EXTREMELY WEALTHY by the end of this year, with your razor-sharp-no-margin-for-error nose for every financial market and their various directions and movements. But I'm willing to 'bet' that won't happen, either.

grow up, Pseudonym... no one cares about this bet except you.

#172--Curious--You base this on what? Simple contrarian philosophy? Markets do, in fact, contract. Of course, there's no Dow Jones for the NYC real estate market so any effects of a market decline are difficult to gauge. In that the NYC market is not what it was last year at this time (or is it??) I'd say that prices are in a disinflated modee, i.e. stagnant pricing, moderate increase but nothing spectacular. As compared to recent years, 3-5% hike, even 10% hike is a down market.

Basing it purely on a a contrarian view point. I 'll make another call. Since everyone on this planet feels the real estate market will implode over the next year or two I'm going to go out on the limb and sate that real estate prices and the market is going to rebound outside of NYC in the following years.This will of course have a strong impact on NYC's market.
Please note that RE price in the West Village, GV, Tribeca have gone up quite nicely compared to last year.

I dunno about the TIMING of what you said spunky but chew on this from Warren Buffett:
"Be fearful when others are greedy, and be greedy only when others are fearful."
"It's far better to buy a wonderful company (Manhattan) at a fair price than a fair company at a wonderful price."

Bank of London to hike IR to 6%. This is not good because the U.S. does seem to follow in the footsteps of the ECB and B of E.

I don't believe the U.S. can cut rates!

"Of course, there's no Dow Jones for the NYC real estate market so any effects of a market decline are difficult to gauge."

If you are referring to 'Dow Jones' as a regulated trading market, then there is a 'Dow Jones' for NYC real estate, like the Housing Futures market on the Chicago Mercantile Exchange.

http://www.cme.com/trading/prd/re/housing.html

Bank of London, Goldster? And the Fed follows in the footsteps of the ECB? Right ....

Subprime is ticking bomb waiting to explode and when it does it's going to get ugly. Don't expect the FED or GOVT to bail-out any of the fools who took ARM.
Only advice i give is stay far away from real estate, even rents will come down as our economy slows, and will continue to slow throughout 08'.

Meanwhile prices in GV, West Village, Tribeca, and Union Square continue to rise. Will they fall, maybe. Look, for the past several years issues have arisen that have motivated the doom and gloomers to keep inflaming the insecurity of people. In the Long run Real Estate has done well and for anyone to try to time the NYC real estate market all I have to say is good luck.
My prediction is that RE prices in the neighborhood's I mentioned above will continue to rise and so will rents. Prices in NYC will be even higher next year than this year. After the sub prime fades away then what, oil, or another war or a climate issue. The list goes on and on and on.

#183, tell me this. Adjusted for inflation, over the last 100 years what has been the return of real estate?

Compare this figure to the stock market, and then go promote your real estate tactics with infinite rises.

Take a step back, and think...Is the land, wood, bricks, and paint really worth 700K for 600 square feet? People in a few years will be, wow, we truly were fools. Same people buying today are those buying shares of Companies in summer of 2000. Let's never forget how many people lost their savings and never recovered. Be cautious and careful. Speak to those in the I-banking world, the homebuilders, and the lenders. You'll get a good picture of where real estate will be a year out.

Him who knows, just curious: do you own or rent?
can you tell me how much money have you spent in rent in the last 10 years?
can you tell me how much money you made with the stock market in the last 10 years?
can you tell me how much money you would have today if 10 years ago you would have put a down payment on an apartment in NYC, say UWS, UES, GV ....etc...
Today you can probably say that you made x amount in the stock market, but you pissed away x amount in rent and proudly continuing to do so. God bless the landlords!
That's IT! YOU ARE A LANDLORD! YOU ARE SO SLICK!
Oh, I forgot to mention, in 100years.......you and I will be dead!!

FEAR is causing people to not see what is obviously coming to Manhattan real estate. You overpaid and now you are thinking what the hell did I do...

I think Spunky (posts #172 176 183) makes a point that is an important part of investing discipline: considering whether the conventional wisdom is wrong, rather than just jumping on the bandwagon and accepting it.

My gut feeling, though, tells me that the current situation -- in which there's a fair amount of debate about the credit/mortgage/RE market outlook, and in which one could make an argument either way (bullish or bearish) -- feels very reminiscent to me of the second half of 2000 during the tech bubble. NASDAQ had crested, the volume of new Internet IPOs was slowing, money for start-ups was harder to get. The general feeling at the time was, "hey, the pullback is a bit painful, sure, but it's good in that it's shaking the worst excesses out of the market." Sort of a feeling of, "well, these are tough times for some people in the industry, but as long as they're not tough for ME, it's an acceptable tightening - - no big deal."

But the late 2000 slowdown turned out not to be a mere "soft patch," but the beginning of the end for the vast majority of Internet-boom-fueled wealth. Things continued to deteriorate steadily all through 2001, until finally we had the awful WTC attack.

Now, since then, the Dow and S&P have rebounded, and surpassed their levels of that era. The NASDAQ, which was most directly at the center of the tech boom, has never recovered those heights.

My sense is that, over the next few years, sure, the larger economy will do o.k. But I think big parts of the mortgage, RE, and fixed-income financial sectors may never be the same, at least not for many years.

The argument, of course, can be made that underlying the Internet boom was just a lot of intellectual capital and property, and that we have real property underlying these mortgages gone bad. A fair point! But my main argument is that, the closer one's fortunes / portfolio / career are tied to the real estate or fixed income markets (and much of Wall Street employment depends on the latter), the more likely it is that such a person will be on the pain-sooner/recovery-later end of the spectrum. In other words, those people will have more pain / slower gain, than the country at large. And since so much of New York's disposable income emanates from those worlds, I don’t think the future is going to include any sort of smooth path to higher prices in the NYC real estate market.

Julia you are obviously oblivious.
Fear of what?
Bought my first in 2002, sold for almost double in 2005.
Bought a bigger place and happy to raise my family here in Manhattan!
You missed the boat and now you are just bitter with the world hoping for who knows what kind of major event to happen and say I said so.
By the way, I was just trying to crack a laugh out of people since I read many desperate and sad comments, like yours!

"My prediction is that RE prices in the neighborhood's I mentioned above will continue to rise and so will rents. Prices in NYC will be even higher next year than this year. After the sub prime fades away then what, oil, or another war or a climate issue. The list goes on and on and on."

Fair enough- everyone is entitled to voice their opinion.

Here's my prediction: RE prices in Manhattan will fall through 2009 as the issues with 'easy lending' work its way through Wall Street and Foreign Currencies. Wall Street bonuses will be hit hard this year, and next year as fallout from Funds vested in the many tranches of the Credit Derivatives market will continue to go bust. Today, BNP froze three of its Funds and the ECB injected over $100 billion in an effort to stave-off an all-out meltdown. The Fed followed suit and injected $20 billion as well. In other words, you can kiss Wall Street bonuses bye-bye compared to last year.

The single most interesting aspect of all is that the current turmoil in the Credit and Mortgage markets are a result of defaults and foreclosures that occurred months ago (takes time for the effects to percolate throughout the market). If you look at Credit Suisse's schedule of ARM resets, we are basically in the first inning of the baseball game. In other words, the problems we see now is merely a teaser of what is expected to come. And what is expected to come is a tsunami of ARM resets. If the current 'crisis' as the media calls it is due from the very initial beginnings of ARM reset effects, what will happen when the 'meat' of ARM resets actually occur in the future?

Well, in your opinion, Manhattan real estate prices will continue to go up next year. In my opinion, the inflection point of the Credit cycle has been reached, and the unraveling of 'easy money' policies will ultimately affect Manhattan real estate negatively in the form of Wall Street professionals either losing their jobs or bonuses. I also believe that unwinding carry-trades will strengthen the US dollar, causing the Foreign investors to lose their currency based discount they have been enjoying.

Real estate is local, and the local market here in Manhattan is buoyed by $$$ coming from Wall Street and Foreign Investors. Diminish the real purchasing power from those two, and we get a contraction of local Manhattan RE prices.

Woops! Just as I typed, the DOW slipped to -300 points today. I can already smell the evaporating bonus pools with each keystroke.

Cheers and good luck.

If we ignore the population growth in NYC over the next decade and just focus on todays news than yes I am in agreement prices will fall. 9/11 and the days afterwards were very depressing too.
I do believe that one day will come and people will forget about the present sub prime news that's flooding the media. This is in the long run very very healthy for the RE market in Manhattan. It flushes out the weaklings and makes the RE market stronger.
Remember don't worry be happy.

BTW--- I am looking to buy in either GV, Tribeca and the West Village- so for all those who are living in these areas and are convinced that your property values will go down please let me know I want to buy your apt at a discount.

"I am in agreement prices will fall. 9/11 and the days afterwards were very depressing too."

On the contrary, I am focusing not on today's news, but the behavior of Wall Street since the end of February when markets started experiencing volatility at the first signs Sub-Prime issues spreading (DOW dropped over 400 points).

In other words, I am looking at piecing together forward looking data embodied in the ARM reset schedule for the next two years and past data in the form of Wall Street's reaction to each Sub-Prime 'outbreak' (it truly is like a chronic disease that doesn't appear to be going away no matter how much people say that it's contained and wont spread) since February.

I am most definitely not looking at one day's worth of information. At some point, hopefully sooner than later, investors will realize that the Sub-Prime issue is actually not contained and is in fact spreading. Otherwise, why does it keep coming back, and each time it comes back, it comes back with a vengeance? Perhaps investors ARE realizing this and as a result, making the correct moves to cash out now rather than later. ESPECIALLY GIVEN THE ARM RESET SCHEDULE.

Remember, this is not just a liquidity crisis. This is a liquidity AND INSOLVENCY crisis. Very different from the LTCM episode in '98 or S&L crisis in the early '80s.

I see in other words your predicting a depression or close to a depression. Wheres all the banks shut down and run out of money.

No, the Central Bankers will not let that happen, as evidenced this morning by the instant injection of $130+ billion into the market to prevent such a catastrophe.

What I am saying is that Wall Street will not see the record levels of bonuses this year, and will experience Funds continuing to 'blow up' leaving people without jobs. And this will not be a positive influence to the local real estate market in Manhattan, and will only add to the downward pressures in local real estate prices.

That is what I am trying to articulate in this thread. Nothing less, nothing more.

When people say there are "record level of bonuses", this really affects a small few receiving bigtime bucks. I don't think the majority of analysts, associates and VP's get hit that hard. It's the big boys that don't see the multi million dollar bonuses... I believe even in 2000-2002, most people still pretty much got their usual take home.

Anyone confirm or refute?

The same level of people who were making $120k base + $80k bonus in 2002 were making $180k + $250k last year.

Why don't zizizi, spaceboy, mmafia, spunky, and himwhoknows share some more about themselves since they suggest to know so much. Like, approximately how much $ do you make annually, what type of of company/industry you work in, do you rent or own? Since your're using alias sharing this shouldnt be a problem. You guys talk like you should be be in your own hedge fund. Sharing this infor just might give you some credibility. Otherwise it's just blah, blah, blah, blah, blah

Everytime HimWhoKnows Opens his @#$@#$@ mouth and posts on here the @#$@#$ market crumbles. I want the read idenitity of HimWhoKnows, agreed with #197!

I don't suggest to know anything except you shouldn't trust the media or chat boards featuring people trying to push their agendas. (See fed backpedaling a bit just two days after inflation talk and HimWhoKnows posting under multiple aliases.)

Him Who Knows, Knows--

Tell the truth, brother. It is a NEW ARE. We are closing on a propoerty monday, and are thinking of walking away because I fell the apt is no longer worth what we have offered based on thye old reality. Stand by for the new era - war debt, $100 oil, high interest rates, and low real estate.

Note to Totall Anon. - EVERY Election between 1974 and 1980. And the next few...

flatdweller - know we KNOW you're either the OP and/or a total retard...

If you're 'closing monday,' as you say, it's too late to walk away! The window of opportunity for you to pull out closed looooong ago - you're on the hook, at minimum, for the 10% down deposit, and perhaps (most likely) the whole enchilada at this point.

Besides, if you're just SO SURE that interest rates are going to be SO HIGH, (and since you're 'closing monday,' you must have locked in your mortgage rate at least 30 days ago, pre-spike, at a nice low number) you'd be way better off locking in a very long term fixed mortgage rate at a historic low. As rates go higher, you'll just being paying your nice low monthly mortgage, all locked in snug like a bug in a rug while others are running about, gnashing their teeth, and unable to lock in ANY mortgage rate under 20%!! Since you're only putting down 10% or so, anyway, there's not much equity for you to lose on the deal (especially if you're willing to just throw away your 10% deposit, anyway, as you say you are), so it'd be WAY more prudent financially to buy the place now and lock in the nice, juicy, shiny, low rate.

So, flatdweller, why din't you stop lying? 'Closing monday,' indeed....