Noah Rosenblatt says "we hit the bottom"

Then buy now or be priced out forever!

We've hit bottom?
Great!
How long will we be here?
Is there a gift shop?
Do I have time to use the restroom?

Use the bathroom now because we're not stopping on the way back up.

as is typical with journalists, things can quickly get taken out of context when 1/2 a quote is used.

Here is the question posed to me by Sarah: "you had said it looks to you like "we hit the bottom," did you mean in terms of prices or that and other indicators? if so, how to most succinctly describe?"

Here was my answer to her: "It looks like we have hit bottom in terms of the 'lull' in activity. This summer saw a slower than normal summer after a better than normal bonus season. Active inventory has seen an uptick in the past month, with about 700 listings coming back to the market; either new listings or listings returning to the active market from a prior off market state. Inventory trends ticked up about 5-6% in the last few weeks alone. The pace of contracts signed looks like it also is seeing a tick up from much lower levels in August, but its too soon to call any new trends. I would expect the pace of contracts signed to lag the pace of new inventory coming to market by a month or so. So, for me, I want to wait another 4-5 weeks before making more concrete statements about the state of the current market. But in terms of general market price action, I wouldn't make any statements because of the extreme seasonality we saw this summer."

And here is how the article came out:

“It is too soon to tell about a return to normalcy,” said Noah Rosenblatt, an independent broker who publishes real estate data on his Web site, UrbanDigs, and has been analyzing recent property listings, new contracts and sales. “It looks to me that we hit the bottom” in the sales slump that drove home prices down, he said, and that “activity is starting to really pick up.”

I think Noah is right, we're close to if not at bottom. 10% down from here is highly unlikely, but low single digits would not be unexpected. As far as "buy now or be priced out forever"...well that's even more unlikely. The ingredients necessary for strong price appreciation are no where in sight. The big attraction will be more stable carrying costs versus rents due to the markets new found preference for renting over owning(never good to follow the crowd).

Not to be too cynical, but such an Urban Digs prognostication is sure to result is some favorable ad dollars for his sight, along with favorable mention by the brokerages. Watch out Jonathon Miller!!

Noah, just read your response. I guess the twist made better press. Still think we're close to or at trough(in Manhattan that is). Other parts of the country could see 10-15% declines.

NYT...
Spinning spinning spinning your way to a better NYC RE market.
Yellow Journalism you ask?

Fluorescent Yellow

"I guess the twist made better press." More exciting copy and better press are not the same thing. Better press would have been thoughtful copy with some substantive foundation.

Its the New York Times Real Estate section! If it was real reporting they would have place the story in the business section.

to be honest, I have no idea where the market short term may go. It could go either way. Everyone has such a fascination with up 10%, down 10%, how can anyone call those kinds of moves? Its better to observe and see what the markets are telling us. We passed the severe adjustment I was expecting back in late 2007, so its going to be little up and down moves from here. So lets say a flat market has a +-10% range for mini waves for the next few years. Should stocks fall 30% and a new credit event occur, then its a matter of observing that event unfold to prepare for the hit our market likely will take soonafter. But certainly I dont see anything like the fierceness of this first adjustment down.

Urban, you raise an interesting question(not sure you intended to). Do you think price volatility in real estate is normal or lognormal?( or in other words would you think of the price volatility in dollars or percentage?

its getting on the way back to normal..not sure what would we define as normal? If its a vix, maybe 18-22? Under 15 you start to sense complacency, over 25 you start to see some nuttiness? After the extraordinary shock from late 2008 to early 2009, I think the new normal is in general at a higher level than it was for the decade prior. If Manhattan RE had a vix, then mid 2007 it was around 12 and early 2009 it was around 50..maybe now its around 25.

Hate fking idiots that ask dumb questions to 'look' smart on se. Here is the money question, given stuy town at $290psf, what is a comp sq ft on riversider coop on west 100's? $400psf? Riversider, I'd be saving 1/3 of your ss checks if I were you.

We are most likely at the bottom. The next few months should be the tell all, one can only keep an eye on what is happening. We have bought in because we needed the space. We have a signed contract but getting to closing has been a paperwork nightmare. If you are in the market for a purchase have your paperwork in order it could take 3 - 4 months. We should be at a bottom for a while the oil for the gas needed for NYC R/E market burned in the BP Gulf accident.

Holmes...
Big fan...love your work...
Then again, to you, what's not a bottom?

The comp # being bandied about re Stuy Town is totally misleading, for at least two reasons:

1. the debt of the 1st mortgage is around $500/ft assuming 7,500,000 gross residential sq.ft.
2. many if not most Stuy Town apts are occupied by low rent, rent-stabilized tenants.

Rent stabilized and rent-controlled apartments are worth a lot less and sell for a lot less,
even, and especially, in multi-family buildings, and have to be priced a lot lower in coop
conversion offerings in order to induce low rent tenants to buy.

Also, Stuy Town is located in a relatively dull and colorless section of Manhattan, and a long
distance to major subway lines other than the "L", in some cases more than one mile to the
East Side local and express stops at 14th and 23rd Streets.

In addition, the buildings are old, resemble public housing projects, and lack on-premises
retail. Those at the eastern end also suffer from highway noise from the Eaat River Drive.

The apartments are also for the most part isolated from the social amenities that make Man-
hattan so desirable and expensive. Imagine living at the equivalent of Avenue B and 17th
Street: it could take you longer to reach civilization than it took Columbus to discover
America, and he didn't have the beenfit of mapquest.
:

"Imagine living at the equivalent of Avenue B and 17th
Street: it could take you longer to reach civilization than it took Columbus to discover
America"

Walking 3 blocks?

Though I agree that super-low prices at Stuy Town will only go to insiders. Unless they can flip for big profits they'll just stay in their cheap digs.

Using a $290/ft figure to value Stuy Town demonstrates an utter lack of understanding of the situation. That figure is someone's reflection on what the current value of the cash flows are based on a continuation of the current situation - i.e. rent stabilized units. Inherently there is a value to the renter of those rent-stabilized leases (i.e. the difference between the RS rate and a free market one), one which a co-op conversion plan would present value and (if re-sold) monetize.
Let's assume that Ackman wasn't looking to have a cash bbq, and did considerable work to justify his purchase of some of the Mezz. His plan (and let's remember that he is a very astute, value-oriented investor, who early on was quite negative about housing and the banking system), had the $3b sr. being made whole, incentivized the leaseholders to convert (so some discount to fair value), and left profit for him and the other Mezz holders. Off the bat, let's say $3b + a 15% discount to the leaseholders + 30% return on the Mezz (though my guess is that he was shooting for much much more). I believe the total size of the Mezz is $1.4b, so at 15c/$ he bought it, that's $210mm. A 30% return on that would make it $273mm. Add that to the $3b, and the leaseholders would buy in at let's call it $3.3b. But that is an 'insider price', so add the 15% discount, and call it a $3.9b 'worth', which would translate to $520/square foot (and I don't know if the 7.5mm square feet includes common areas, which would of course make the actual numbers much higher.

Isn't Rosenblatt just a failed day trader who ran out of Bah Mitzvah money and who posts nonsense articles on a blog to get page views.
How will this blog post last week help any buyer or seller - Krugman's Keynesian Flashback: August 2002?
Or this list of things happening that he posted - Here is a list of what I see happening right now: •Treasury Rally On - Investors seeking return OF capital, not ON captial •US Millionair Index Turns Sharply Bearish •Housing Tumbles as Stimulative Policies End: Existing Home Sales Drop 27.2% •S&P Cuts Ireland Rating: CDS Near 1-YR High •Capital Flight + Liquidity Worries in Greece: German Bund Yields Fall •Unemployment Rates Rise in 14 States •Durable Goods Orders Rise Less Than Expected •Contained Depression? Negative Debt Growth •VIX Rallies to 7-Week High

We didn't hit bottom and don't most people who talk to the press know how to phrase their statements in writing so that there's no way to be taken out of context?

"don't most people who talk to the press know how to phrase their statements in writing so that there's no way to be taken out of context?"

that statement is so ignorant as to be beyond laughable.

i expect much more of this when tools to enhance manhattan real estate tracking are available to people. especially from brokers.

rb345 - not to mention, that units which have been rent stabilized units for 50+ years, aren't exactly in mint condition - basically the landlord has done the minimum necessary to keep them habitable. Obviously there are many units which were upgraded recently to get them to market rate, so this wouldn't apply to those.

so, the most bearish statement out there... was one from a guy who didn't actually say prices would go up.

What am I missing? I read it and gathered from the statement that UD believes we hit a bottom in terms of SALES ACTIVITY. No comment on prices. Seemed pretty clear to me.

Anyone who thinks we're anywhere close to a bottom in terms of prices failed third grade math.

leave bottom picking to the proctologists...

again, my statement couldnt be clearer to the reporter: "It looks like we have hit bottom in terms of the 'lull' in activity"

Seems like you were going for a soundbyte, and it bit back.