Expect sales volume to slow

Hey Noah, thoroughly enjoy your Blog- keep up the good work!!!

That report was 'pre-credit crunch', and you on-the-street reality check is a valuable subjective tool that should be considered as a 'leading indicator'.

Cheers!

U.D. - Have you seen any data suggesting an even greater bifurcation between condo and coop activity? I ask because I suspect some of the momentum in the market is due to the weak $$, which should support condos (specifically new devlopmts) more than coops. I also suspect that you'll have better activity this month than last owing to a bit of a bounce in mortgage availability as well as momentum from the pre-credit-crunch fumes and the recently-issued Q3 Manhattan report (also pre-credit-crunch). In other words, it'll take some time for any slowdown (if there is one) to fully sink in psychologically and affect inventories.

Noah,

I can tell you this is what i see on the UES. Seen some listings taken off the market, prices are still sticky though.

MMadia - thx

yournamehere - not really, but that doesnt mean it is not happening. The weak dollar is nothing new, its been weak for over a year now, its just weaker at this point. I dont think foreign demand is that signficant a force in our buyer pool, maybe 10-15% tops, nowhere near 40-50% that some people think. If that was the case we would be in for a big problem if dollar rebounds. As far as better activity this month, not sure, Im still seeing hesitation and everyone I talk to is saying its slow with the EXCEPTION OF THE STUDIO and CHEAP 1BR MARKET! That market is selling. Its as if everything else is still priced high, but buyers aren't chasing. Slight disconnect between buyers and sellers to get to market value.

Robocop - Interesting. I wonder how many sellers out there will do that considering upcoming wall street bonus season and try to resell then! The next 4-6 months really should tell us alot about the strength of our marketplace. Im lookig at inventory nd sales volume, not really price appreciation or depreciation for a leading view of the market.

MMAFia-Great ass kissing!!!! Have you ever thought about teaching it. You appear to be a master in this art!--Bravo

U.D. - I've been going to one bedroom open houses for the past 5 weeks - prices seem to be all over the place and don't seem to make a lot of sense I've seen people trying to get 850K when comps seem to go for no more than 750K (especially from people trying to sell themselves, without a broker)

Does anyone know of a general formula that can be used for Price per SqFt vs maintenance? On selling price I've tried to go by $1000 a sqft. (new developments seem to go for $1200 a sqft) - Does 90 cents per sqft Carrying Cost sound reasonable (after tax deduction)? Or should it be figured out before the building's tax deduction is taken into account?

Last question - I know people are trying to say that Manhattan prices aren't going down, but what is the general thought on vacation or second homes? The Breezy Point discussion is making me think it might be smarter to invest in buying a vacation home and keep renting in Manhattan (for now). I'm paying $1880 rent now for a 1 bedroom in Chelsea. If I buy, it looks like my monthly outlay for a 1 bedroom will go to about $3,500 - I wonder if the difference would be just as good spent on a house on the beach...

1880 for a one bedroom. Okay that sounds ridiculously low. How many square ft is this one bedroom? You can't even get a studio for 1880.

Spunky: we so hostile towards everyone?

I live on the corner of 6th and 23rd above the citibank. The building is co-op, but I rent directly from the owner. He is not a family friend, relative, or ex-partner.

I started renting in 1994 and was charged $1350 a month. I keep renewing a one year lease. Every year the rent goes up about $25 a month - some years more, some years less... The apartment is an L shaped studio with a wall up making a bedroom with a window and a Living room. The LR is 15 by 23, the bedroom is 11 by 12. Kitchen and bath dont have windows. Altogether the place has just under 600sqft...

Happy?

I'm paying 1200 in a rent stabilized EV apartment.

SurferGuy:

Calculating maintenance is a bit tricky, but certainly not impossible. You should calculate, I think, by size. So for arguments' sake, let's assume a 750 s.f. unit. Condos should be in the range of $1 - $1.50 psf, in general, and co-ops a touch higher at $1.20 - $1.70. The general reasoning behind this is that the broad majority of co-ops also hold a mortgage on the building, so in essence, you're paying two mortgages - yours, and your share of the building's. If you have a terrace or other special amenity, expect a higher number, obviously.

In addition, if the maintenance is significantly higher OR lower than what I suggested above as a general range, it can indicate problems that a good real estate attorney (the one representing you) should look into carefully before you decide to purchase said unit. Really high maintenance can indicate either an extremely well run building with 24 hour doormen, porters to do your bidding, and all sorts of fabulous amenities, or it can indicate a building where expenses are out of control and massive assessments are in place. Unusually low maintenance can indicate a frugally run building that is very well maintained, or a situation where massive assessments are looming because nothing has been taken care of/maintained in ages and the building is about to crumble.

So more importantly than what the maintenance is and if the number appears 'appropriate,' is to have a sharp real estate attorney look into what those numbers actually represent in the specific building you're looking into.

Otherwise, caveat emptor.

Studio converted to a one bedroom , plus you've been renting for the past 13 yrs in same place. Now I understand. I'm not angry just curious.

Surferguy, IMHO you should stick to manhattan where there are jobs and $$$.
Vacations homes => Florida => Oops, nobody has income there and everyone speculating.

Surferguy: buy the place in Breezy Point or the Rockaways! With your low rent you will get such a boost to your own quality of life if you get a beach house right outside the city! It sounds like that is what you would like to do...

yeah buy the Breezy point place

"MMAFia-Great ass kissing!!!! Have you ever thought about teaching it. You appear to be a master in this art!--Bravo"

Quite an interesting behavior (or should I say maturity level) you display, but the truth is just because you don't receive compliments from me doesn't mean that I'm all of a sudden a 'master in ass kissing' when I do compliment certain posters here.

UrbanDigs is quite informative and certainly contains some interesting analysis. Noah's grasp of macro economic fundamentals combined with his access to local real estate broker data makes his blog a worthy source of information.

While I don't agree with all of his analysis, I do appreciate the building blocks he constructs to support his statements. You can tell those who know from those who pretend to know, and Noah's not a pretender, unlike *some* posters here. =D

and MMAfia I agree you certainly can be classified as a pretender a BS artist as well--Cheers

MMAfia-May I also add that you are a very credit worthy BS artist. You have skills in this fine art that you should be proud of. Although I have never met you I would think you have to be a lot smarter than you look.--Cheers!

I don't usually agree with MMAfia, but I don't think he is a pretender or BS artist. What help would this board be without a differing POV?

To defend my Manhattan over Breezy argument:
- I don't know where Breezy Point is, but everyone knows where Manhattan is. With a basic supply vs demand picture, a larger buyer pool is probably a safer way to go.
- I'm puzzled why you all think it is okay to tell this guy to purchase a vacation home on the EAST COAST (not exactly the poster child of beach vacation homes), for which he *may* use 6 months out of the year rather then investing in his primary property for which he will live in 100% of the time. This sounds like the same thinking that has led to crashes in other areas.

Keep in mind this is without a clue of where Breezy Point is.

I'm with aifamm - don't know where "Breezy Point" is either- after I checked out the Breezy Point discussion board I don't think I want to know. Doesn't sound like a place for you SurferGuy. Stick with Manhattan.

First off, I wouldn't analyze it AFTER tax deduction, I would analyze it BEFORE the tax deduction. So, does your example for a new dev with full abatement, or for conversion without?

Many new devs with tons of amenities have maint costs + tax (w/ abatement) totaling between $0.75 - $1.10 or so BEFORE tax deductions. Most are right below $1/sft.

The deduction doesnt make much sense because there are very little taxes to deduct due to abatement! But assuming you are in a new dev, its probably in line even before the deduction.

For existing, its higher obviously. With energy assessments of recent years, average is about $1.20-$1.60/sft or so. Higher than $1.60 and you start to wonder why OR make sure asking price is discounted to compensate for affordability. Average is probably around $1.40-$1.50/sft when counting total monthly's