New Yorkers have more equity in their homes

It's hared to understand what all the Manhattan Bears see if Manhattanites are not underwater on their homes, at least compared to Nevada,Arizona,Michigan and California...

Urban , you have any thoughts on this?

chicken or egg? perhaps:

a) negative equity results from falling prices.
b) prices havent fallen in NY because of MASSIVE federal support of banking industry

Negative equity is the single largest predictor of default. It's the REO properties that get sold at the steepest discounts 20% off. Coops always required bigger downpayments, Cash Out Refinancings were never the huge factor in Manhattan that they were elsewhere, and home prices are above 2004 levels in NY(perhaps 2005-2006 in some cases). As long as the job picture is OK, there's no reason to expect a fall.

Good point on the MASSIVE federal support of banking

Riversider: "As long as the job picture is OK, there's no reason to expect a fall."

You think 9.2% is OK??? New Yorkers do have more savings than others which means they can hold on longer, but how many can hold on after 1 year of unemployment. Those who found another job might are likely making less and might not be able to handle their mortgage.

> b) prices havent fallen in NY because of MASSIVE federal support of banking industry

It is funny how far we've come... that 20% declines are explained as "haven't fallen"...
;-)

I guess compared to 50% down...

> It's hared to understand what all the Manhattan Bears see if

No, its pretty easy... the actual data. What on earth are the folks who think we haven't fallen looking at?

quality hasnt come down that much. crap has.

Sunday,
Are you saying the local unemployment rate is 9.2%?

ekartrash.
You are 100% right, the trash went up the most on the way up (percent wise) and has fallen the most.

It is funny how far we've come... that 20% declines are explained as "haven't fallen"...
;-)

yes, I could have worded that better! Cue the debate on how much we've fallen -- do we all agree it's about 15-20% from peak????

And can we all agree that without NY banks/hedge funds/insurers/etc practically mainlining trillions of dollars of taxpayer money over the past 2 years -- which made its merry way into employment, salaries, bonus pools, etc that the fall just might have been a bit more? ;-)

Riversider, yes, the latest reported unemployment for nyC is 9.2%. It has been above 9% since May 2009, topping out at 10.5% around this time last year. The next report is scheduled to come out this Thursday.

west34. Anyone buying a home should "expect" a 10% decline as a distinct possibility during some stretch of time over ten years, 20% over some period of time over 20 years, 30% over some span occuring over 30 years. Since the 30% decline should not typically happen that frequently perhaps buyers just got lulled and believed home prices were not allowed to decline.

Sunday,
At first glance it didn't seem correct. I think you are right. But the pool of home buyers in Manhattan is not the same as NYC At large. I suspect the unemployment rate of the demographic of typical buyers is much lower.

Riversider, of course the unemployment rate of the more educated is much lower, but that has always been the case. The point is, even if it went from 3% to 5% (totally making it up), the unemployment rate still went up and remained relatively high for a long time.

In any case, are you one of those who believe that prices in the outer boroughs do not effect Manhattan? I'm sure that's mostly true for the $3mm+ apartments, but below that... we'll see...

"And can we all agree that without NY banks/hedge funds/insurers/etc practically mainlining trillions of dollars of taxpayer money over the past 2 years -- which made its merry way into employment, salaries, bonus pools, etc that the fall just might have been a bit more? ;-)"

Tough one, W34. It works both ways. Yes, that income fuels demand. But it is also what got prices so high in the first place, meaning a higher place to fall from. The effect is on both sides.

SWE: You are equating the myriad Fed programs (TARP, TALF,etc) since 2008 that have enabled financial firms to show earnings (and literally prevented dozens if not hundred of major bankruptcies in NYC) with the zirp fueled bubble that preceded 2008. Well I spose you can do that, but to what end?

My point is that the bubble inflated almost everywhere, due to the same factors -- easy credit, irrational exhuberance, delusion, etc. But in fact manhattan IS different -- we got the lions share of the social impact of the bailout -- i.e. the bankers are still bankin'!

So when I look at Riversider's slide, I dont say "gee look at all the home equity that NY has!". I see "gee look what a trillion dollars of taxpayer money dumped on one tiny island can do to support real estate prices at an artificial level!"

Sunday, I'm not sure how much NY is affected by the outerboros price wise. To some extent I see Manhattan buyers as either current Manhattanites, foreigners, job relocations from other parts of the country, Rich New Jersey or Long Islander's buying second homes or making a life style change to Manhattan. I don't see Brooklyn , Queens ,Staten Island or The Bronx as having that strong an impact.

"My point is that the bubble inflated almost everywhere, due to the same factors -- easy credit, irrational exhuberance, delusion, etc. But in fact manhattan IS different -- we got the lions share of the social impact of the bailout -- i.e. the bankers are still bankin'! "

W34, all fair points... I think it comes down to perception, which isn't totally measurable.

But are you inferring that Manhattan didn't get a larger share of the bubble than the average place in the US?

""gee look what a trillion dollars of taxpayer money dumped on one tiny island can do to support real estate prices at an artificial level!"

There is definitely some truth to that... but, at some point the artificial runs out. Call it a delay then...

The point about a trillion dollars dumped on the Island of Manhattan is more than fair, but that's history and now Manhattan is propped up. It could've been different but we can't go back for do-over. At this point, the bet should be that Manhttan holds it's lead over California, Florida, etc