How much are we up from bottom?

We didn't reach the bottom yet, this is a double-dip, prices continue to go down. The US economy will not recover any time soon.

I think the high-end market is up 10% or less from the bottom......prices are still down approx. 25% from the peak.

I disagree YJBO...High end market, lets simplify that to 5m considering the height of the crisis saw a lockdown of mortgage markets anywhere near these levels, traded down from peak around 25-40% or so in early 2009. Look at some classic 7s and 8s on Park Ave & WEA trade around this time..you have to use a wide range because the high end market got hit the most % wise from this crisis.

To say the high end only reflated 10% I think is not correct. That would mean some deals are still happening 25-30% below peak levels and in todays market I dont think its that much..especially last 4-6 months when high end has been seeing great demand (i see the data, and it doesnt lie).

http://streeteasy.com/nyc/building/1165-park-avenue-manhattan

Take a look at 15C and 14C at this Park Ave coop..that closed in mid 2009 and contracts were signed in early 2009, at height of fear. These are just a few examples. Look at the bid the seller hit. That kind of gap happens in times of desperation, fear, fast liquidation need..today's market simply is not even close to the way it was times time 2 yrs ago.

switel....to say we are in a double dip implies we had a bottom, came up, and are dipping again....
my question would be how much did we come up from that bottom...

UD- What do you think market reflated overall? And what about quality product, Village, under 1 million.... THANKS!

first off, none of the volume data suggests we are currently in a double dip. As I see it, there is plenty of demand out there. People and brokers have agendas, so I like to look at the data. If pending was falling during this time of year and active was soaring, I would think that maybe the market is slowing again and strong bids are harder to come by - but that is not what I see.

Johnnyc - depends on price point. I think high end reflated 15-20% from its lows in early 2009, pockets even better than that. Look at that Park Ave bldg I linked, a few C lines sold in mid 2010, compare that to early 2009!! crazy. Its hard to pinpoint exact reflation levels, but across the board, we reflated. In general, I see things trading now between 10%-20% or so from peak levels. Of course, its so individual that a general call like that should be used just for conversation, not actual valuations. Look to the bldg comparable sales!

Good find with 1165 Park. Four in the same line in a couple of years.

UD- I completely AGREE. I dont think there is anything close to a double dip for NYC real estate, and as you say the data of volume and price in NYC show a clear and steady reflation.

That sounds clear about the different markets, and looking at comps in building. Thanks again.

People should just understand that Manhattan markets are highly seasonal!

JAN - MAY --> tends to see rising demand, falling off-mkt trends, rising new actives
MAY & JUNE --> transition to slower summer, falling demand, rising off-mkt trends, falling new actives
JULY - SEPT --> slow as hell, off-mkt rises, demand slows big time
Post LABOR DAY through Mid/Late November --> tick up in demand, rise in new actives, fall in off-mkt trends
Early DEC-End of Year --> usually slow for holidays

lather. rinse. repeat.

Agree with UD on individuality of the situation. The stuff we are looking at (1800-2500SF family apartments in good but not uber-prime areas/buildings) is all over the place. I've seen closings that appear so cheap they make me scratch my head and others that appear so wildly expensive they make me scratch my head.

Don't have the time to look for specific examples, but seem to remember seeing closings noticeably above 2009 lows, and others that are around the same levels or even slightly down.

Johnnyc, read this

http://money.cnn.com/2011/03/03/real_estate/housing_buy_or_not/index.htm?hpt=T2

Noah--I'm definitely seeing some strengthening in my area of interest (UWS, Morningside Heights C6-7, river views) since the lows of '09. Obviously view apartments tend to hold value pretty well but there was definitely a significant dip in value during the downturn (300 RSD A line apartments are a good example).

thx newbuyer and bramstar for chiming in with your experiences...one thing is for sure, its so local it boils down to bldg level. Which is what we are in dev of now, for next major product launch in 4-5 months.

Does anyone know where you can seea list of prices (average or median) quarterly for the past few years...thank you

i must have been asleep when the market hit bottom, i'm still waiting...$598k for a studio..

50 east 8th st $295K...yes with elevator
http://streeteasy.com/nyc/sale/583950-coop-50-east-8th-street-greenwich-village-new-york

Or 4 Lex, nice high ceiings $319K
http://streeteasy.com/nyc/sale/583240-coop-4-lexington-avenue-gramercy-park-new-york

350 sq ft is a pretty small studio.

or julia's preferred neighborhood, a renovated one bedroom in an elevator building for less than $500k.

http://streeteasy.com/nyc/sale/564498-coop-102-west-75th-street-upper-west-side-new-york

julia, you're simply wrong. stop with the $600k studio complaints, there are a ton of options out there.

bob4Two0
you get what you pay for

257 central park W 275K (maintenance a tad high but your more than "near the park")
http://streeteasy.com/nyc/sale/589615-coop-257-central-park-west-upper-west-side-new-york

http://streeteasy.com/nyc/sale/554608-coop-741-west-end-avenue-upper-west-side-new-york

http://streeteasy.com/nyc/sale/568295-coop-77-east-12th-street-greenwich-village-new-york

I went into contract in mid-2009, closed early 2010 (the board moved slooowly) on a 3 bedroom prewar in the village. a bit north of $2, very far south of $3. Currently, there is nothing remotely comparable to what we bought in the area asking less than $3.5. I'm not convinced my area of interest is off the peak at all at this point.

That said, I think it's ridiculous to discount the possibility of a double-dip based on trends in supply and demand of apartments. Ultimately, the NYC real estate market is dependent on the US economy and particularly on capital markets. If the economy and markets tank, we will see a double dip fast. For the moment, things look pretty good. But things can change fast.

"things look pretty good"?? The federal government's budget deficit grew by $222.5 billion in February, the largest one-month increase in history. Economists are forecasting the deficit for the year will be the biggest imbalance on record.

I think the most reliable indicator is the SE index, which uses same-home resales. You can find it at:

http://streeteasy.com/nyc/market/condo_index

Using the current value as a baseline, the Jan 2010 closings were 6-7% lower than today, and it'd take a 15% gain to re-establish the peak set by Mar 2008 closings.

AR...sorry for complaining...you're right..i'm looking for my monthly payment, after a 20% downpayment to be $2300 including maintenance and that's hard to find, especially on the west side.

julia, that's hard to find anywhere, but it's not because the average studio is going for over $500k these days. i think your limit might be low if your goal is an after-tax cost of $2000.

switel, did you actually read my post? the entire point was that economic conditions can tank nyc real estate. the "things" that look pretty good are prices and supply and demands of nyc real estate at the moment.

Keep waiting girlie bears.
:)

HR: Yes, asking prices are high, but there is also a bunch of that stock in GV kind of sitting there, no? It's helpful to get an idea of just how small that transaction set is.

Excluding Devonshire House, I count 19 3BR transactions in the last year in GV (in the over $2M category, also excluding townhouses).
We have 3 3BR transactions closing in GV in the last three months. This high end market is so hot I'm choking on the fumes. :)

I show 22 3BR GV properties on the market right now not in contract (by same exclusions as above). That's over a year of supply.

AR...before tax

happyrenter, I did read you post and I agree with the part "the entire point was that economic conditions can tank nyc real estate" but I do not think that things looks pretty good right know, in re as well. I see tons of listings that are siting and siting and nobody buys them and they are priced much better than last year, same time of the year. My conclusion is that everything is overpriced to the current economic conditions but maybe I am wrong...

UD...thanks for your response.

Re 1165 Park, what were the closing prices for 14C and 15C? (I can only see the asking prices).

> "things look pretty good"?? The federal government's budget deficit grew by $222.5 billion in February, the largest one-month increase in history. Economists are forecasting the deficit for the year will be the biggest imbalance on record

couple the deficits (and the fact that the biggest driver: aging costs are structural) plus the lack of savings and you get to the conclusion that rates will move higher not far from now. that's when the party starts in terms of prices imho.

I think the government is going to do whatever is necessary so that the true day of reckoning is indefinitely delayed.

How will that work?

One of your neighbors in columbiacounty? http://www.nytimes.com/2011/03/10/garden/10texas.html

> I think the government is going to do whatever is necessary so that the true day of reckoning is indefinitely delayed.

lol! i'm pretty sure by now that bernanke and co think this is indeed possible. but they are as dumb as i've seem as economists. it's going to make us investors turn into speculators maybe for teh long haul, but it's gonna be fun in a way. home prices will keep on going down though imho. americans better find happiness far away from home equity :-)

switel, you sound lonely. there is a guy who used to haunt this board named west67 who has been yammering about unicorns and $500 per sq ft pricing in Manhattan for sometime now. If you could find him you'd probably have at least one friend.
even the hardiest permabears have to have had major second thoughts about their position. Nada, saying "Using the current value as a baseline, the Jan 2010 closings were 6-7% lower than today, and it'd take a 15% gain to re-establish the peak set by Mar 2008 closings. " just makes you look weak. The point is the worst happened a year ago (more for rentals) and prices are going up up up.

jim

give me a break. "prices are going up up up." are you serious, or just parodying the unthinking, herd mentality that helped get us into this real estate/economic mess? try this on for size: the S and P has almost doubled--that's right, doubled--since early 2009. new york real estate has risen far, far more modestly.

i bought an apartment in 2009 that would have cost me a lot more now. but i am also a lot richer now than i was then. and, though i am glad i bought i apartment, from a purely financial point of view i would have done better had i continued renting and invested the apartment purchase price in equities.

I think people understimate how much real capital is out there in the world available for RE and other asset purchases.

I think people underestimate how much of that "real capital" was based on the price of RE. As the price of RE drops, what happens to that "real capital?"

Hey hones, didn't you sign a 2-year lease in the winter of 2009/2010? Must be sad for you, as you believe prices are "going up up up", meanwhile you've been putzing around holding your johnson.

happyrenter, I think you know better than a naked comparison of the two asset classes. I suspect strongly you understand diversification, and how asset classes are not purely comparable. I suspect you know that while you might have turned out better had you put the money into equities, that on a risk adjusted basis with risk appropriate to each asset class, the comparison isn't so extreme. I suspect that you know that long-term pension funds, endowments, family funds and the like allocate their money to many, many places. I suspect that you consider yourself rational, and that your purchase of an apartment is hard to view as irrational.

"people understimate how much real capital is out there in the world"

If it's concentrated in the hands of a smaller-than-ever percentage of the body count, then that doesn't necessarily lead to more RE purchases. Other assets, yup. John and Mary Smith will always need to borrow most of the purchase price of their real estate.

what Im saying is that there are so many people in the world that youd be surprised at how much money is out there. Its kinda like when you walk around the city at night and you see all these buildings lit up and you wonder where all these people come from..where do they work, etc etc..im just tsaying theres alot of money out there and with things improving I think you really could see a gap up across multiple asset classes

Financially, no one gets richer without one or more getting poorer.

Who got poorer because of Bill Gates or Warren Buffett?

There was a gap up in undervalued assets, marco. Overvalued assets have played alligator to their owner, causing a drain of negative carry and transaction costs many choose to ignore in their calculus. Some continue to feed their alligators, others hand it over to others.

I've got capital. Why the hell would I dump it in a risky asset I can borrow at 1.5%, with inflationary increases, all the while avoiding 10% transaction costs? Those lights you see, that's me, borrowing someone else's asset on the cheap while putting my capital elsewhere.

RE and equities dont have to be mutually exclusive. Both have thier place in a long term portfolio.

When I first discovered SE I was a real estate novice. Thanks to nada and others I've learned alot One RE term however,hasn't been explained. What does it mean when you "hold your johnson"?

Thanks

Well, NYC Dreamer, you will understand the straightforward nature of the "hold your" expression, once you go to Urbandictionary to see the alternate meanings of "johnson."

inonada
about 4 hours ago
ignore this person
report abuse Hey hones, didn't you sign a 2-year lease in the winter of 2009/2010? Must be sad for you, as you believe prices are "going up up up", meanwhile you've been putzing around holding your johnson.

do you really think that a two year lease would prohibit me from breaking it? in truth, you and w667 and ar really brainwashed me. i've got my eye on a property, have for a few years. i'm just waiting for those 500 per sq ft pricing levels to come in so I can buy it at a 60% discount from where it is now.

Dreamer, you need to re-watch the classic NYC RE flick "The Godfather", except watch it on TNT, not HBO. Look for the line "Hey, listen, I want somebody good - and I mean very good - to plant that gun. I don't want my brother coming out of that toilet with just his johnson in his hands, alright?"

Yeah, but you haven't broken it yet, hones. You missed the unprecedented historic runup in NYC RE since 2009. Now prices have gone up, up, up, and you've been left on the outside looking in. You're now relegated to a life of renting, and who knows how much longer that'll last now that rents have gone through the roof. What are you gonna do next year when your lease is up?

"RE and equities dont have to be mutually exclusive. Both have thier place in a long term portfolio."

OK, you're all about the asset allocation. That's cool.

I've got a nice equity mutual fund for you. It's got an earnings yield of 1.5%, and all of that is paid out as a dividend. The earnings grow with inflation, but that requires setting aside about 0.5% of that yield each year for capital improvements on the deteriorating assets. So, really only a yield of 1% (P/E of 100) that grows with inflation. The good news is the earnings stream is pretty reliable. The bad news is that the fund has a front-end load fee of 4% and a back-end load fee of 7%. Oh, and it's an illiquid closed-end fund that trades by appointment.

So, tell me, what fraction of your long-term portfolio would you like to allocate to that fund?

UD...Re the 2009 vs. 2010 trades at 1165 Park, appreciation from 2009 prices is almost 50%.

Are these trades outliers? Does condition of the apts. account for some of the price difference (a complete renovation of these apts. could easily cost $1M)? Did the sellers panic in 2009 and accept crazy-low bids? Is the market for these types of apts. really up 40-50% since spring of 2009?

yeah but can i live in it? will it keep me warm in the winter time?

inonada, have your gains in the stock market turned you away from home ownership forever?

Nope, but you can take that 1% annually and do whatever you want with it. Pay the rent, pay the heating bills, pay your maintenance, put up sound insulation, whatever. Money in the bank.

Now, how much should I sign you up for? Remember, all children deserve a seat at the table of the diversified long-term portfolio. We don't want to go around dividing them into the gifted, normal, and special-needs categories lest we hurt their feelings. They are all God's investment children, that which works for the gifted ones is just as good for the special-needs ones.

"inonada, have your gains in the stock market turned you away from home ownership forever?"

Well, before I had gains in the stock market I had losses in the stock market. Somewhere between luck, wisdom, and stupidity, I'm on the positive side of the ledger for now. But that could all change. The truth is I make most of my money the old-fashioned way: I earn it. Personal investment is more of side-fun for me. Unlike most people, owning a piece of real estate is just not a life goal for me. Ownership of things does not provide me with happiness. Investing wisely does provide me with happiness. The outcomes matter less to me than the choices. Will I one day own RE? Almost certainly. If 2009 taught me anything, it's that just as people become irrationally exuberant, they also become irrationally unexuberant.

Having said that, I am a big fan of experiences. I enjoy spending money on RE, and I enjoy varying things. Owning does not add to the experience, living in a 2x superior place does.

>"RE and equities dont have to be mutually exclusive. Both have thier place in a long term portfolio."

>OK, you're all about the asset allocation. That's cool.
>I've got a nice equity mutual fund for you. It's got an earnings yield of 1.5%, and all of that is paid out as a dividend. The earnings grow with inflation, but that requires setting aside about 0.5% of that yield each year for capital improvements on the deteriorating assets. So, really only a yield of 1% (P/E of 100) that grows with inflation. The good news is the earnings stream is pretty reliable. The bad news is that the fund has a front-end load fee of 4% and a back-end load fee of 7%. Oh, and it's an illiquid closed-end fund that trades by appointment.
>So, tell me, what fraction of your long-term portfolio would you like to allocate to that fund?

First, thank you for translating the yield to PE for me.
Second, once again, RE may very well be expensive. In fact, I think it is. But once again, right away, the first think you do is translate real estate into equities. It isn't. What equity mutual fund has the "earnings stream is pretty reliable"? Bernie Madoff?

"I've got a nice equity mutual fund for you. It's got an earnings yield of 1.5% and all of that is paid out as a dividend. The earnings grow with inflation, but that requires setting aside about 0.5% of that yield each year for capital improvements on the deteriorating assets. So, really only a yield of 1% (P/E of 100) that grows with inflation. The good news is the earnings stream is pretty reliable. The bad news is that the fund has a front-end load fee of 4% and a back-end load fee of 7%. Oh, and it's an illiquid closed-end fund that trades by appointment."

how about you compare that equity mutual fund with one that pays out 0, gets more expensive every year you have it, requires a whole lot of hassle to move in and out of it, and at the end is still worth 0

Woah, someone replaced his morning orange juice with Red Bulll

JuiceMan, when you have dinner at a good restaurant, you also have to pay them and it gets more expensive over time. At the "end", the food is worth "crap" too, yet you still go back.

hfscomm1; if you want to be taken seriously you need to bring forward another identity.

Just looking for a mutual fund where I can invest 30% of my income and get a return of -100%

-100%

Since for you "return" can only be in the form of money, how about...
JuiceMan Junior I,
JuiceMan Junior II,
JuiceMan Junior III

CC is here, Nada. Aboutready. Where is w67? We could wipe out half the smarm and all of the idiocy in on shot of admin just took a look at this post.

Why would you say that Sunday? I wasn't the one who came up with the mutual fund example and simply asked for a comparison point to inonada's "investment"

JuiceMan, perhaps I misinterpreted what you meant with all these analogies flying around. I thought you were saying that renting result in zero return. That's not to say that I agree with inonada example either. Renting vs. owning cannot be justified with numbers alone IMO; personal preferences, which can change over time has a significant place in the equation.

or, jm, at the end of the day you have a much larger savings account. it all depends on your choices, and how and when you spend.

who gives a flying f if people rent or buy? i don't. there's nothing inherently superior about either option, although at given times one or the other might make more financial sense. i just hate to see people "stretching" so that they are able to buy. house "rich" and life poor is no way to go through life. owning your own place is not worth that much, at least to me, and this compulsion to own is counterproductive to the rational needs of many. owning is perfectly ok, as long as mobility isn't likely to be an issue, and one buys at least the minimum to meet one's needs for the next ten or so years, and does so well within one's means and with a healthy savings cushion.

sadly, even now, only a few categories of people in manhattan are able to do so. it takes a fair amount of time for most people to save up the $400k necessary to buy a $1.5mm two bedroom (and it would be quite a bit more with that healthy savings cushion). if rents do indeed go up, it will take first-time buyers even longer, so many of them will commit to too little space just to get in the game. sad, and predictable.

What exactly is a "flying f" and is it legal in all 50 states?

Seriously, what kind of adult speaks like this?

AR, what you say is true, but you're living in one of the reasons people find renting in Manhattan less attractive - once upon a time you could apply for a RS, below-market-rate apartment in StuyTown or PCV and maybe get an apt in about 10 years. The rents were so pitifully lower than they are today that it made lots of sense to rent there forever. Who cares if it wasn't superluxe? The price was right. Now that budget option is gone. Mitchell-Lama coops in Manhattan have gone for-profit/market-rate as well. $4,500 a month for a great rental maybe make more sense on paper financially than buying, but there is some psychological threshold that makes the "tax advantages" and "throwing it away on rent" mantras kick in for people.

"I dont think there is anything close to a double dip for NYC real estate"

Except for that, well, double dip. Per the medians, we've already had one in this crash. We dropped again in the last quarter.

If the market continues to strengthen at the higher end, median prices will be off the charts. What will swe say then? Is there another statistical measure that he can use incorrectly to support his agenda?

Won't it be fun when a NYPOST article claims a huge resurgence in Manhattan real estate based on medians? Only a matter of time now. How will swe react?