where are all the idiots who made the 2007 doomsday predictions?!?

Poorishlady, btw, best use of the word malapropism I've ever heard. And in response to your question, I think anyone who is inspired to buy at any price point should buy at that price. Period. I think what you are looking at may reflect a different market than what most of Manhattan is looking at, and that your desire to buy represents a realistic value opportunity. The rest of the city has been in a speculative haze, paying any price for any apartment, in hopes of realizing massive appreciation, which has come to an end. Speculative markets that have over appreciated always come to a catastrophic ending. Someone please point out the exception to me and prove me wrong...

Depends on how you define "catastrophic ending." The tech bubble burst in 2001 and there were still some companies that did fine. Tech is doing pretty well right now. I think of the Manhattan RE market as kind of like Microsoft... might have some short term challenges, corrections but for the medium and long term things look pretty good. Or is that the Seattle RE market? :-)

Spunky, thanks, I am having my nightcap, is that something for old people, because I'm actually 34 years old. Is a nightcap only for older peeps?

poorishlady, it sounds like you have a plan (presumably budget as well) and thus should go for it. If you're concerned about your cash flow, don't put as much into the downpayment so you have some extra cash on hand and prepay when comfortable.

My feeling is that a lot of the over-analyzers here are first time buyers, flippers (short term outlook), or not committed to NYC so you're in a much different situation.

There are currently 74 2br and bigger coops at $500k and less (in some cases much less) on this site alone.

http://www.streeteasy.com/nyc/sales/manhattan/type%3AP%7Cprice%3A-500000%7Cbeds%3E%3D2?page=1&sort_by=updated_desc

The median ppsf in this range is $463. Manhattan is indeed an island, as the bulls like to say, but much of it is Harlem and further north, and quite inexpensive.

Some of the comments have been helpful and give insight into people's decision making process here in NY such as Will, POPs, Billshiers, poorishlady. I am hopeful that the intelligent comments can continue and perhaps those people who only want to prove that they are right, insult others, or wind up those with a different point of view will take a back seat to the useful comments.

The fact of the matter is there is no real market right now, and hasn't been for the last month while everyone sits on the sidelines. Most market participants are waiting to see what Bonus season and job cuts will bring, buyers (hoping for weakness) and sellers (hoping for a resurgence in the event that buyers shrug off their unanticipated pay cuts) alike, even though we all know what the future is going to bring. Hope and wishful thinking never helped overly optimistic sellers at the end of a strong bull market.

In fact, prices may never appear lower to an observer (although unlikely), because sellers may never lower their offers that much. However, that isn't to say that you can't go out and negotiate lower prices for the same apartment than you could a year ago. I don't think there is a soul who would deny that that is not currently the case. Looking at last month's medium or the mean or even the mean price/sq ft. of current offerings does not tell you what prices have done. Prices, imho, have come down, and will continue to come down more so in the future. And not by 1 or 3%. I think you could argue that prices are off approx 5% currently from the highs of last year (Price/sq ft on same neighborhood comps, depending on the hood), with another easy 10% to follow.

The reality is that we are long past the affordability point in Manhattan for most of the non-trust fund babies, and the big earners on the street will for sure step aside as they watch their colleagues get the axe and their own bonuses cut by 40%. No one source (i.e. foreign buyers and/or GS employees) can support a market that is over priced. It can't happen. And what isn't going up eventually comes down. The posters on here who argue how meaningful it is to buy 10% or 15% lower on such a highly leveraged asset for most buyers couldn't be more right, and those who don't believe it still won't understand why the pain is so excruciating when they watch as the debacle unfolds before their eyes.

Throw on top of this a failure of a major bank or two, and the domino effect that this has on every other institution as counter-party obligations go belly up on credit derivative swaps, and the effect this has on compounding the net capital requirement issues facing the major banking centers, and you have all of the ingredients for the remaking of an early 90's scenario in NYC real estate. Maybe even worse.

sorry for the repost - wish i could take that back. I really do. Total accident.

"However, that isn't to say that you can't go out and negotiate lower prices for the same apartment than you could a year ago."

That may be true in some areas, but I agree with aifamm. Lots of activity this weekend, plenty of people at open houses, and even heard about some bidding wars. Fact is, good apartments in good neighborhoods will sell higher today than they did a year ago.

"No one source (i.e. foreign buyers and/or GS employees) can support a market"

This is mostly true but, what it can do is reduce the impact of a downturn - which is exactly what foreign buyers are doing. I have two friends from the UK that are currently renting, weren't in the market to buy, but decided to buy based on how relatively inexpensive Manhattan real estate has become to them. I heard last week while I was in Vancouver that Canadian's are buying San Francisco real estate. This is happening, it has an impact, and while it isn’t a silver bullet, it will soften the blow.

"The posters on here who argue how meaningful it is to buy 10% or 15% lower on such a highly leveraged asset for most buyers couldn't be more right, and those who don't believe it still won't understand why the pain is so excruciating when they watch as the debacle unfolds before their eyes."

I don’t think anyone has argued on the meaningfulness of a 10-15% lower purchase price, what I have always said is that the 10-15% decrease in purchase prices is unrealistic. There is a current softness in the market, there are some decent deals to be had, but folks waiting for $100-$150k discounts on $1M properties in good neighborhoods are being unrealistic (new construction may be different but I know little about this market and refrain from commenting).

As far as your “debacle”, I think you should be careful with gloom and doom predictions. I understand a lot of folks on this board really hope to tank the NYC market through their strong words and sky is falling predictions. For people currently looking to buy, I suggest you research all data points before making your decision. Any extreme predictions are probably just that, extreme. The answer lies in the middle.

The early 90's slump was based on a lot more than just the economy itself There was much crack in Manhattan. Much more crime. Many buildings and neighborhoods hadn't yet been gentrified and improved

While we seem to be a one industry town, we're not. We're still a media center, corporate headquarters and much more

The lure of Manhattan might be as strong or stronger than ever. Parents are more willing to help their children buy here. Empty nesters want second homes here

There are many variables none of you have even attempted to explore--and there's always a holiday season lull

Manhattan has come far in the past sixteen years. There might be a price correction or people who were going to buy a million dollar one bedroom might "settle" for a 750K onw. Things might remain as is

The reality is none of you know--as for a 490K two bedroom in Manhattan that's like asking for the moon and stars--unless it's a 6th floor unimproved walk up railroad flat--I don't think anybody wants to spend their older years walking up many flights

And yes--closing on a studio but hoping that the market comes down so you can sell and buy a one bedroom is a bit unrealistic

I read this in hopes of learning something and wonder why I bother

"as for a 490K two bedroom in Manhattan that's like asking for the moon and stars--unless it's a 6th floor unimproved walk up railroad flat--I don't think anybody wants to spend their older years walking up many flights"

Not true. It's a very reasonable price in the northern neighborhoods: Harlem, Hamilton Heights, Washington Heights, Inwood.

So I missed by a couple of weeks. When I made my dow prediction is was around 13800. Now it's 12600. At this point 11000 seems a lot more likely than 15000.

prices are changing...I bought a studio for 450k (closed last month) and I just heard same apartment two floors above is listing at 400k.

Sounds like 11% to me. Julia, don't sweat it, if you are looking to upgrade it will work out to your benefit.

julia interesting ever since you bought an apartment you have been very negative. (ie wishing for prices to go down so you can upgrade to a 1 bedroom, stating that the same apt you just bought recently is now listed for 25% lower than what you bought it for.)
Zizizi your I now feel that the Dow has reached a bottom since you are forecasting it to go lower.
I love this kind of stuff

at this point, I dont know how anyone can discount the housing slump/credit crisis and the effect it is having on the financials, the economy, and the consumer. Its just the tradabale markets lagged in reacting as they always do for economic data to reflect the problems in the underlying econonmy. You can choose to be in denial and be behind the curve, or you can study/read and understand WHY we are in this situation, and suddenly it all makes more sense.

We are probably in a recession right now and dont know it. And even spunky cant argue that real estate will appreciate in a recession. If he does, well, then, I dont know how to respond. Financials are in such bad shape and as I wrote on urbandigs so many times in the past 4-5 months, this credit beast has so many tentacles to it that you are yet to see how far it spreads! You cant turn chicken shit (subprime, junk, 'BB' rated paper) into chicken salad (AAA paper) and not expect these kinds of problems. Ratings agencies are so behind the curve here that downgrades will intensify the problems. And trust me, they are coming!

"you can study/read and understand WHY we are in this situation, and suddenly it all makes more sense"

Yes, it makes sense urbandigs. At this point we all understand why we are in this situation. We also understand the risks going forward. You are good business man urbandigs. You have latched on to the doom and gloom speach and customers must be running in your office. Know thy customer, and tell them what they want to hear. Got it. Do you have anything positive to say about 2008? Are there any possible scenarios where a downturn won't be as bad as the indicators say? Oh, and if we are in a recession right now, I would have to say that prices have held up pretty good eh?

Juiceman - yes, actually I cant handle the amount of buyers that are asking for my services because they know what they are getting in return as far as consulting. Would you rather work with an agent that lies to you and convinces you to jump in now before its too late; prices are already being pressured here but every data report on Manhattan is lagging! And again, talking and explaining why we will enter a recession is not doom & gloom, its reality and recessions are healthy for longer term sustainable growth.

I explained why Manhattan is lagging so I wont explain again. Read it on the site. The only way the downturn isnt as bad is if all the expectations of carnage for banking/financial sector are overblown. Very possible. Its bad Juice. Very bad. And talking about and having the reports physically come out are two different things. At least respect that what I have been discussing has come to fruition. I dont like it, but its reality. Who wants to live in fantasyland.

I tell my customers this, but you must understand that every situation is unique and if they are going to buy, they are going to buy. Most appreciate the honesty and work with me. Yes, prices have held up but who cares about what happened so far, all I care about is looking ahead. Do you get that part? If prices will NOT hold up for the next year or two, who cares that they did hold up in 2007?

As for 2008, honestly no. I have very little positive to say and discussed this in my predictions. Now the whole year is very far out and who knows what will happen by mid year and end of year, but jobs are going to be lost, stocks are going down, there is a negative wealth effect, the official recession prob wont be announced until mid year or so after data proves it based on definition of recession(GS/MER/MS all now predict recession, oh and Julian Robertson too, but you prob dont know that).

Stop worrying about my business and instead worry about your own situation. I have 3 businesses, not 1, and right now my goal is to brand urbandigs as a trustworthy source of information and advice on Manhattan marketplace. I can care less if I have a bad year. When I see positive news return, I will discuss it AHEAD of time, and hopefully people will listen. Right now, Im more concerned than positive.

I'm not worried about your businesses urbandigs. I actually complemented you on being a very good businessman, and again, never said you weren't honest or didn't have integrity. However, it would be a mistake to assume what I know and what I don't. I have a different opinion than you which is not the same as ignoring the indicators or living in fantasyland.

sorry juice. thought you were being sarcastic there as you said "You are good business man urbandigs. You have latched on to the doom and gloom speach and customers must be running in your office."

if you dont mind me asking, what are your thoughts on everything I stated about economy, financials, and 2008 then?

As I stated before wouldn't it be interesting if all the sellers in Manhattan took their apt off the market for one to two years.Inventory down to 0 would be rather fascinating. I wonder what that would do to the market. Kind of like an OPEC. OAOC (Organization of the Apartment Owner Committee) Cut off the supply or at least there should be agreement on supply or caps on the inventory. Just to keep things in check or to spice it up a little.

Urbandigs is recommending any potential buyer to hold off buying in Manhattan and I'm recommending any potential seller in Manhattan hold off selling

Hey Spunky, this is the bank - your mortgage payments are overdue. We'd foreclose on your little empire of rental properties, but we'd never recoup our loan amounts the way the market is headed at this point...

...so please make sure you have your payment in by the first of next month inclusive of all the delinquency fees....hope you still have your fingers crossed for that buy>rent positive cash flow ...

Hey buster sorry but I'm in positive cash flow with the rentals and by the way I don't have a mortgage on my home.
Oh get ready for an increase in your rental payments. Forecast call for approximately a 7% hike in Manhattan in 2008.

But Spunky, I don't rent... I shorted the crap out of enron and then invested the proceeds in real estate during a post-911 market, snatching up 1,000 properties at amazing valuations. I used the rental income to pay off the mortgages, and then I sold 999 of them at the absolute high earlier this year, keeping a trophy penthouse on prime 5th avenue for myself (did I mention that maintenance is a mere $10 per month?). And then I invested the proceeds of my sales in gold.

sellers have been greedy...they made 4 to 5x their investment on their manhattan real estate...ie hundreds of thousands of dollars in profits and they dont want to negotiate down $50k....its sickening - the greed....Also, if who would have ever predicted in 1996 that a 1 bedroom going for 125k would be selling for 600k in 10 years....so why cant the reverse happen?

WOW- SOOOO Clueless.. even when honest real estate brokers are trying to show the truth... the overleveraged homedebtors must be very nervous to be this emotional!!!

As urbandigs correctly pointed out, the stock markets lagged big time (of course it did, so that the institutions could get out at a high price as they always do while the smaller investors get wacked). In any event, the party is OVER.

Now, even Goldman says we WILL have a recession in 2008. And as urbandigs pointed out, if you SERIOUSLY believe that a recession will not negatively impact prices in Manhattan, then, well, no point in carrying on any further discussion.

And while I do realize that the 90's were different (crack, whores, crime in the city), we have another BIG GORILLA in the room: a serious SERIOUS banking and credit problem in Wall St. that has never been witnessed in scope and size before (thank you newly created derivatives that didn't exist during the s&l crisis). Watch out!!! Layoffs coming next week during earnings announcement of the major Wall St. firms.

Look out below!!!

Recession: Check.

Wall St. unfolding: Check. Have any of you seen what's been going since the start of 2008???? We are on life support here!! Just yesterday, we broke through MAJOR moving averages and support levels. Really bad.

Psychology shifting: Check.

Overleveraged Homedebtors getting more nervous and thus, more emotional: Check.

MMafia I think you've been watching to many American idol commercials with all these check.

Spunky, i don't mean to be negative...i'm not going to be moving again....

Rents to increase by 7% in 2008--Check
Rental market still strong in Manhattan--check
Low vacancy rates in Manhattan --check
Job market still strong --Check
Inventory still low -Check
Michael Signet director of sales, Bond New York
“Perhaps surprisingly, despite all the negative press, we are having a busy December. Buyers are certainly a bit more tentative than we have seen in the past but transactions are taking place and prices have remained strong.”--Check
Strong demand for larger apt ie 3 bedrooms --Check
Low inventory --check
Still looking for another investment property in Manhattan -check

How can you check "Rents to increase by 7% in 2008" if it hasn't happened yet?

Also, 5% US unemployment and ongoing layoffs in the financial sector do not equal a strong job market anywhere...

Certainly the director of sales of an nth tier real estate brokerage has no reason to exagerate or act optimistic...

Spunkster still selectively ignoring real data points and grasping at any straw that supports his theory: CHECK!!

Buster, let's check (no pun intended) back at the end of the year compare notes.

Groupthink.... check

Dow up 146 today --Check

30 year jumbo around 6% - check
Potential of another fed cut - check
Investor cash available to buy property - check
Foreign investment - check
Increased exports - check
Election year - check
Manhattan remaining the best place in the world to live - check

Original poster here again.

buster2056 says to spunky "...How can you check 'Rents to increase by 7% in 2008' if it hasn't happened yet?..."

Ummmmm, buster2056, the same way that all the little-black-arrows-point-down-people said that

"...Dow will be below 11,000 by the end of 2007!!..."

"...Housing market down 20%! - no - 30%! - no - 40%! - no - MORE! - by the end of 2007!!!..."

"...The subprime/Alt-A debacle would tank the Manhattan real estate market FOR SURE in 2007!!..."

"...A bad bonus season would tank the Manhattan real estate market FOR SURE in 2007!!..."

"...High inventory would tank the Manhattan real estate market FOR SURE in 2007!!..."

"...Manhattan real estate selling for fifty cents on the dollar by 1 January 2008!..."

It's the same hue and cry these people made in 2006 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2005 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2004 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2003 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

And so on....one day, of course, they'll be right - the market will recede to a greater or lesser degree for a while - that's what markets do - they go up and down.

What I've taken serious exception to, and why I started this thread in the first place, are the idiots who make grand, sweeping claims in either direction about the real estate market in Mnahattan based on faulty logic and feeble reasoning. Look, I don't know if even I'd buy right now, unless a very special property came up that was a rare and unique opportunity, and I was a fully informed buyer and sanguine about the current state of the market, and I was not buying to flip but to live there with a long(-ish) time horizon. But as far as the asshats who spout ridiculous predictions laced with their schadenfreude at the possibilty of watching people take a hit on real estate - well, it's just idiotic.

Reasonable people can disagree about, and still manage to have a (very) interesting discussion on the state of the real estate market in Manhattan and its direction (up or down). The rest of you should go post on curbed.com instead.

Malraux, I was merely objecting to Spunky's use of one prediction (that rental rates will rise by 7%) as "hard evidence" to support another prediction (that manhattan real estate prices will rise).

As an owner, I'm not too concerned about pricing b/c I'm not likely to move in the next 5-10 years. However, I am def concerned about my declining investment portfolio (dow may be up today, but down big over past few months), the credit crunch, and a very possible recession. It's silly to assume that any of these wouldn't affect manhattan real estate. Lower inventory, increased foreign investment etc. could potentially mitigate pricing declines, but the level/extent of these factors is unknown and the net effect is impossible to determine.

I agree with you regarding the grand sweeping generalizations and conclusions. I would also add that too many posters are focused on their track record for correct predictions, and love to boast that they consistently "win" by making the absolute best choices in retrospect (which is why I satirically posted the blurb on shorting enron, buying at the re market low, selling at the high, investing in gold etc.). Instead, all you can do is make the most-informed choice based on the information at hand at the time. Personally, I'd love to be wrong and hope that all of the negative sentiment about the next year or so is entirely misguided. I'm just not going to be foolish enough to ignore it.

Buster don't worry just be happy!

Rental rates probably will rise, probably because of all of those condos that owners need to rent out. Finally, a decently priced luxury rental market in NY.

That's one way of looking at it or the demand for rentals may even get stronger due to the build up of potential buyers/renters that are too nervous to buy. Keep in mind that we are are at 1% vacancy rate so if in fact that rate goes up it will have a inconsequential affect.
You may be able to pick up a good deal in Elizabeth NJ if you don't mind the commute. Utica, NY may also be an attractive place to rent but the commute may be a bit to much. Buffalo, NY is another option but catching a Broadway Show, concert, opera etc and then having to drive home probably will be a bit overwhelming but doable nonetheless. Just food for thought.

Hey Spunky,

Have you been looking? I have some serious doubts about the methods used to calculate rental vacancies. I'm fairly certain the 1% vacancy rate is calculated using a certain set of rental buildings (the NY Dow Jones of apartments). I really don't think that this includes rentals of condos and coops, the former of which are becoming available at increasing rates and with longer times on the market in the higher-level market.

I also appreciate your sarcasm, but Utica and Buffalo are a bit much for a girl who stems from Seattle, New York, Tokyo, New York again, Seattle, and New York again. Plus, just curious, how many broadway shows have you seen this year? I know a ton of people in NY who haven't seen a one.

i've seen one in 13 years. never again.

I'm not that fond myself. I also find that a lot of NYrs simply don't have the time to do much in the city. They tend to go on vacation and buy homes outside the city. So, why bother? They don't see their family much more by living in the city.

AND, this year through the next 6 are going to be HELL for school admisssions. Read this and weep.

Good point I usually go to Broadway Shows during the Holidays when my or my wife's relatives come in.
I've have been to several off Broadway shows a few concerts and a couple of operas last year.

Is that you aboutready? Welcome back! I went to the ballet this weekend with my wife. I thought it would suck but I actually really liked it.

spunky - have you ever been to Elizabeth, NJ? I was curious if you had some sort of affinity or really bad experience there.

would there even be a need to have this discussion if it wasn't apparent to everyone that a bubble has formed?? Owners defend high prices, buyers on the sidelines defend renting....whatever....if you buy an aparment today for 1300 bucks a square foot in order to make a 5% annualized return on your money you need to sell it for 1700 buck a sq. foot in five years....might happen, might not, but I'd rather be in cash into a recession and buying stocks/bonds that I can make 25-50% on in a year without any cost of entry/exit and much more liquid...can I live in my stocks/bonds?? No, but I can fucking rent something really damn nice and retire 10 years earlier than tying up all my capital in a dead end asset for the next 5 years. If you think that foreign bid is gonna stick around take a look at Marks and Spencer's earnings today....the european consumer is getting SQUEEZED, it's the year of re-coupling....the 'shock' of 1.50 euro is over, they are gonna be losing jobs just like all the dopes at Citi next week....

well I got lost in Elizabeth NJ once and that was enough for me.

25-50% a year? Yes, you are right jnetter, don't buy right now. It is better if you work with your therapist for a few more months and get a grip on reality

The ballet, and you liked it? You're a better man than I. I consider myself supremely fortunate that my eleven year old daughter prefers Spinal Tap, Hendrix, Will Ferrell and basketball to horses, the Jonas Brothers and the ballet (we probably had some influence there). And no, she's not just a jockette, she's a very pretty, stylish girl.

Juiceman, enough with the therapist comments. I don't think an advanced degree in psychology gives one any financial credibility at all. Good to be back.

spunky, will, Malraux, a brewskie to each of you for sticking to your guns and for not jumping on the doom and gloom bandwagon.....

NEW YORK (CNNMoney.com) -- Federal Reserve chairman Ben Bernanke said in a speech Thursday that the central bank is prepared to continue lowering interest rates in order to help keep the economy on track.

He also reiterated that the Fed does not believe the economy will slip into a recession this year.

"We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," Bernanke said in prepared remarks before the Women in Housing and Finance and Exchequer Club in Washington, D.C.

http://money.cnn.com/2008/01/10/news/economy/fed_bernanke/index.htm?postversion=2008011014

Dow Jones once again up over 175--Check
Jobless Claims down past week--Check
Job market still strong-Check
Walmart beats estimates-Check
Manhattan Rental market very strong-Check
Manhattan Vacancy rate around 1%--Check
Downtown Condo market strong-check
Bank of New York in talks to buy Countrywide-Check
credit Market will eventually turn back to normal-Check
Interest rates are at historically low levels -check

spunky = moron... check!

A rating company stated the following in regard to BoFa potential acqusition of Countrywide

"If it's a traditional acquisition, in which Bank of America buys Countrywide's shares, then it's jubilation for fixed-income investors," Shanley said. "Bank of America would likely assume the debt, and that would solve a lot of the issues that the creditors have."

Now that's Shagadellic--Yeah baby

"He also reiterated that the Fed does not believe the economy will slip into a recession this year."

I'm curious to see what "experts" will come out of the woodwork predicting a recession / all around meltdown now. Surely we can't argue with the chairman right? I thought we were already in a recession?

spunky, I'm afriad this thread could be very quiet over the next couple days. Good luck finding your next property.

I like the shagadellic reference, Spunky, and maybe I'm totally off, but I thought BofA was not doing so well. It's tough to keep track of which bank is having which credit troubles, but I kind of recall a credit card problem going down here. So the creditors might be jubilating until BofA tanks? I can't even imagine who'd want Countrywide. Oh, I know, Dubai might be in the market. Or maybe the Ukraine? I bet Warren Buffett isn't interested. Okay, I may be eating my words in a couple of days, but I sure as hell wouldn't be investing in the purchaser of Countrywide (or Citi for that matter) anytime soon.

20% return?? It's actually REALLY EASY since everybody needs capital right now.....FRE and FNMA preferreds....are DRB eligible...yield 8.25% and are tax free....so 11ish for all Manhattanites.....call up your broker, you can buy 2x leverage for a song (takes away about 1-2% in total return a year)....gets you to 20% return on capital for a government sponsored agency.....ummmm, is your apartment backed by the U.S. govt??? There are so many ways to make so much money right now I have no idea what anyone is thinking sinking new capital in Manhattan real estate (unless you are so unGodly rich you just don't give a crap, which is apparently true for some people)...

20% is easy. Go for it. You should start a Hedge fund. If you can guarantee all your investors 20% return year over year you'll be managing a trillion in a short period of time. Yeah Baby!

jnetter
let me understand that you're proposing that people leverage themselves to buy something else real estate related that has a chance of default instead of buying manhattan real estate?

Just because its a government agency doesn't mean you can't lose your investment right? If it was that safe, it would be tracking near treasuries no?

http://www.bloomberg.com/apps/news?pid=20601087&sid=a98ueCVPvZUY&refer=home

spunky - you see Amex today, and COF yesterday? Like I said, a complete debt problem that involves HELOCs, credit cards, auto loans, option arms, cofi/cosi, neg amortizing loans, etc..We have only thus far seen the effect of defaults of subprime, not alt-a or prime although those defaults are rising. Facts spunky. Not talk. Now, Amex says credit card problems are expected.

I know you are overexposed to NYC real estate and as such, like to take a bullish stance and spin all this bad news your way: like when you said we are up 145 points AFTER an 11% correction! That is simply hilarious to me. Denial is a dangerous thing!

Cadwalader laid off 35 attorneys in their structed finance group yesterday. Rumor has it that they neglected to inform the attorneys, who found out when Cadwalader issued its press release. Classy. As late as October Cadwalader had insisted that NO layoffs were forthcoming. Now they are apologizing, but they don't see the business returning in the foreseeable future. There are a bunch of rumors out there that some other firms have been quietly telling their associates that it's time to move on. Usually M&A work takes up a lot of the slack in times like these, but with the liquidity issues I don't know how many companies are going to be in the position to purchase (although Berkshire has cash around, it can only go so far).

BofA buying CFC. Wow, talk about a deal that has to be one of two things: stupendously stupid or incredibly unethical (rumors of a potential deal with regulators).

Consumer Confidence Sinks to Record Low -- Check

urbandigs, what is your take on the fed's opinion that there won't be a 2008 recession and their plans to manage an appropriate stimulus package? Certainly not a silver bullet and it won't solve the all the issues you have highlighted, but doesn't it give you some confidence that a downturn will not be as pronounced?

Also, why do you think posters with a different opinion are in denial? I don't think anyone has denied the issues or your analysis. I think the debate here is what the outcome will be, not the cause.

I think spunky is in denial..not anyone else. Hmm, I think the fed is behind the curve. It is an election year so you will see plenty of political window dressing in terms of sponsored plans by current administration and stimulus packages by the runners' administration. But those will bring very short term jolts for confidence, and not much real solving of the problems we face. Yes, depending on the plan it wil give me some confidence, but I am deeply concerned about the breadth of the problems and that trumps everything.

The outcome? A breakdown of the financial system and a doozy of a recession at a time when we have commodity inflation. So, asset deflation with commodity inflation. As fed cuts, commodity inflation soars, and I dont think it will prevent the asset deflation. That has to solve itself over time. Certainly a very complex situation that we have not dealt with for a looong time.

JuiceMan - it doesn't matter too much what the Fed thinks or even what they outcome is - it matters what consumers/home buyers think NOW and for the next 12-24 months... They see falling home prices across US, layoffs on wall street and elsewhere, a credit crunch etc. Consumer confidence is now at a record low. If the Fed is correct, confidence may rise and home purchases may begin, but that will take a long time to correct...

Urbandigs I am not in denial I, like you ,listen and read a wide variety of economists views, forecasts, predictions, etc. As you know it was only about 3 months ago you were very very bullish on the Manhattan Real Estate Market. You've decided to change your views on the Manhattan RE market over the past 3 months. No one criticized you and if they did well you have the right to change your opinion. You appeared to be in agreement with the bullish sentiment on this board as per your analysis back then (see link below). Your analysis was after the subprime news. I think your major focus was on Manhattan inventory supply. I do respect your right to your opinion 3 months ago and I still respect your opinion today. I also enjoy reading your views.

http://www.urbandigs.com/2007/09/media_appearance_ch_4_sunday_8.html

first, off that video was taped mid September. Manhattan inventory was very tight, prices were holding and the seasonal slowdown only just started to begin. And going back to that time, everything I said was true as confidence was MUCH MUCH different back then both in terms of credit crunch and stock market wealth effect! Time & Place my friend.

Where I was wrong was when I said you wont see any significant downturn until you see reversal of inventory trends. I think prices have come down in past few months, even as inventory declined at same time.

I even talked about the PSYCHOLOGICAL EFFECT of the credit crunch, which if you go back 4 months, was pretty timely. I also questioned the bonus season and what will happen WITH the bonuses. I also discussed an Inventory build possibility for bonus season. Seriously, I dont see how you interpret that interview as VERY VERY BULLISH:

I w3as right on:

1. foreign buyer that are speculative flippers? Not buying into the
2. starting to see psychological effect?
3a. inventory for next 4-6 months to not build BUT...which it didnt, it shrank
3b. inventory to start to build in bonus season? yet to see as we are here right now!
4. what will happen WITH the bonuses? How will the be spent?
5. 6-12 Months --> recession, jobs concerns
6. following bonus season to be weak

I was wrong on:

1. Next 6 months I see health due to tight inventory (relating price to inventory too tightly)
2. expect up market in 6 months (market has shown weakness from 3rd qtr to 4th qtr)

Again, I think it was clear that for the very near term I saw health due to lack of inventory, but expressed caution with confidence, recession, jobs, following bonus season, foreign buyers who helped keep inventory so low future resales, etc? You must take that interview in context and that at that time, there was much less worry than there is today!

good point buster2056, I guess I have more confidence than most in our country's ability to navigate this mess without serious damage. To your point, there are many more people out there that think the world is ending and that is what will drive the market.

Thanks urbandigs. I'm not overly concerned with inflation, I think we have some room. It certainly will be an interesting year though. Look forward to reading more.

I thought the interview was at the end of September. Sorry. Okay, I understand. I apologize for interpreting that interview as Bullish. My bad.

Consumer confidence is not at an all time low. In fact, it is a great deal higher than it was in 3 of the last 4 recessions (1980, 1983, and 1991) and right about where it was during the last one (2002). Also, consumer confidence has been lower than the current level twice since the recession in 2002 (in 2003 and late 2005, when the macroeconomic outlook was generally positive.) Though I supoose it will go lower.

Not suggesting this does or doesn't relate to NY real estate, just pointing out that people on this board consistently misrepresent facts to suit their arguments and mostly discuss their outlook at a level of superficiality that is often beyond belief, aside from urbandigs (most of the time). I happen to think he is wrong but I enjoy his posts a great deal. That is all.

Sept 21st they had it on their site, was done a few days earlier. Not that that makes any difference. Also, they did edit out a lot. I recall going into the mbs side of the credit crisis and the threat to banks, but they cut that out. At that time, I did NOT think things would unravel as fast as they did.

Consumer Confidence is at a record low according to the RBC Cash Index which was started in 2002... Not purposely trying to misrepresent facts and should have sourced it, however, it's a big reason why the market fell today and just assumed people were familiar.

Wow, the shi3tstorm is REALLY brewing up in Wall St... and we didn't even get to the earnings of Citi et al yet.... that's next week.

Even I am a little worried now... I want a recession, which is normal and part of the business cycle to clean out inefficiences generated by excess greed, but not a freakin collapse outright. This is not looking good at all.

Gee why would you make a statement like Consumer Index is at an all time low and use an index that started in 2002. Why wouldn't you use the Consumer Confidence Index?

Buster still selectively ignoring real data points to prove your point.

Funny, spunkster... The RBC Cash Index is a widely used indicator, and it's record low was a top financial news story all day. The fact that it is at the lowest level in 5+ years is quite a real data point. The fact that the dow went up ~1.5% yesterday is not.

I must confess that I put the bears to shame (well, maybe Roubini competes). Four years ago I tried to grasp where all the money was coming from for this HUGE development craze, and where the money was coming from to buy the results, and it just didn't add up. I've been one of those basketcases who has been claiming that something's stinky in Denmark for four years. I've had bankers, lawyers, real estate professionals and lay people tell me that I'm crazy and that, first, the US market was fine, and then later, that the NY market was not only fine but the most unique damn market in the whole damn world (like Tokyo and London don't have supply issues).

MMAfia, I worry. A market created largely by free and unregulated money is a very scary thing. I probably personally would benefit from the destruction, but what it will do to our society is possibly something truly awful. Then again, the cynic in me thinks that maybe the average person has learned from Trump: Bankruptcy doesn't matter. It will in the short term, but banks really love to hand out money, and if in the next three years so many people have so-so credit do you think they won't find some way to overcome it? Hell, it may even be legislated (resolved: let the common individual who has been defrauded by the evil CFC and others have their credit histories erased).

Interestingly, Roubini has predicted that Manhattan housing prices will decrease 10% over the next two years. I am not sure that this is such bad news for those of us who are buying a place to live, and intend to stay there at least five years. Seems like most agree that the market will turn around by 2010 if not earlier.

http://online.wsj.com/public/article/SB119638554201808816.html?mod=blog

I agree Will that some affordability would be nice. I'm not sure that the market will truly turn around by 2010. 2012 or 14, yes, absolutely, well probably if the city does something, anything, about school spaces. Smaller apts. will probably recover sooner.

That's interesting. I always thought that 2 and 3 BR are the strongest end of the market since there aren't as many of them.

3 bedroom and larger are the ones that are in shorter supply and usually sell for considerably more per square foot.

Well, there's been a tremendous amount added to the market and it will continue or the next two years. And we don't have nearly enough school spots to support the space so we shall have to see. Think the Rushmore, etc.

If there is to be a down turn (big if?), it probably won't impact ultra premium buildings like the Rushmore, where if you could afford to buy there you'd have no problem affording private school and sending them there in a limo. Rather it would probably more likely be felt in more downmarket projects like 10 West End or the Link that are in fringe areas and really lousy school districts.

I just recalled another project that is the an even bigger joke than 10 West End, and that is the Platinum. You gotta feel sorry for the suckers who bought in that lame project!!!

Who are you calling a sucker? :-)

http://www.nytimes.com/2007/09/23/realestate/23deal2.html?ex=1206417600&en=58ac4e290a95cec9&ei=5087&excamp=GGRErosie&WT.srch=1&WT.mc_ev=click&WT.mc_id=RE-S-E-GG-NA-S-rosie

will why are you surpised 99.999999999999999999% of the people on this board are praying and wishing for Manhattan RE prices to go or for that matter to collapse . They also feel anyone who owns any property in Manhattan is a Sucker.

Hi Spunky. I really am a little bit surprised since I thought the board was largely composed of brokers and other real estate professionals who make a living out of a thriving Manhattan real estate market.

The people who benefit from a downturn are (1) those waiting for a downturn so they can get a better price on a new home -- understandable, and (2) vulture capitalists hoping to drive things down and then buy them up -- disgusting but I know they do exist.

Yes they do exist and sometimes they can disguise themselves as brokers but who are actually investors as well. Ever watch Wall Street. One famous line by the broker when Bud Fox wanted to sell his apartment the old crabby broker told him "AINT NOTHIN MOVIN BUT THE COCK-A-ROACHES!" She of course told him this soon after she sold him the place and said the market was real hot.

>> FOREIGNERS MUST BE FOOLS TO INVEST IN NYC REAL ESTATE RIGHT NOW <<
They're the last money in, the dumb money.

By the way, the pound is steadily weakening, even against the dollar. Not to mention a steadily deteriorating British economy. So much for all those British buyers.

Here's a little more reality for you:

“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.”

In the view of many analysts, the economy is now in a downward spiral, with each piece of negative news setting off the next. Falling housing prices have eroded the ability of homeowners to borrow against their property, threatening their ability to spend freely. Concerns about tightening consumer spending have prompted businesses to slow hiring, limiting wage increases and in turn applying the brakes anew to consumer spending.

Not everyone is convinced that the American economy is headed for a recession, defined as six months of economic contraction. The economy often serves up indications of distress that later turn out to be false warnings.

But some economists think a recession may have begun in December. In the last two weeks, there have been signs that a substantial downturn may already be unfolding. The Labor Department reported a sharp slowdown in job creation in December. Retailers said that sales last month were extremely disappointing, capping the worst gain for a holiday season in five years. A widely watched index showed manufacturing slowing, despite a weak American dollar that has encouraged growth in exports.

The construction of new homes has already fallen by some 40 percent since the peak in 2006. The sales of new homes have fallen even faster, suggesting that a large oversupply of places to live will continue to drag down prices.

Home prices have dropped by about 7 percent since the peak in 2006, but some experts suggest they could fall by another 15 to 20 percent before hitting bottom.

“There is still a long way to go,” said Nouriel Roubini, an economist at the Stern School of Business at New York University and chairman of the research firm RGE Monitor.

Mr. Roubini has long predicted the real estate downturn would cause a severe recession. He envisions foreclosures accelerating this year, and banks counting fresh losses. That could make them less able to lend and further slow economic activity, not just in the United States but around the world.

“We’re facing the risk of a systemic financial crisis,” Mr. Roubini said. “It’s not just subprime mortgages. The same kind of reckless lending has been occurring throughout the financial system. And it’s not only mortgages: Now it’s credit cards and auto loans, where we see problems increasing. The toxic junk is popping up everywhere.”

Faustus, I think we are all in agreement with that article you posted, even those who won't admit it. The only question is when (or if?) it will affect NYC. It is amazing that apartments are still being listed in Clinton at over $1,000/ft right now. What gives? Is Manhattan impenetrable? I understand that nobody knows the ultimate answer, but maybe Manhattanites can just wait out the whole cycle without ever lowering a offering price. I'm actually starting to believe. Can someone talk some sense into me, or am I on the right track?

Pops - it's all about inventory. There's this bizarro argument circulating that, while many sellers elsewhere in the world need to sell their properties for one reason or another, sellers in NYC never really NEED to sell. In other words, the reasons why sellers sell elsewhere (buying another place, need for cash, relocation, financial concerns, outgrowing their current apartment, death) don't apply in NYC. Which is absolutely ludicrous. Two things can happen - as demand declines and buyers pull back in NYC, either prices will fall or inventory will build. Either way, prices fall sooner or later.

“Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.”

faustus, I think this is a key point. Most of what you posted above is true, however the key to this debate is how long, and how pronounced a downturn may be. Couple that with Pops's point about how all of this will affect NYC real estate, and you get a reason to be confident that things (in NYC) will be ok.

Look, if things continue to go bad and the fed reacts (which they have already said they would do) and the economy begins to turn at the end of 2008 or beginning of 2009, that gives us 12-18 months for a potential downturn. That is a short amount of time. Couple that with the fact that sellers will hold on to their places as long as possible if they HAVE to sell (inventory is everything here as you mentioned), the fact that the market today is not weak (I have seen numerous examples of a strong market for good properties in good neighborhoods), and the fact that Manhattan real estate will dip less and bounce back faster than anywhere else in the country, it would be naive to think that Manhattan real estate is in for a long, rough patch. You will not see quality West Village and Upper West Side (and other great neighborhoods) properties correct by 10-15%.

Pops, I think this is the answer to your very insightful question.

” FOREIGNERS MUST BE FOOLS TO INVEST IN NYC REAL ESTATE RIGHT NOW”

Faustus, you are basically saying that anyone that invests in NYC real estate right now is a fool, why would it be any different for foreigners? You are wrong. Anyone with a time horizon longer than this year will be happy they invested in Manhattan real estate. This downturn will be short, and even shorter for Manhattan real estate. You can continue to post about all of the issues facing the economy, but fact is if you are waiting to pick something up on the cheap, you will be disappointed.

Juiceman -

Absolutely, foreigners are the last money in and are dumb money. The condo market has the feeling of a classic Ponzi scheme right now. In other words, condo prices have no relation to underlying economics, but are built largely on speculation. No, prices won't collapse by 50%, but as demand softens both locally and internationally, it will affect prices here. 10-15% is a no-brainer.

As for coops, the price declines are already happening in earnest. Juiceman, spend some time looking at the price reductions on this website and you'll see how much they are accelerating. This will continue. The real test is whether this generates matching demand or just exacerbates.

As for your comments like...

"if you are waiting to pick something up on the cheap, you will be disappointed" (ooh, very threatening!)

"I'm curious to see what "experts" will come out of the woodwork predicting a recession / all around meltdown now. Surely we can't argue with the chairman right? I thought we were already in a recession?" (just read the paper, chief)

"I'm not overly concerned with inflation, I think we have some room." (okay, good to hear you think we have some room.)

it all just sounds to me like wishful thinking.

faustus:

The only wishful thinking I've seen on these boards in past years is (ro repeat my initial post)-

"Dow below 11,000 by the end of 2007!!"

"Housing market down 20%! - no - 30%! - no - 40%! - no - MORE! - by the end of 2007!!!"

"The subprime/Alt-A debacle would tank the Manhattan real estate market FOR SURE in 2007!!"

"A bad bonus season would tank the Manhattan real estate market FOR SURE in 2007!!"

"High inventory would tank the Manhattan real estate market FOR SURE in 2007!!"

"Manhattan real estate sellinmg for fifty cents on the dollar by 1 January 2008!"

It's the same hue and cry these people made in 2006 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2005 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2004 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

It's the same hue and cry these people made in 2003 when they said it was the end of the road and that real estate prices in Manhattan would collapse.

Oh - but wait - now it's goona be late 2008 or maybe EARLY 2009 (!!).

THAT'S wishful thinking, faustus!

As I also said above "...I don't know if even I'd buy right now, unless a very special property came up that was a rare and unique opportunity, and I was a fully informed buyer and sanguine about the current state of the market, and I was not buying to flip but to live there with a long(-ish) time horizon..." But to say all foreigners are fools with dumb money and that Manhattan real estate is all a ponzi scheme compleletly built on speculation - well, it just sounds like you're angry about something else. To infer that every wealthy person buying residential real estate in Manhattan (foreign or not) at this point in time is dumb, stupid, uninformed, foolish, and just happened to make their money by sheer luck but doesn't understand any of the underlying risks involved is REALLY what sounds like wishful thinking to me - and plain green jealousy!

Calm down, faustus. The truth for myself (and I think for many other reasonably well off Manhattan real estate owners) is that I love my Village condo, and if it goes down in value by 0% or 5% or 10% or 15% or 20%, I really, truthfully don't care. It's my home. Whatever money I've put into my Manhattan pad (both in terms of purchase cost and redesign) I don't even count as part of my net worth - it doesn't even enter the equation. So my pad can go up another 20% in value, down 20% in value, or whatever - it truthfully doesn't matter to me. It's my HOME, and I bought it because I love it, and I could afford it, and it's not something I look at every day akin to an investmnent vehicle where I care if goes up or down in value. It doesn't matter to me. And my guess is that this is the case with the broad majority (but by no means all, of course) of people in Manhattan who own places south of 86th Street (to pick an arbitrary dividing line).

Having lived here trough the last 89' - 93' real estate recession, I can tell you this to be true.

Although the tone of malraux's original post is totally distasteful, I think that the reality of his outlook on owning his place is healthy, and common. I think a lot of us, myself included, are first time home buyers, but not your usual first time home buyers. We aren't 23 years old and married with a kid on the way, and at the beginning of our careers. We are wealthy, liquid, informed, and talented professionals at or near the peak of our careers, where we realize that the correct entry point can make a world of difference when we are talking about an asset class that can arguably be at the height of a bubble, and totally overpriced. We have made the decision to rent as the alternative to buying for some time now, and it has not been a decision that has worked in our favor. To reverse our decision, and "zig" now, right before the market zags, could be detrimental not only from a financial standpoint, but from a psychological one. In the back of my mind is a constant thought: "How long do I really want to live in this freezing cold, dirty city?" The years keep passing and I can't bring myself to leave, but its gotta end sometime, I can't stay here forever, right? Anyway, I love arguing on this board with you guys, and I actually find it therapeutic to a certain extent. Its the only way we can "yell" at the market. I just really do hope that we see some sanity come into the picture for a change. I hope the wishful thinking I am doing works, and that the wishful thinking all the sellers out there have with their offers doesn't. Its not schadenfreude, its being on the other side of the market.

malraux - don't worry, I'm quite calm, but thanks. As for all those quotes you've cited and refuted, well they're not mine but knock yourself out anyway.

I think my point, malraux, is that it's already softening and that near term the downside risk is greater than the upside potential. The economic trends aren't very sound. You don't have to be jealous or angry to realize that!

As for foreign money, it's a simple fact that the underlying economics don't support prices. Period. This applies especially strongly to luxury condos. Is it possible that foreigners (and wealthy looking for trophy properties) will continue to bid each other up in the luxury condo market into eternity without caring about underlying economics? Maybe, but other luxury goods (Tiffany, etc.) are slowing down now, so who knows.

Look, you're in it for the long haul Malraux and that's fine. If you don't mind price fluctuations, that's good for you. Then you shouldn't care one way or another, which makes me wonder why you're here, unless you're actually looking to sell or are a broker. For people looking to buy, however, it does matter if they think they'll be able to buy for less in the future. It also matters if they don't expect to be in their next apartment for long. Then they need to do a rent/buy analysis.

I can't tell if you're in the "it's always a good time to buy" camp, as many on this board are. Just understand that in any market, saying "it's always a good time to buy" is ludicrous.

As for your comment that "this is the case with the broad majority (but by no means all, of course) of people in Manhattan who own places south of 86th Street (to pick an arbitrary dividing line)", let's suppose that you're effort to assess the mindset of the greater populace is true (as funny as that is). Why would the mentality be any different in any other city or part of the world? Don't people all over the country love their homes? That's very nice and all, but it doesn't mean markets don't go up and down. The new argument: "NYC is different because people love their apartments." Heady stuff.

NYC is different because people make a lot more money here then in other cities. The average income for a true buyer in Manhattan is far, far higher then the incomes of the struggling local real estate economies in say Florida and Southern California. I believe that since it is such a large city, the median and average income for NYC is severely disguised. As long as there are high paying jobs, this is what you'll continue to see. If you want to move to Florida, you can... but generally speaking you'll most likely be taking a huge pay cut as well because there are much fewer high paying jobs. Then add the foreigner interest to boot (I know people here contest that, but fine).

I think reasons for buying are important. Not sure it makes sense to buy a place right now to invest or flip. But even if the bears like Roubini are right, and the market declines 10% over the next two years, it will likely go up again in the next 3-5 years. So if you are buying a home as a place to live, making the investment right now or 12-18 months may not make that much difference.

I'd suspect that most people buying a place in Manhattan now will be in higher tax bracket 3-5-7 years from now, or longer, when they want to sell, so a slightly higher basis could somewhat offset things from a longer term federal income tax standpoint.

All this is to say, absent a huge downturn (I would define as more than 15-20% over the next 2 years), which even the bears on this board concede isn't going to happen in the next two years, there a lot of factors going into buying a home you plan to live in for at least five years.

I'd venture to guess that those wait may get a better price in a year, but as others have acknowledged there's been some stealth softening going on for the past 3-4 months in many sectors of the Manhattan RE market so could be it's a good time for prospective homeowners (as opposed to investors or flippers) to go out and bargain and not wait for a crash that is never going to happen.

Re the national economy, it's an election year and with a Democratic Congress and Republican President, all have a motivation to work out a stimulus package with targeted tax cuts and some spending. Add to this a Fed rate cut of a half point at the end of the month and the economy should be in stronger position by the middle of the year. This will undoubtedly impact the financial services industry on Wall Street. For what it's worth, I'd predict that any downturn in Manhattan RE will be very mild, with a couple of rough quarters, some flatness and slowly increasing prices in late 2008, early 2009 and then things move begin more quickly again in late 2009 early 2010.

Just because the doomsday scenarios regarding manhattan housing prices haven't come to pass in the last five years shouldn't give the bullish proponents of the current housing market much comfort. In fact it should make you even more leery. I heard plenty of investment professionals and taxi cab drivers that used the same arugment for the NASDAQ in 2000 after several years of unrestrained enthusiasm. Last I checked eight years later the NASDAQ market is still trading at less than 50% of its peak. I'm certainly not comparing the Manhattan real estate market to the NASDAQ, but faustus is right that over time those crazy fundamentals such as price/rent ratios, employment growth, etc. matter and that the further that prices divert too far too the right, the greater probability that the market will correct itself (and the greater chance that it will be a long correction). It still might not be for awhile (although it seems like the market is much softer than it was six months ago even now), but I think erring on the side of caution is probably the right path. My two cents (and its probably not worth more than that).

Will, I disagree. Turning the clock back 2-3 years price-wise, and taking prices back down 15-20% (is that about right?) is not a "huge" downturn. I think huge, if we get it, is 30-40%, so that we get back to 500-800/ft., depending on the area and size of the apartment. Also, you should keep in mind that there is obviously a good chance that Fed rate cuts have little to no effect on the economy at this point, and that mere talk of a stimulus package is not going to have a positive effect.
Its more than ironic (some might call it stupid) that at the heart of all of this recession talk is the fall out in the real estate market. And here we are arguing that it may not have an effect on, get this: the real estate market. Its laughable. If we do see a correction here in NYC, no one will be able to say they didn't see it coming from a million miles away. Okay, maybe one or two of you can say you were tricked by the foreign money argument. But the rest of you will have no excuse.

Pops, the RE bubble started to burst nationally in mid-2005 and RE in Manhattan continued to boom. Manahttan is different.

I would agree that the national national situation will have an impact if there is a recession, though as you pointed out or at least implied in an earlier post, things seem to be holding steady. My sense is there may be a modest to moderate decline over the next year or so, but there may be some other factors at work (the election, the Fed, etc.) that can keep something more like the status quo just in the proverbial nick of time.

My major point in my post was that it does make a difference if you are buying RE in Manhattan for a short term investment or as a place to live. I'm not particularly bullish or bearish. We could have some rough quarters ahead, but I think in a 3-5 year time frame today's buyers should be fine.