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

eah - "If a dirty bomb was dropped, I would sit and ponder the situation, I'd buy."

I wouldn't. I'd be getting out of here quick smart. I could quite possibly be in the market for your property in Malaysia. If I own a place when the dirty bomb comes I'd love to talk about a property exchange.

The place in Malaysia is rockin' so I would not sell it. Might get washed away by the next tsunami but 'till then me and the Japanese/Chinese will enjoy it. And the Intel expat workers. If you do buy there, contact HSBC first - they underwrite many of the new developments.

Spunky - AGAIN, you ignore that I do acknowledge that publicly. Damn man, at least read what I say before coming to your incorrect statemens about what I say!

http://www.urbandigs.com/2008/01/manhattan_inventory_trending_h.html

"The purpose of this is to simply report on the rise, to state that it is completely normal for inventory to rise at this time of year, and that it will probably continue to rise as more listings come to market. The key factor in my mind to watch out for is sales volume as an indication of buyer confidence given the current macro environment and stock market selloff as a result."

Noah - this is a serious question: You have a serious buyer, say one that is looking for a place between 1-1.5. They are about 35 and looking for a two bedroom since they have vague family plans. But when you see their income statements/savings you know they would be close to the margin. Do you advise them to look in a lower bracket or assume they kow their situation and carry on showing them in their requested price range?

eah - thanks for raising bar here. 100% absolutely I will tell them that I am either a bit uncomfortable with their liquid assets leftover after closing and/or that with their combined salary's the anticipated debt/income ratio is higher than comfort level! I would explain that if anything changes in their life/job, it could make the property unaffordable, affect their lifestyle, and put them in a position where they may have to be forced to sell their property in a timely manner; a situation every potential homeowner should try to avoid or they will lose $$$ on the investment.

In 2007, I must have had this conversation with over 15 potential buyers that asked for my services and said they can't afford to buy what they think they can afford to buy! So many out there that don't even know what they can afford; scary actually! And these guys are going for less obtrusive condos cause they cant afford anything more than 10% down, and after closing they will have some 1-3 months of maint + mort leftover and they were comfortable with that.

A few said they still want to go ahead and do it, but I told them I just dont feel comfortable working with them, as even if I submitted a bid for a condo with their financial statement, the seller broker would likely say its not good enough to warrant consideration by their client.

And the potential buyers asked their parents for money... funny/sad but likely true!

OK--I can respect that. It's the way, over the long term, to build a repuation.

spunky, stop wasting your time, get out of your MER and C while you still can and put the money in cans of spam.

oh oh MER and C must of went down today since zizi is back all of a sudden

JuiceMan - I agree regarding your psychological impact comment. I have no idea how to quantify its magnitude – it could well be significant. However, any imbalance that’s not backed real economics eventually rights itself. If the psychological impact is so great that it causes a rush of activity and further rising prices then it only serves to make Manhattan RE prices look even more expensive compared to other assets classes.

Urbandigs made the point about this change attracting people to the market who just aren't in a position to buy real estate. I agree with him totally that the government has to stop with this kind of behavior and just let the system purge itself.

If people come into the market because of this change that otherwise would have stayed out then it only serves to further weaken the investor base with people who should never have been participants in the first place. At a time when the existing investor base is facing job losses and income cuts coupled with an economy in recession this only serves to inflate the bubble.

I’m still leaning towards it having little effect – with any uptick in prices due to the physiological effects just something that needs to be undone later.

FYI - strategy worked with new dev! That comment was removed so those who got sucked into this thread should know what I mean here.

When you say worked does that mean they accepted offer at 1% below ask and will pay closing costs ?

dont you know me streets? email me and Ill tell you

As for the JUMBO limit being raised, a commenter on urbandigs makes the most valid point regarding it:

"WHO BENEFITS?

1. If you are buying a $500K apartment or less, this has ZERO impact. Why? Because the max mortgage on a $500K apartment is, say, $400K now, which is already conforming.

SO THIS LAW DOES NOT BENEFIT BUYERS OF APARTMENTS THAT COST $500K OR LESS!!!!

2. Now... supposing the limit is raised to $730K, for a normal borrower (20%) this gets you just over $900K.

So - the TARGETED HOMEBUYERS AFFECTED are really only those buying apartments between $500K and $900K.

Is that really 60% of the market, Steve?

I didn't think so.

Hopefully this helps you understand. Buyers of apartments $900K unless they are willing to put up a very large down payment."

Actualy, what is the 'sweet spot' of the market for Manhattan residential real estate, say, south of 86th?

You all are crazy. Buy if you want to. Don't buy and continue to rent if you don't. NO one knows what will be the right choice 1 year from now. Personally, I think that inventory is rising and that fact coupled with the realization of bonuses going from 50% to !00% decreases (in the CDS markets), along with layoffs across the board in fixed income, along with a bubble that can't be supported by stimulis or monetary policy, will lead to lower home prices in Manhattan in the very near future. Not 1 to 2% btw. 50%. Yes, i would bet it all that's what you'll see. AND by the way, I am big believer that the US has hit a bottom in real estate. There is no doubt that lower interest rates and the package will help where values have come down. But we haven't seen ANYTHING. It will hit us worse. I am a renter. I am not bitter, but I do feel a bad mistake was made on my part about 6 years ago, and the way to make it right can't be to buy now. Any rational people in the same camp?

Your comments make sense but as you you said NO one knows...it just makes sense that Manhattan real estate will be hit soon how hard and when will be interesting.

Interesting article from CNBC on US talking itself into a recession...

http://www.cnbc.com/id/22842552

Are some people on this board trying to talk down NYC housing prices?

"lower home prices in Manhattan...50%."
"AND...US has hit a bottom in RE...no doubt [] lower interest rates and the package will help."

You're gonna get a few responses that that dmag2020, I bet. I personally find it odd you conclude the national RE market will now improve while NY values will crash 50%. I don't think anyone has come up with that one before. If NYC home values fall 50%, the nation better brace itself because it would mean broader markets were coming apart at the seems. Let's see what everyone else thinks. They aren't a shy, quiet bunch on here.

Kylewest, I totally agree with you. Anecdotally, I went to two open houses last week and while they were not "packed," I did notice a steady stream of people coming in, and waiting to talk with an agent. Also, the home stores (Home Depot, Janovic, etc.) have been packed, and every contractor I have talked with about doing some renovation work has been backed up. So to the extent I can believe my own eyes, as well as reports that properties in Manhattan are still selling briskly, things still look strong.

There may be some stealth softening of prices, and definitely it is more of a buyers market, but seems like any declines will be mild. Even one bearish NYU prof (Roudini?) says 10% over next two years which would not be awful. And the bearish Urbandigs has said "no crash." (i.e., any decline will be less than 20%.) I'm more optimistic than the professor and Urbandigs. I just think that there are enough counterfactors out there to keep things strong and minimize or possibly avert any decline ("Manhattan is different," federal stimulus package, lower interest rates, etc.)

"seams," not "seems" in my post above. my bad.

Econ 101:

Federal stimulus package => fiscal policy has never staved off a recession. The lag is too long. Recgonition lag Decision lag Implementation lag Effect lag => the fiscal policy benefits kick in long after the recession is over. Federal stimulus package = political stunt.

Lower interest rates => it%u2019s lower federal funds overnight rates. It%u2019s the rate at which banks (AA rated institutions) will lend to each other for one night. It%u2019s not the rate you will get on you risky 30 year mortgage. The yield curve is now steeper as banks go back to the traditional way of making money %u2013 borrowing short and lending long. There is a huge risky spread today on anything to do with housing. Combine the steeper YC higher risky spread and you do not get lower mortgage rates from a lower fed funds rate. We had a 75 bps cut in fed funds at the start of the week and 30 year fixed rates are unchanged for the week.

Upping the FNMA and FNMC limit from 417k to 700k => almost useless. See my post above.

These are the 3 most common arguments we see here from people arguing for higher RE prices in Manhattan. If you see something on Fox 5 don%u2019t automatically assume it%u2019s effects are obvious. Buy a book and do some analysis on it. At least read something on Wikipedia !

REPOST OF ABOVE WITHOUTALL THE %u2013 STUFF

Econ 101:

Federal stimulus package => fiscal policy has never staved off a recession. The lag is too long. Recgonition lag + Decision lag + Implementation lag + Effect lag => the fiscal policy benefits kick in long after the recession is over. Federal stimulus package = political stunt.

Lower interest rates => it’s lower federal funds overnight rates. It’s the rate at which banks (AA rated institutions) will lend to each other for one night. It’s not the rate you will get on you risky 30 year mortgage. The yield curve is now steeper as banks go back to the traditional way of making money – borrowing short and lending long. There is a huge risky spread today on anything to do with housing. Combine the steeper YC + higher risky spread and you do not get lower mortgage rates from a lower fed funds rate. We had a 75 bps cut in fed funds at the start of the week and 30 year fixed rates are unchanged for the week.

Upping the FNMA and FNMC limit from 417k to 700k+ => almost useless. See my post above.

These are the 3 most common arguments we see here from people arguing for higher RE prices in Manhattan. If you see something on Fox 5 don’t automatically assume it’s effects are obvious. Buy a book and do some analysis on it. At least read something on Wikipedia !

http://www.urbandigs.com/charts.html

Dmag, I would usually make a smart ass comment to someone predicting a 50% drop in Manhattan real estate, but instead, here is some advice. Do with it what you will.

You are either very young and panicked about your first recession or you have absolutely no clue about how markets work. If it is the latter, spend some time reading posts from a number of well informed folks on this board (will, Mel, kylewest, urbandigs, TheStreets and many others) to educate yourself on market forces. You can learn a lot about what it takes to tank a market (for free) and understand why a 50% prediction may be a bit off.

If this is your first recession and you are a bit nervous, have a read of Alan Greenspan’s book “Age of Turbulence”. It is a high level view of the ups and downs of the American economy, what issues we faced over the last 30 years, and how this country navigated each storm. It isn’t a work of art, but it may give you some confidence that down periods are quite normal, and that everything will eventually be ok.

"Are some people on this board trying to talk down NYC housing prices?"

Yes, and urbandigs is the drum major

Why can it go up 100% but not down 50%?

Sorry - up 400%.

It is POSSIBLE for the RE market to go down 50%, but in order for that to be happening, things have to be occurring in broader markets that are unprecedented and would indicate an economic crisis of crippling dimensions across the nation if not the world. It is worth noting that the increase in RE market values of 400% as you say took place over many years--not a 12 month period. So to say down 50% in a year since it went up 400% is basically crazy talk. (Frankly, a run up of 400% in a year would be equally disturbing and suggest terrible things were happening in tandem (for instance, that inflation was spiraling out of control like a third world nation). A 50% reduction in a year for NYC real estate would doubtless mean defaults on unfathomable numbers of loans, financial institutions failing, unemployment of depression-era proportions, out of control stock markets unlike anything we've ever seen, population shifts indicating a sea-change in life as we know it in NYC... I could go on. You can't just cough out numbers and percentages in one market without understanding how all this is interwoven. You aren't talking about a correction when you say 50% within twelve month. You are talking about a kind of economic armageddon. Down 5%, 10%? Very possibly. 25%+? We can talk, although the higher the number the more I disagree. For an economy to backslide for as many years as it took for the suggested 400% increase to take place would reflect an unimaginable condition of the world around us. That is why some statements on here suggest the people making them fail to appreciate the complexity and texture of the issues involved.

And FWIW, I don't come at this from a bullish perspective on the current state of the economy. But while I believe RE prices will slip in the coming months (and probably already are), I don't think we are on the eve of an economic apocalypse.

You never know.

Juice, hey, I've been around for a couple of the downturns. I don't always disagree with your advice, but sending the sheep to read the Greenspan wolf's works seems a bit much. (Although I will confess that given my general proclivities, I haven't read the tome, but..) I'm afraid, however, that however you slice and dice, the pie just is so many times less than the investment. 1 trillion in cds, what's the estimated book value? Everyone talks about a bail out. But of what? (Oh we know of what). And of how much (should it really be so centered on the people, how about the builders?)

dmag2020: “You never know”

Correct, but if we really are facing an economic apocalypse then you will be a lot more concerned with buying bread than buying an apartment.

50% would be a move of epic proportions. When you’re faced analyzing something like this, where there are a lot of forces acting in different directions and of questionable magnitude, the best thing to do is look for comparative data to get some bounds on the problem.

When analyzing the potential size of a RE price drop in Manhattan we are in the unique position of having lots of data from a very recent RE price crash in other US metro areas.

From Aug 06 (the peak) to Nov 07 the S&P/Case-Shiller composite price index fell 6.6%
It lags by 3 months so Aug 06 to the end of 07 might be something like -10%.
It’s a composite of 20 metro areas across the US.

If we look at some of the worst hit single city indices we see Miami is down -13% and San Diego -13.3%

Some of the more negative investment banks are predicting price drops nationwide of 15% in 2008 and 10% in 2009. Let’s say Miami realizes those returns in that time frame. Then it would be down 35-40% peak to trough over 3 or 4 years.

When you consider Manhattan’s unique situation, any price drop will almost certainly be less than this 35% number. (By unique situation I’m talking about much higher owner occupancy compared to Miami, hefty co-op equity rules, wall street, long running low inventory, many high net worth individuals ‘waiting’ to get in etc. etc.)

Assuming $1,250/sqft for Manhattan now, a 35% drop would put it at $800/sqft.
That’s about 10-15% cheaper than the current price per sqft in San Francisco, making 35% look like an overestimate of any correction we might see.

So 50% in one year just isn’t going to happen and I can’t see it happening over 3 years either.

I think a lot of people who are waiting in the shadows might come out if we see prices down 10% and start to absorb the excess inventory. I don’t know where my own sweet spot is exactly, but I’d find it very hard not to pull the trigger as we approach the $1000/sqft level and that’s probably not going to happen. To echo kylewest: down 5-10% over the next year is possible but you’ll never see -50% over any period.

But, TheStreets, it's not going to come down evenly across locations, sizes, etc. Parts of Brooklyn, including "super hot" Williamsburg, are already considerably down. I read something recently where selling prices (not necessarily asking) are down 15% in WB, and the article quoted a broker from Apts & Lofts, which handles a ton of WB new dev, saying "right now, my developers are open to hearing all offers," or something to that affect. I had an offer accepted 16% below ask in the East Village. It was an unusual property, OK, funky, but it probably would have gone at ask in '06. I wound up walking away after finding some issues with the building. I guess my point is that 20% depreciation seems quite reasonable without the frenzy that had people bidding high on absolutely everything. The rougher blocks will come down quite a bit even in prime neighborhoods (say Christopher Street and far West 10th in the West Village or further east in Alphabet City). Maybe Soho Mews will only come down 5% or 10% as the developers tire of carrying the unsold properties (a broker actually told a friend looking there that "these kinds of top properties always take longer to sell" - hysterical), but there's a lot of stuff a bit further out on the margins that has already softened and will continue to.

tenemental - agreed. I'm talking strictly about Manhattan. Most of the 'unique factors' I listed above don't apply to anywhere outside of Manhattan - e.g. not too many hedge fund managers want to live in Williamsburg at any price. Nothing in Williamsburg is trading at $1,250/sqft either. You can exclude most stuff north of 110th st from that analysis too. What I'm showing is why down 50% in any time frame is unrealistic. You'll always find some pockets down more than others and you'll always find unique deals, like yours, going for well below the ask. But your situation is unique - aggregate prices for the West Village are up over '07, not down 16%. When you start to break it down to finer and finer grained analysis you naturally have more and more error in any forecast. At this point I wouldn’t go any further than to say average Manhattan prices COULD trade back towards $1,000/sqft and that you shouldn't expect to see $700/sqft, or lower, as would be the case with a 50% drop in prices.

aboutready, I anticipated I would get some pushback for the Greenspan recommendation, but for a straightforward view of our past economic adventures, it isn't bad. I also thought his views on each administration were interesting. Honestly, I think if you read it, you may change your "wolf" characterization and come away with some different opinions. As for the debt, well, he would say that that is on the back of our friend from Texas, which is difficult to argue.

tenemental, fringe neighborhoods will struggle enough to flatten or pull down the overall NYC market. I think what most "bulls" argue on this board is that the better neighborhoods will continue to appreciate into 2008, and beyond. Expecting a 15% correction in these neighborhoods is highly aspirational

can we at least agree the state of the economy is in worse shape than it has been for awhile.....that wall street is more likely to cut jobs than to add......and people at ib are for the first time in a long time worried about their careers.....and banks are not as free with lending as they haave been in the past.....if we can agree to these simple things.....the notion of manhattan being different may....just may look a little bit suspect.

dmag2020, you could not be more wrong. A 50% drop in Manhattan real estate has never happened; not in the 70's, 80's or 90's. Are you telling me that prices at 15 cpw or West Village townhouses, or thew Superior Ink building, which is going for 3,000 a foot is going down 50%? Maybe we will see some substantial price drops in parts of brooklyn and queens, and maybe in some fringe neighborhoods in Manhattan might have a slight drop. The mistake that everyone makes is that sellers of Manhattan are not distressed sellers. If they lived in a co op, they did not avail themselves of exotic lending instruments, they put down equity, and they were solvent enough to pass the board. If they bout a 2,000,000 condo, they put down 10-20 percent and were able to qualify for a jumbo loan.
Lokk at it like this. The factors that led to a national real estate bubble are; subprime mortgages being given to people who were not credit worthy and who put no money down. That led to false appraisals being given, thus driving up artificially the price of housing, which led to speculation and flipping, further driving up prices. This bubble began to burst in '06, yet Manhattan continued to appreciate, and absorb a tremendous amount of inventory in the process.
The reason for this is that there is enormous demand for quality units in prime Manhattan, and when compared to other international cities( e.g. London, Dubai, Paris, Moscow etc.) Manhattan is relatively cheap. Yes Wall Street layoffs will have some impact, but not at the higher end, and not in prime Manhattan. I heard these same doomsday predictions in 05, 06 and 07. Give it a rest.

The problem isn't that Manhattanites availed themselves of exotic financial instruments to purchase property, it's that (a) the subprime crisis has dried up liquidity to all buyers - not just subprime buyers and (b) Wall Street financed the exotic mortgages for the rest of the country. Co-op sellers may not generally be distressed sellers, but it will be a lot more difficult to find qualified buyers, especially with a lot of Wall Street staying out of the real estate market. If Manhattan real estate had been generally purchased with neg am and option arm loans, then it would have started to fall with the rest of the country in 2006, but that doesn't mean that Manhattan real estate is immune to the effects of the subprime crisis and the liquidity crunch.

Correct me if I'm wrong hasn't this discussion of Manhattan RE prices dropping due to the Subprime and liquidity issues started way back in August of 07. For some reason talking about the state of economy and how how and why it will cause Manhattan RE prices to go down will continue for another 7 months without any noticeable change occurring.The only changes you will see occurring in prices are those fringe areas above 110 street and crappy apartments with no views, lousy layouts, and shabby buildings. However if it floats your boat to mental nmasturbate on how the inticacies of the economy will have a sprialing downward affect on Manhattan go right ahead.
I do hope that your economic arguments on why prices must drop will come to fruition in the West Village, GV or Tribeca. I am look to buy another investment property there.

Maybe we could hire a psychic and find out what is really going to happen. Or we could hire a group of them and watch them disagree.

I agree, Spunky. There are a lot of armchair economists here, but they fail to recognize that, sonce 2001, Manhattan has become more and more desirable, with streams of demand coming from locals, retiring baby boomers who are wealthy, foreigners, corporation and celebrities. How many people were retirng to Manhattan in the 90's when crime was through the roof and quality of life was crap? Anmybody who could wanted to leave the city, not so today. Things will be slow until March, at that point the markets will have absorbed the bad news about the continued problems in the credit markets, mortgages will be perhaps tthe lowest they have been in 30 years, and the city will be hyped up due to the release of Sex and the City.
Also, the credit market for those who are QUALIFIED, has not dried up. In fact banks have increased their spreads, so those loans are going to be a nice source of income for them going forward.

Ahhhh. I got it now. The Sex and the City movie will hype NYC. That, along with all of the retirees coming in, and the increased profits all of the banks are experiencing from the mortgage rate spreads will help stabilize, I mean drive up real estate prices. I can't believe all the analysts on Wall Street are overlooking the upside earnings potential from the increase in credit spreads on mortgages. Oh, and the celebs will help, of course.

Talk about an armchair economist.

will, I'm a bit psychic. All of those people in my lobby at 1pm today? Just a bunch of starry eyed floorplan carrying folks terrified about the credit crisis and waiting for prices to drop 15%.

Oh that's great news, JuiceMan. A colleague of mine is looking for a place in FiDi and she said the open houses were very busy today.

again i ask is the economy better or worse than in recent years? Are the banks more or less willing to make a loan to individuals than in the past.....are people in finance feeling better or worse about their jobs going forward.....anyone care to have any insight into these questions?

Let me get this straight...Manhattan prices will never,ever decrease. The cool-aide is being passed around to often.

I don't think anyone said that, Julia. I think the observation is for now, things seem stable and strong, though a bit softer and much more of a buyers market. There could be some tipping point where reported prices actually go down throughout Manhattan, but it hasn't happened yet.

I don't have a crystal ball, but unless the Kool Aide is marked, "PANIC," I think we'll stay in good shape and weather any small declines very well.

People are open housing for sport. They (currently incorrectly) think they will be able to lowball desperate sellers and get a bargain. Sellers aren't budging. A lot of brokers are saying that they are seeing offers coming in at 25% off of asking price. Yes, people want to buy, and yes, people want to sell. Great that we all realize there are two sides to a market. Now that we are all on the same page, and we understand that the trading level is going to be a function of what price buyers are willing to pay, and at what price sellers are willing to sell, we have to figure out how the psychology of how what the starry eyed buyers see in the papers everyday, and their lack of a desire to feel stupid by buying at the top during uncertain economic times, weighs in against a seller who may be willing to take a 75% return on their investment instead of a 100% gain, and from there figure out what the market might do.

open houses are supposed to be packed now! And whoever thinks that credit problems with macro economy will infect Manhattan overnight, just doesn't understand. Im not saying I know everything, I certainly don't, but lets be honest here. It took a few months, after the initial shock, for wall street to even wake up to the realities of the credit crisis! And the credit crisis is a result of falling housing prices nationally to begin with. While we are not participating on this level, to say we will never be affect in any way, shape or form from an economic slowdown is just ridiculous.

No one can time it perfectly. If you are going to buy now, and can afford to buy, and have a investment goal or 4-5+ yr timeline to own the asset, then BUY! Dont even worry about it. But that is not the conversation here. The conversation is whether or not Manhattan will be impacted by a recession, job losses, and falling stock prices on wall street and my feeling simply is I don't see how it won't. That is not me saying I expect a 50% crash, I dont, but seeing a correction of 10% generally, with pockets of distress of 15% or so, is not so unbelievable is it?

And for those that can buy now but are waiting for this to happen, good luck. Time and again, its been proven very difficult to time housing markets. If I had the $$$ to buy a 1300+ sft 2BR or conv 3 I would, but I dont, and I dont pretend to. So Ill rent rather than buy a 1BR that I will grow out of in 2-3 years and a growing family! It just makes no sense for me. Its such a personal decision. But that is not what we are discussing. Its a market, and like any other market, its affected by outside forces.

When the credit crisis first showed its face, everyone said, "Hey, wall street is near record levels, stop being doom & gloom". Now that stock markets corrected, brokers are now saying, "yea, but foreigners are holding up our market"....when that changes, they will say, "yea, but our dollar is now strong, so our economy and therefore our housing market is strong too"..Owners spin everything positive, renters spin everything negative. Human psychology. But to say their is NOT a crisis out there, and to say that all the stimulus being injected is a positive, is to be blind to what is really going on and the aggressive measures being taken now to sooth the pain that is expected to come!

Thats real. How it will affect Manhattan is yet to be seen. I just happen to think buyers are the key, and their confidence is the key metric to watch. If that drops, inventory will rise; something we don't remember after years of declining inventory. As inventory rises, sellers will face competition with each other and then you will notice deals..This competition has not happened yet and this wall street bonus season is starting out like others in the past, ACTIVE! I went to 3 open houses today, at two of them I overheard 2 separate couples say:

COUPLE 1 - This is 700K! Do these people not know there is a recession coming!

INDIVIDUAL 2 talking to seller broker - I hope your client is negotiable! This is way overpriced considering whats going on with stock market and bonuses.

Now, Im not getting into why these people said what they said, but trust me, confidence amongst buyers is down and to think they will jump in and bid over ask is just nutz (unless of course the property is priced right like at 170 W 23rd)..most sellers price high and test the market anyway.

I still find it amazing that any mention of Manhatta RE prices falling a bit, in any way shape or form, gets some people so angry! Like this market CANT go down, ITS NOT ALLOWED TO. IT NEVER WILL even with a recession, job losses, and falling stock prices. You know why, because the foreigners! our hopes are with the foreigners according to some brokers.

Oh I forgot the best part! The broker's response to INDIVIDUAL 2 that asked about if the seller is aware about the stock market getting hit and bonuses down said, and I quote:

"This is Manhattan. Credit crunches don't affect us and wall street always comes back."

Yea, that is the advice to turn any concerned buyer around for a quick and solid bid!

Urbandigs. You sell apartments for a living. I don't know your educational background, or why you have decided to be a broker. Since it seems you are involved in deals of 1,000,000 or less, your comments do not impact my area of transactions. However, why do you keep talking down the market, unless you have a few bottom feeders as clients that are looking for something 50k out of their reach. My advice to you would be to talk up the market and focus on some positive facts.
1) Very low mortgage rates.
2) Low inventory, as of now.
3) Weak dollar and continued interest from foreigners
4) High demand from Manhattan from buyers around the country
5) Higher quality of life leading families to stay rather than move.
And of course there is the fact that Manhattan is an international city that gets constant hype from tv, movies and media in general.
Urbandigs, don't you realize that every point you make has already been identified by the FED, Paulson, and the main market movers? They are acting very aggresively, and they just may be ahead of the curve. I remember that Wall Street had major lay-offs after 9/11, and that did not tank the market. Relax. It's great that you read bloomberg or cnbc, and its great that you like to talk down the market. My question is, is it good business?

Also, I did not mean educational level as an insult. You seem to like economics, so I was wondering if you used to work in finance or something.

The bulls in here are the likes of spunky and mh23 who just like to hear themselves talk (type?) and never present anything that's well though out or reasoned. Of course all their predictions are nailed and precise - exact number and exact dates - they could never know anything other than the exact course the future will take - "Things will be slow until March, at that point the markets will have absorbed the bad news". Thanks for correcting me, I thought it might have been April 9th.

People with more bearish outlooks in here have posted several thoughtful and insightful arguments, that may not come to be, but at least they can stand on their own merits and be judged objectively.

Are there any good bullish arguments?

Spunky, don’t even bother – nobody wants to hear your drivel.

mh23 - love the comment and its great criticism that I've heard for 2 years now, when I started blogging. Doesn't bother me at all, in fact I appreciate it. Ill try to answer/give my response.

If you read my site from the beginning, you'll see that I was bullish on Manhattan RE for a while! I even sold my apartment in JULY 2006, and described that process with readers and what I did to market for resale. I traded NASDAQ equities with Tradescape via Lightspeed trading platform that I think is now with Schoenfeld securities out on LI. Etrade bought us out first. ALways interested in the markets, since 13-14 or so. My father was big in the markets, and I guess that 'rush' of trading caught me from an early age. Interned with what I considered top stock brokers in 90's on breaks with college with Sol Smith Barney / MS Dean Witter...started trading right out of college with Tradscape and did that until 2004. Decimalization killed what I did, in my opinion and I didnt have stomach for it anymore. Always liked re, bought in 2001 after 9/11, and just thought it could be something to do, blog about that and markets, and always pickup trading again if I wanted to..

urbandigs traffic jumped so I got hooked on it. love blogging. It has helped my business and I am in process of expanding and building a team. My deals done range from 375K to 3.4M. I dont mind your comment about the budget of my clients, your opinion. But you underestimate those out there that share some of my views, are STILL buying, and want to work with me; not just sub $1M.

To answer your question: My question is, is it good business?

yes, I think so. Have no interest in being a cheerleader and hiding my views on a housing market just so I can do a few more deals. Markets change. At some point, I'll get much more confident in Manhattan housing once the uncertainties clear.

One other point. I like you blog a great deal, and you offer great tips for buyers and sellers and you probably have pretty good traffic. I just think it would be a better site if you were a bit more balanced. I understand that the NY Times and CBS want to fuel panic because they want a Democrat in the White House. I also understand why market movers looking to short the market also traffic in panic. But you are in sales. As you said yourself, if your buying a home for 5 years, and you have the cash for a down payment, you would be nuts to burn five more years in rent rather than lock in a low mortgage, and get a tax break on the interest, and get a tac credit of profits when you sell up to 250 or 500k. There is no way to build wealth by renting, and as you note ad nauseum on your site, the markets are trending down, cd's are yielding around 4.% (pre tax) and treasuries are beaten way down. You must invest and take a little risk to creat wealth. A home in Manhattan is a great way to start.
I remember seeing a two bedroom two bath condo in Tribeca, new construction on a great block, for 1,350,00 in 2003. This was right before we went into Iraq, there was a terror level of orange,e and everyon3 was in a panic. 1.3 was very expensive then, as was a 1.5 million 2 bedroom in the west village. I wish I could go back in time and buy both. To make money, you have to be a little counterintuitive and move when others are afraid or unable. In real estate, the government gives you so many incentives to own, that it is a great place to take that plunge.

Thank you for your response. Continued success in the future, and I will continue reading your blog.

I don't think Urbandigs is talking the market up or down, mh23. He writing what he currently observes. Being a broker doesn't mean you have to ignore reality or spin just one way. I think your comments to him are unfair. As for your points, it sounds like listening to an open-house broker tell me what everyone knows. Don't pitch me. It's embarassing even reading those talking points.

Urbandigs also offers texture to the observation "open houses were hopping today." Yes, but many sellers' agents didn't like what they were and have been hearing. For example, true that one broker I know had two offers made today. Conclusion market is fine? No. Both were even lower than an offer the seller has been sitting on for two weeks. The seller won't lower his price though because he has a profit figure in his head he insists on meeting. Buyers won't offer more because they fear a correction--however small but maybe more than small--will make them wish they waited. Result: a standoff. If you go and talk to a whole lot of brokers right now, go to open houses, listen to buyers I think you come away saying the market has no idea what it is doing right now. That's why everyone on here can blather on with opinions without anyone being clearly wrong or right (except that dumb -50% comment earlier).

Wow. "Since it seems you are involved in deals of 1,000,000 or less, your comments do not impact my area of transactions." mh23

mh23 - thx! many valid points but one I would like to respond to is.. "I remember seeing a two bedroom two bath condo in Tribeca, new construction on a great block, for 1,350,00 in 2003."

in 2003, manhattan re prices were probably up 10-20% or so from bottom after brief decline after 9/11. That was a sharp down, and a quick rise about 1 year later (so Sept 2002) to where we were before hand; So, with no national housing bubble yet to take place, if we put ourselves back into time & place of that investment decision, it's a much different deal isn't it!

Now, fast forward to today. Our market is up about 80-110% since days after 9/11 in 2001, a big range I would say. And in this market that has, lets be honest, moved unsustainbly in such a short period of time, we have a collapsing housing market outside our walls, a credit crisis, toxic waste on major banks/brokerages balance sheets, and a threat of a global slowdown as an infection of any US slowdown. These threats, placed AFTER such huge housing/stock/emerging market runups, sets up very scarily in my mind. Last July, I made a point to switch focus to all these unfolding macro events and potential problems. Its scary. Just a lot of red flags in my mind. So, how could you justify making the same investment decision today, when in 2003 the market did NOT runup an additional 70-90% and the macro environment was in the process of inflating the bubble, not popping it and causing such pain to the major banks/brokerages thereby tightening up credit/lending and the announcement of hundreds of billions in losses and probably way more to come.

Time & Place. What happened in the past is done. We are at now now, and all these things must be put into context. I feel it important to discuss, no one else in my profession is, besides Douglas Heddings of TrueGotham, a top producer at Elliman.

Those are good points. My larger point was that buying an apartment should not be viewed as a part of your investment portfolio in the same way that stocks, bonds, money markets, etc are. It is where you will live, and assuming you have to live in Manhattan, you are going to be paying out money whether you rent or buy. With buying, however, you get to avail yourself mortgage tax deductions, a generous tax credit, if you sell for a profit, and the power to fix your monthly housing costs for up to 30 years. If one continues to rent, you are building no equity, getting no tax deductions, and eroding the amount you could use as a down payment year in and year out.
There is no question that if one buys real estate in order to flip it in a year, you can get burnt in any market, including Manhattan. However, if you are buying a place to live, and it is Manhattan, you need to be thinking about the opportunities that are out there right now. As for foreigners, my experience is that they are only impacting the market of say 3mil and up, and those people are truly wealthy and are not making decisions based on anything other than their own impulses, and perhaps the fact that they think Manhattan is cheap when you consider the exchange rate and the cost to own in London, Paris, Dubai, Zurich etc.
In any event even in 03, those numbers I through out were considered high, and many people, including me, decided to wai for further softening...it did not happen.

TheStreets, not sure what else you are looking for. There are over 500 posts in this thread with some very valid bull arguements. Should we rehash?

Urbandigs, thanks for sharing the conversations between buyers and brokers, good stuff. I would however, laugh very loudly at a buyer that made a comment like "I hope your client is negotiable! This is way overpriced considering whats going on with stock market and bonuses." That's just funny.

JuiceMan - I respectfully disagree about the validity of most of the bull arguments we've seen so far. We've seen lots of arguments that would have been good if the 'facts' were actually facts. Take mh23's recent post where his argument for rising prices is supported by the 'fact' that we have "Very low mortgage rates."
Thats just wrong. We don't have very low or even moderately low rates. I went to bloomberg and pulled up the "Bankrate US Home Mortgage 30y Jumbo National Average Jumbo". It's higher today than it has been since May 2002 (with the exception of a spike immediately after the credit crisis broke in Aug 07). Even intuition should tell you that "Credit Crisis" and "Very Low Mortgage Rates" do not go hand in hand. Urbandigs' "tight invertory" argument and his "buyers on the sidelines" argument are the only things I have seen that are bullish statements, based on facts, and well thought true.

Using your logic TheStreets, I’m not satisfied with any of the bear arguments either. Can’t argue the facts behind the credit crisis, 2007 street bonuses, potential for a recession, or the endless macroeconomic analysis but have you figured out a way to link any of that to the Manhattan real estate market? Has Manhattan been impacted so far? How? How exactly do you think (based on “the facts”) all of these issues will impact it?

Look, there are no “facts” on either side of this argument. We are dealing with antidotes and opinions based upon interpretations of potential impacts. It is fun and interesting to have the debate, but to use spunky’s terms, it really is just mental masturbation.

Streets, if you don't understand the basic facts that rates are low, I can
t help you

mh23 - I can't believe that you are so arrogant as to argue this low mortgage rate crap given the data I provided in my last post. I told you the source for the data - Bankrate.com data delivered via Bloomberg Professional Service. As an expert on interest rates I'm sure you have Bloomberg too so just type ILMJNY INDEX GP GO and change the start date to 2001. As you can see the current rate is 6.71% and you have to go back to May 2002 to see rates higher than this with the exception of Aug 07 (start of the credit crunch). So yes, staring at this graph, I "don't understand the basic facts that rates are low" as you say. Do you think it might have something to do with the FACT that they are NOT ?

JuiceMan - I'm not suggesting that one can predict the future. But if we can get the basic facts straight then we can make informed inferences from there. Thats the foundation of all financial analysis - you never know exactly whats going to happen. The credit crunch, recession, rate environment etc. can all be characterised by observable facts. After that point, in discerning their impact on Manhattan RE prices, is where the grey area comes in. The initial point I was making is that we seem to be having a lot of difficulty getting the basic facts straight - especially on the bullish arguments - see my respons to mh23 above.

Streets, I have a quote of 5.78% for a 7/1 arm interest only, jumbo 0 points. That rate will in all likelihood drop over the next few weeks to around 5.6%, 0 points. 40 days ago it was around 6.25%. I agree that 30 year and 15 year conforming rateshave not come down as much, particularly for a jumbo, so if you thought that I was speaking about those products, I apologize for the confusion. A 5/1 arm will be cheaper still.
To be sure, to qualify for this mortgage one will need good credit, and will have to have a loan to value ration of at least 80%. However, for someone with cash who is a serious buyer, those are pretty cheap rates, and they are going lower still. Most people I know, including myself, put down enough in equityy to make the 7/1 arm the best product. I currently have a 5.25% mortgage for a 5/1 arm on my place, which I closed in '04. I put down 33%, and I will be selling in '09, or if the market is soft, renting. In August, the 7/1 arm was over 7%, so all I am saying is that rates are coming down, however there is no doubt that lending standards are going to be more strict, and buyers will need enough cash to put down between 15 and 20%

Streets, most bears on this board are trying to make informed inferences on pure financial information. The emotional side of real estate is a huge factor which no financial model can predict. I find it funny when buyers complain about sellers that have unrealistic expectations, are looking to make a certain profit, aren't willing to budge on small details, etc. All of these sellers were buyers at one point, took the risk, put up huge $$, and why in the hell would they now bow to buyers who feel slighted?

Because a buyer (or urbandigs) says that a potential recession and layoffs are occurring and that it will tank Manhattan real estate, does that make it so? As an owner, have you seen any empirical data that says this is the case? No. It is almost as if these buyers / bears are trying to will a recession on these sellers. It hasn't happened, the data is not there, so as frustrated as it may be, that is life. There are many other people in the market that will buy that supposedly unrealistic priced apartment.

So the best facts I can give you from a bull perspective are that while some of the financial data is negative, emotions can’t be modeled. I can’t tell you how happy I am to be in owner in this city. I love the city, the people, and the fact that I own in one of the worlds best places to live makes me incredibly satisfied. You can’t build a present value calculation on those factors and if the bears continue to ignore that key factor, they will be missing a very large aspect of what makes Manhattan real estate tick.

mh23, can you share the bank where you got that quote?

JuiceMan - this emotional aspect is present in every asset class.

You see the same phenomenon in equity markets – during the DotCom bubble we witnessed 200 times earnings valuations and people kept on buying. 2 years ago the sub prime CDO’s looked like a house of cards but banks just kept on pumping them out and investors kept on buying. It’s difficult to quantify the irrational side of things – that’s the domain of Behavioral Finance and not something I know a lot about.

If you have done the fundamental analysis correctly you can safely say that any long run imbalances will eventually correct themselves. You can view the emotional/behavioral aspect as noise over the true underlying price process. If you think Manhattan RE prices are over valued they can become fairly valued by having prices drop now, or holding prices steady until everything else corrects itself.

Personally I think that prices are steep given ‘the state of the world’ – but I wouldn’t be surprised if prices just drifted along around the current level for a few years with nothing much happening. That’s an expensive trade to carry if you’re not getting price appreciation. However, if I was an owner now I wouldn’t go selling, trying to time the market. As someone who’s anxious to buy, I’m holding off until some of the smoke clears.

"As someone who’s anxious to buy, I’m holding off until some of the smoke clears"--TheStreet

Yes you and everyone else that's on the sidelines are waitng for the smoke clearing signal to give the green light as well. This way you can all jump in simultaneously and buy. Just out cuiosity where can I find that smoke clearing signal. Is it the one that crossess over your BS 30 daying moving average.

smoke clearing:

+ when assets on tuesday aren't valued 10% off where they were on monday
+ ATM SPX implied vols drop back below 20% and the insane OTM put skew flattens out.
+ When the conforming/non-conforming mortgage spread drops back to long run levels.
+ It would be nice if there wasn't a continual expectation of another emergency fed rate cut and the futures implied probability wasn't -50bps at every meeting.
+ When the government isn't proposing any more 'stimuli'.

These are all indicators that makets are recapitalized, participants are not buying protection like the end is nigh and the federal reserve/government is no longer concerned about uncontained GDP contraction.

By this time on the Manhattan housing front the wall st bonus buying season will be over.
Then we can assess true inventory and price trends without all the background noise.

spunky, it was a fun night as Asia and Europe have decided they sort of like the levels suggested last week. Are you still loving your stock positions this morning?

Merrill Lynch, private clent. However, I am sure that if you reach out to any mortgage broker, they can get you the same, or maybe better quotes.

Juiceman couldn't be more right. The environment of the Global Economy has nothing to do, directly, with what Manhattan prices do. It is an emotionally driven market. The only problem is that emotion is about to change from greed to fear. That fear is going to be driven by the Global Economy.

The only thing we have to fear is fear itself.

Oh Oh zizizo feels Mer and C will be going down today. Do keep me updated.

Streets - dont waste your time explaining. There are those that wonder WHY all this stimulus is happening, then there are those that say YES, look at how much we are going to appreciate. The WHY is set in today's time, the YES is set years in the future.

When Greenspan started taking rates down to 1% FFR, in the early stages everyone I knew said, fed is cutting, dont fight the fed, get long get long! Well, the fed was cutting for a reason, albeit a very special reason as dot com tech bubbles dont happen too often, and it took a few years until all those rate cuts supported a new bubble. If you bought stocks in 2001 when fed started cutting, you had to bear through years of harsh downward trending. It was in the boring, dull, dead year of 2003 (some 2 years later), that the bottom formed, and then it just held in a trading range until surging in 2006; years after the 1% fed funds rate had time to funnel through the economy and inflate a housing bubble.

The fed is in the early stages AGAIN of aggressive rate cutting with emergency cuts without any harsh evenst like a 9/11 occurring. Its the credit crisis this time and if you look at leverage compared to dot com bubble, its like 15X higher as the fuel to this fire this time around is an asset class that is a slow moving, illiquid house leveraged up the wazoo with that risk dispersed eveyrwhere around the globe!

Putting Manhattan RE aside for a moment, I dont understand how anyone could truly argue why some of use are concerned. As I said a number of times, its the recession, and severity of one, and accompanying cutbacks, stock selloff, and job losses that I worry about infecting our marketplace/buyer confidence in future. Its so different this time as we must replace the large cap tech companies with the financials at the root of the problem

I just want to say something. I enjoy this site and these forums. You get to hear different viewpoints. Im not saying Im right, or Im wrong or Spunky & EAH is right/wrong, its just different views.

I seriously hope this doesnt get personal, because I for one enjoy taking breaks from searching for clients and other work I do during day to read what people think.

Here is where I stand on fed rate cuts. When I hear GS suggest fed funds rate will drop to 2.5%, a full 100 bsp from where we are noe even after the 75 bsp emergency cut, I think..."shit, what the hell is going on that warrants such aggressive easing in the face of commodity inflation?"

I think others view it as "great, rates are going lower and umph is being added to economy so that sets up nicely for buyers and for our real estate market"

Thats the difference.

Fear? Dmag, weren't you the one that got on this board and predicted a 50% correction? Do you have a nuclear bunker built in your rental building? Do you fear aliens? Are you scared of the dark?

Streets, I get your point about Behavioral Finance but I wasn't going there. My point wasn't about emotions regarding imbalances, speculators, and run ups, it was about the emotional tie to the place you live vs. other asset classes. I'm less tied to my Google stock than I am my condo. I know you understand this but most of the bears posting on this board think that simple financial calculations will give them the answer. It is a wonder why there are a number of prospective buyers continually disgruntled with the process

“Well, the fed was cutting for a reason, albeit a very special reason as dot com tech bubbles don’t happen too often, and it took a few years until all those rate cuts supported a new bubble. If you bought stocks in 2001 when fed started cutting, you had to bear through years of harsh downward trending. It was in the boring, dull, dead year of 2003 (some 2 years later),”

Urbandigs, this is an interesting point. I would be curious if there are a group of stocks that were not terribly impacted by the Dot Com bubble. Do you remember any that did well before, during, and after the bubble burst? If so, they were probably stocks with strong fundamentals to begin with? Could we argue that this could be the same phenomenon occurring with Manhattan real estate?

Urbandigs. What are you worried about? A global economic collapse? Look, banks made some bad loans, and they are taking multibillion dollar hits; but they are getting liquidity from SWFs as well as support from the Fed. In a perfect world, they should be forced to bear the costs of their bad business practices, but that would tank the economy.
Stocks go up, stocks go down. This market has not had a correction in something like 4 years. Again, like in 2002, those people who had unbalanced portfolios, or who took on too much risk will get hurt. The national housing bubble is unwinding, and the only problem that creates in my opinion is that consumers will be spending less due to the fact that there are no more home equity loans available for their overpriced houses, that could lead us into a recession, but we will see.
Oil prices are coming down, as will food commodities, so that should take some pressure off the consumer, but again, the consumer is getting squeezed from all fronts...
As for Manhattan real estate, there is very little supply in quality neighborhoods in Manhattan. Will the wealthy from around the world be so harmed by what goes on in the stock market that they stop buying, I doubt it. As for Wall Street layoffs, that is bad news, but how bad remains to be seen. At the end of the day, I view it as a positive that the Fed is taking aggresive action. I view it as a positive that Congress is acting in a bi-partisan measure to get a stimulus package through, and I view it as a positive that there are streams of liquidity to help the distresses financial.
I am NOT saying that the causes for these actions are positive, however, I prefer what we are seeing today than what we saw a month ago where the Fed was still carping on inflation.

Im concerned that subprime is not where it ends. Other debt classes were securitized too, alt-a, prime, heloc, credit cards, auto loans, option arms, cosi/cofi (which were HUGE last year for troubled borrowers), other neg amort loans..

we just saw the ramifications of lowest quality borrowers defaulting first, naturally. But its spreading to higher credit asset classes. Do you think this is an invalid fear?

juice - hmm, I dont remember as I was trading: qcom, ebay, fdry, jnpr, rbak, akam, bgen, etc.. I had a subset of like 20 stocks that I followed for years..profits I made in trading I stuck into a schwab account and bought blue chips..got killed.

To be honest, I dont recall any specific group that did great from 2001-2003. Cash, Bonds, dollar tree!

sorry, meant to say debt classes, above not asset classes.

mh23 - "the only problem that creates in my opinion is that consumers will be spending less due to the fact that there are no more home equity loans available for their overpriced houses".

You are correct, however this is what the american economy is built on - uncontrolled spending funded with consumer debt.
Your statement is an accurate summation of what is actually happening but you are underestimating the impact of having this all unravel at once.

Urbandigs nailed it with the "other debt classes" point. If you're faced with losing your house you are not going to pay your credit card bill instead of your mortgage. If you can hardly pay for your house and you cant pay your credit card bill are you going to get your teeth whitened ?

Bad year to be a dentist.

Not that I have anything against Spunky...but how did we get grouped together? My position is that you cannot time markets and therefore a slow and steady approach is the way to go. I enjoy to read the back on forth, though. It's a nice break from the rent vs own feuds.

yea, it also just prompted me to write a post on timing the market and instead focusing on if the decision is right for you

http://nymag.com/realestate/realestatecolumn/43261/

on foreign buyer confidence dropping..not just me!

Urbandigs. I see that the article quoted you. You are the only broker I know that is working night and day to create a negative environment for the purchase of real estate. If I was management at Halstead, I would have a good talk with you: Be a gloom and doom blogger or sell real estate, don't do both. Although I like the Nixonian tactic of quoting a magazine that quotes you. Anyway, this thread has become tiresome. Last year the market was slow in Jan and Feb and then it picked up in March. Let's see what happens between now and then.

I agree, Noah, that there are buyers looking for a home only and investors and those are two different conversations. To me, it is a good sign that we're reverting back to the mean. Casual foreign money should not have to prop up a market; however I can foresee sophisticated foreign buyers holding off and flooding back in if prices soften.

I'm not clear who is truly worried, though? Home buyers are presumably staying put and can ride out the correcting market, investors presumably have hedged themselves so is the hysteria more because people are bored?

mh23 obviously hasn't read my site since I started blogging. whatever. Again, talking honestly if its not positive, just seems to be a big NO NO. In short, if you want to be succesful as a broker, lie, cover up, bullshit your way into a deal. Tell people what they want to hear, not what you truly think. Hmm, I wonder why brokers have such an unethical and dishonest reputation. Everyone attacks broker for this. Now you hit me for talking honestly and going against that trend and flip it to say why do you do this. Do you see this?

eah, i dont think you will see homebuyers worry themselves into selling unless fundamentals in our local market drastically change; i.e. inventory surges, sales volume slows, media lagging reports on this, fierce seller competition, prices clearly on downtrend. Of course, this didnt happen and who knows if it will. Buyers who do not own right now, and thereby are not vested in the market yet, are the one's whose confidence is dropping. Normal considering environment. I dont get why its so evil to discuss this openly.

mh23 I beleive Urbandigs does this for a couple of reasons. First and foremost he is trying to bring traffic to his blogsite so by being controversial here as well as on other sites he gets free publicity for his website. Secondly, he sold his apt in 2006 for mostly market timing reasons and he along with many renters on this board(thestreets, fautus, zizizi etc) would truly like to see prices come down for there own personal benefit. Thirdly, Urbandigs really believes the more media he broadcast on how bad the economy is the more likelihood that potential sellers will listen. This he believes helps soften the sellers up for Urbandigs one, two "price em low and watch em go" strategy. Although urbandigs states he writes on his blogsite purely for educational reasons. Unfortunately for urbandigs most owners in Manhattan don't read his blogsite and even if they did it would not have any effect on their decision.

mh23, I think you are missing the point. Urbandigs' approach is VERY good business. If you are a buyer, wouldn't you want a broker that (above being honest) is aggressively marketing to all of Manhattan why prices should be lower than they are? Isn't Noah's primary objective to get the best deal for his clients? My guess is that he isn't turning off buyers with his views, he is attracting those that feel he will fight the hardest to get them the best deal. A listing broker he is not.

That said, he does have a flair for the dramatic and feel some "cross examination" is sometimes required to bring him a bit closer to the center. What we need a great listing agent to start another blog on why prices will remain high. Any takers?

what happens when I turn positive again on NYC real estate? Will that have the reverse effect on my site's target potential lead: buyer or seller?

i like how you guys are discussing my model with digs, spunky is closer. I would like to correct though that I sold my unit in 2006 partly because of my feelings on market, mostly because I couldnt afford it anymore. I couldnt afford it to begin with, and overextended; a great learning experience. I just thought it was a great opportunity when it presented itself, so I dived in. I loved that place. The appreciation was a great bonus, but after cashing out some equity after seeing stock market continue to fall in 2002-2003 and trading becoming very difficult, we rented the place out at a 15% loss; rents fell at this time after dot com collapse and 9/11. I also piled up so much debt between HELOC cash out, credit card debts, that the whole situation was driving us crazy; I hated budgeting and not going out as much because we bit off more than we could chew. Again great learning experience. The clear choice was to sell the property, clear up all debts, take the tax free profits, and rent for 2700, some 40% cheaper than what it was costing us to hold the condo.

I dont mean to scare sellers, but of course I see why its interpreted that way. Oh well, one side effect of talking openly.

Side note - love to meet some of you guys. thinking of asking Jeff & Christine if they want to put a day together after work to get drinks and meet anyone interested in meeting us and talking about markets, economy, real estate, etc..anyone interested in something like this?

Juicman does bring up a good point as well. However, as a potential buyer after reading Urbandigs blogiste
why would I want to buy an apt? If I beleive everything he states, there are more shoes to drop than Noriega's wife had in her closet.

Sorry I meant to say why would I want to buy an apt? If I beleive everything he states, there are more shoes to drop than Imelda Marcos had in her closet. Wrong lady.

I often wondered what it would be like to meet the people behind the screen names. I wonder if spunky looks more like Mario Batali, A-Rod, Mr. Bean, or Bill Clinton?

hahah. Let me tell you what I am experiencing, as its very interesting:

1. 6 sellers using other brokers called/emailed me in past 2 months asking why their properties aren't selling. Some asked if I can stop by for a property consult to give thoughts on where price should be, if its not right already

2. Many many buy side requests. Mostly, from under $1M buyers. Some are just seeking thoughts on if they should be considering their finances, rather than about what market may do.

3. Over 25 buy side requests for flat fee or hourly consulting service, and then they bid on their own; in past 2+ years since I started blogging. Things that make you go hmmmmm.

4. I've had 5 sellers in past year from urbandigs. All sold, except the E Harlem townhouse that is now back on market a few days ago.

5. Tons of emails just to introduce themselves and to keep in touch to talk about economy.

If anything, I want the site to be a nice resource; Im less interested in who agrees/disagrees with me. Ill write what Im thinking to keep some aspect of content fresh, and the site more sticky for return traffic. As spunky says, press/media is key element and I'd be lying if I told you branding urbandigs is not a major effort right now.

Let me upgrade charts/data functionality and add a few more things to site and hopefully it will provide people with a more easy to use tool to see whats going on in NYC right now, so we don't have to depend on lagging quarterly reports. We need something more real time. Everything else for now is a nice bonus.