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

Spunky - "foreign markets so seem to be rather robust which probably will add to more interest in Manhattan RE amongst foreigners"

By foreign markets would you be talking about Germany, France, Spain or Hong Kong, each down twice as much year to date as the SPX ?

Making incorrect inferences from the facts is one thing. Getting the facts wrong is something else altogether.

Using your 'logic' we should see Manhattan RE prices fall due to weak foreign markets.

Mad props to spunky for inserting "robust" into his analysis, though. It makes it seem so official!!

NEW YORK -- The U.S. housing market may be a seller's nightmare but Manhattan's was a dream in the fourth quarter as foreign buyers pushed up demand while supply stayed tight, sending the average sales price to a record high.

Two swanky condominium projects, The Plaza and 15 Central Park West, helped propel the average price of a Manhattan apartment to a record $1,439,909, up 17.6% from a year earlier and 5.1% from the third quarter, according to Prudential Douglas Elliman Manhattan Market Overview.

"Foreign demand has been a big part of the story," said Jonathan Miller, director of research at Radar Logic and author of Prudential's quarterly overview reports, but foreigners are not permitted to buy co-operatives.

"In a lot of new development we've seen significant activity from domestic purchasers as well," Mr. Miller added.

The average price per square foot of US$1,180 set a record, up 18.2% from a year earlier and 3.1% from the prior quarter, according to the Prudential report.

The median price -- the midway point between the highest and lowest sales prices -- rose to US$850,000, up 6.4% from a year earlier, according to the Prudential report.

The average sales price of a U.S. home overall declined last year. Prospective buyers in many U.S. markets have found prices still too high, and stiffer mortgage requirements arising out of the subprime crisis have also sidelined them.

The overall market suffers from a 10.3-month overhang of supply of homes for sale.

But supply shrank in Manhattan.

The number of apartments for sale fell 13.5% to 5,133, according to the Prudential report, while the number of sales rose 3.2% to 2,518 units.

According to Terra Holdings, sales prices at The Plaza, a former luxury hotel, and 15 Central Park West averaged nearly US$7-million in the fourth quarter, helping to fuel a 51% increase in the average price of a Manhattan condominium.

Stripping out The Plaza and 15 Central Park West, the average selling price would have been US$1.37-million, a 12% rise over the 2006 fourth quarter's US$1,223,160, said Terra Holdings, the parent company of residential brokerages Halstead Property and Brown Harris Stevens.

Prices for condominiums, which usually make up half of new sales, rose 51% in the fourth quarter to a record US$1,851,709, according to Terra Holdings. The average sales price of a co-operative apartment rose 21% to a record US$1,074,369 in the fourth quarter from a year earlier.

The average sales price for all Manhattan apartments rose 34% to a record US$1,430,514 in the fourth quarter, while the median price was up 14% to a record US$828,000, according to Terra.

Yes, but does anyone on this board really care what happened in 4Q07? Aren't we discussing what's happening NOW?

Interesting - well, the data is what it is... These are Q4 closings, though - I'm not so sure we'll see the same sequential or yoy growth next quarter, but only time will tell. On an anecdotal note, I accompanied a friend this weekend looking at some open houses ($700k-$1.1mm range) - they weren't dead, but were not particularly well-attended. There were a few names on each sign-in list, and most of the people with whom we spoke weren't in any particular rush to move, but were more curious.

ANyone see this on times?

Home Prices Start to Dip, Recalling %u201990s Slump
http://www.nytimes.com/2008/02/03/nyregion/03property.html?_r=1&oref=slogin

gee q4 was only a few weeks ago. how much more recent data do you want.

jifjif that article appears to support data that Manhattan is appreciating in value while the rest of the country is not.
As far as rents go in Manhattan. I realize January was not a stellar month for landlord in Manhattan but than again who the hell moves into an apt in the dead of the winter.

Spunky, Q4 closings are generally the result of purchasing decisions made in Q3 which were based on a completely different mkt outlook. The picture was very different, even in October. My point is, we won't really know how the current market outlook is affecting pricing until we can look at Q2:08 closings.

Why Q2 and not Q1 of 08.. We can't keep on prolonging the time here. I do believe when all is said and done both Q1 and Q2 of 08 will be just fine for the Manhattan RE market.

spunky, Q3 of 2014 will be rocky for Manhattan real estate so you may want to wait until then to buy your next investment property

Spunky and will have it right. The fact is that many people would love to own in Manhattan, but they can't. So instead of just accepting that, they try to make the ridiculous argument that you can somehow rent your way to wealth. The government offers homeowners numerous and substantial tax advantages, but none to renters. In addition, Manhattan real estate has arrpeciated over the past several years due to factors that were entirely unrelated to the national housing boom (I'm too tired to repeat this list yet again). The bottom line is that supply is tight and demand is strong. If you want to piss away another two years in rent waiting for the market to tank when you can afford to buy today, you are making a mistake. If you are looking to buy today and flip in a year, you are making an even bigger mistake.

What do you mean prolonging the time? We won't know about Q1:08 purchasing decisions until we have info on Q2:08 closes - the data is lagging because of time to close... The doom and gloom really hit in Jan-08 with larger than expected write-downs, layoffs, huge declines in the stock market, and drastic rate cuts signalling that the economy may be worse than previously thought.

who cares about that noise all I know is that when all said and done prices will be higher for Q1 and Q2 of 08.

Some interesting banter here. Manhattan will be last on the list of declines nationwide and likely some of the smallest. Though smallest could still mean 10%. None of you have Q1 data. None. Island, Wall Street, International $$ - you can paint a pretty picture but take heed. Funny how all the economists above do not speculate on international markets...a huge indicator of the U.S. economy. Billions in write-downs, sub-prime disaster, weak dollar....it's global and it's coming. NY is not immune.

head for the hills it's coming.

No doomsday predictions there, Spunky/mh23. Just common, economic sense. Nothing that Elliman can change. Every argument you have is supported with data that's at least two quarters old when decisions to buy were made (straight from the RE houses, mind you) - buster2056 is right. Ahh, the old NY spin game...that data in real terms is six months old. The way you describe Q4 data simply isn't how statistics work.

buster2056 - you're wasting your time arguing with the likes of spunky and mh23. They are absolutely terrified of any price drop in Manhattan and feel that coming on here and saying it won't happen will prevent it from happening. This is what you do when you are an overextended homeowner facing foreclosure if prices drop 10%.

Look at this comment from spunky - "all I know is that when all said and done prices will be higher for Q1 and Q2 of 08." What level of reasoning, or lack there of, do you think you are dealing with when an individual is trying to present his, usually incorrect, forward looking opinions as facts? Spunky likes to think he KNOWS everything about the future.

mh23 enlightened us with this pearl of wisdom - "If you want to piss away another two years in rent waiting for the market to tank when you can afford to buy today, you are making a mistake." Two years of my current rent is half of one year of INTEREST on the properties I'm looking at buying. That’s right mh23 – my rent is 4 times less than the INTEREST on the properties I would like to live in. Buying one of those places in anything other than a rising market is a mistake - continuing to rent until all the signals support home ownership is a great idea. Go and look up “cost of carry” on Wikipedia and then come back to us.

Bravo, TheStreets. Bravo. All I know is that "all I know" is a hilarious support mechanism.

Thestreets been waiting for the past 5 years to buy in Manhattan. Each and every year he's been waiting for a downturn so he can get out of the dump he's been renting. Keep wishing and please do continue forecasting a downturn it's rather entertaining. In the meantime thestreets please do remember to send your rent check in. The rathole your living in needs new plumbing for all your BS.

Hmmm. There's no harm in calling someone out based on hard facts or critiquing the basis of an argument. However, it is a a problem using personal attacks to debate or defend an argument. There's no place for it on a board and it usually means the accuser is a bit insecure with their arguments. Pretty basic stuff.

The downturn forecast is rather widespread with support from leading economists and banks around the globe. Harvard, Wharton, MIT, Goldman and coincidentally Société Générale - they're all singing the same tune when it comes to sub-prime and housing markets, NY included. No need to argue using someone's "dump". We've all been there unless Mommy & Daddy provided a subsidy...which is no one's business anyway.

OK Streets. And your coming on here and saying the market will drop will somehow make it drop. Ask yourself the following question(s). What factors led to the bubble in national housing, and then see if those factors were in play in Manhattan. Then ask yourself why incentory is so low in Manhattan and then compare that to the rest of the country. If I remember, 2001 was a pretty bad year economically, and yet Manhattan Real Estate apreciated in 2002. What about Superior Ink, will that new development in the West Village languish as developments have throughout the nation? What about Trump Soho?
The bottom line in Manhattan is supply and demand. Inventory is down appreciably from Q1 '07. Has demand abated to such an extent? I don't see it, nor does Doug Headings, who urbandigs respects a lot.
Anyway, keep renting, it pays your landlord's mortgage, and you must be making a killing in the markets, or in your cd's. Wait...let me guess, you own only gold?

mh23 - it's funny you should mention Trump SoHo - have you heard Trump's latest opinions on Manhattan prices ? Let me sumarize - he expects them to go .... DOWN !?!. Oopsie !

http://www.cnbc.com/id/22711529

spunky yes it appears that way. This is what I have noticed from daily conparison and searching to buy... I see some people taking their units off the market or temp off the market till march (3-5 realtors told me when I asked about listing which has disappeared). There are discounts on certain units (some people are trigger happy on reducing their asking price). I see some over price ones coming down to match the comps. And finally, I see pretty decent size and price units going up in bidder war and selling relatively fast.

One that stuck in my mind was the 600k West 9th street condo walk up. Sold in 3 days over 200k in asking. The same floor unit that faces the back is now listed as 799k. Did I mention I see a lot of French and Brits on open houses on condos?

"The downturn forecast is rather widespread with support from leading economists and banks around the globe. Harvard, Wharton, MIT, Goldman and coincidentally Société Générale - they're all singing the same tune when it comes to sub-prime and housing markets, NY included"

whereisall, would love to see all these hard facts you have regarding what the experts are saying regarding Manhattan real estate. If you want to talk about Miami, Southern California, and Jersey be my guest. But what you lack are "facts" that any of this will have a significant impact on Manhattan real estate. Frankly, I've been listening to this malarkey on this board for 9 months (including 700 posts on this thread) and you have not offered anything new to the argument. Welcome your opinion, but posting about expert economists opining about a slowdown in the economy is not news. Urbandigs has been highlighting these key issues for months. What is welcome, in my opinion, is your own opinion or experiences with the market that make you feel like Manhattan is weakening. Enough with the “experts”. The only experts on Manhattan real estate are the people that buy, sell, and rent in this market, and there are plenty of those people on this board.

Hot tamales and they red hot, yes she got em for sale!

jifjif has mentioned his experience which I find very helpful. It's real, factual and insightful. Like I said let's watch Tribeca, Soho, GV, West Village and Gramercy Park areas and see how well the prices hold up during 2008. Any input or experiences like the one jifjif posted certainly would be appreciated.

spunky - two serious questions for you a) what's your profession b) why are you obsessed with Tribeca, Soho, GV, West Village and Gramercy Park - what about midtown, fidi, UES, UWS, etc etc ?

mh23 - it's funny you should mention Trump SoHo - have you heard Trump's latest opinions on Manhattan prices ? Let me sumarize - he expects them to go .... DOWN !?!. Oopsie !--The Street

http://www.cnbc.com/id/22711529

Not only don't you have any listening skills but you are falsifying what Trump actually said. Why don't you once again listen to what Trump has to say on the link you pasted and get back to us and tell us what he says about Manhattan today? How are his Buildings selling in Manhattan today? That is your assignment for the day.

Ooooh, home work!

Let's all take anything trump says with a shaker of salt.

Trump says the Manhattan market is still very strong. He does say he doesn't know how long it will last, but for now (or at least as of a couple of weeks back when he did the interview), things look strong. I guess from that you could extrapolate that he is concerned that things might go down at some point, but his overall outlook for the national economy is somewhat pessimistic.

Interestingly, in terms of the national housing market, he says its a great time to buy.

If you read carefully, I'm not quoting those sources opining about Manhattan in particular. They just never exclude NY. Are we going to see dips like Denver or Miami? Absolutely not. Similarly in London, there's simply too much wealth concentrated in a relatively small area for turns to be severe. I'm well aware of the many people sounding off on this board for months about the downturn and such. I'm not claiming to be an "expert" on Manhattan real estate - who has the time? Yet, I do see a downturn for a number of reasons in the next year:

Fact: The U.S. is headed for a recession. No one can dispute that. Are we in one now? Depends on where you sit, I guess. NY feels that just like everyone else. We may very well see parallel problems in global markets which could lend to foreign investments being curbed a bit, NY included.

Fact: Global sub-prime and credit crises are ruining markets. $10B write-downs are not going to be fixed with a small rate adjustment by the Fed. They just aren't. NY is not immune to that.

Fact: Data used in the most recent arguments is at least 6 months old. There is no data pointing to a strong 1Q this year - in fact, many sources now claim prices are falling in Manhattan. Arguing that units SoHo or TBCA experienced increases is not addressing the entire island. If we're discussing below 14th St. the entire dynamic of the thread changes. If that's the case, then someone should imply that.

So, that's my opinion. I'm not arguing to prove anyone right or wrong. I'm debating/discussing to stimulate conversation from an "All I know..." arena to a more productive and interactive forum. Thanks, JuiceMan.

"I'm not claiming to be an "expert" on Manhattan real estate - who has the time? Yet, I do see a downturn for a number of reasons in the next year"-whereisall

It's official the doom and gloomers we are no longer calling for a downturn in Manhattan RE for 2008 it is now being pushed till 2009.

Juicman calls for a downturn in 2014

Okay I will call for a downturn from 2029-2031 in Manhattan. I advise all those considering buying to hold off till at least 2029 or at least another 21 years. The next downturn I am calling is 2043. After that it will be 2094 but by that time we shouldn't matter for most of us.

Again, no one has answered my fundamental question(s). Has the appreciation in Manhattan over the past several years been fueled by the same fundamentals as say, suburban Tuscon? If not, what does that say about Manhattan valuation. Are they a product of a bubble, or are they a product of something else, say quality of life, multiple streams of demand, low inventory, relatively cheap compared to other international cities, strong local economy (not just Wall Street). I say it is the latter, and therefor not a bubble. That's why Manhattan did not begin deflating the way the national market did beginning in '06.
I am not saying that Manhattan is immune to down turns, if we have a return to high crime, poor quality of life, suburban flight, double digit unemployment, that would affect Manhattan's fundamentals and drive down prices. I don't see those things happening in the near future.
As for me, I am only interested in apartments that are over 2 mil in prime neighborhoods. Could there be some softness in parts of Queens and Brooklyn and above 96th, I guess. But if there are, it will be due to supply and demand, and not due to the bubble that was created in say Columbus Ohio or Delray Beach Florida.

Haha, good call. You are a clever one, spunky! But wait, "in the next year" encompasses 2008. Economic downturns take months, not days. I'm not a Manhattan RE expert, I have a better job.

Spunky, your posts can be classified as mindless, uneducated, ridiculous banter. You waste time while waiting for someone's Mom to call your craigslist ad with fake pictures for a $1450 studio in the E. 30's. You should really use that time for grammar classes:

"...like a high pitched siren from the misses."-spunky

"BTW thestreet your an idiot"-spunky

Oh yeah, that doesn't matter in the rental broker business. Clown.

Sorry everyone else, non-clown rental brokers included. I don't endorse personal attacks but this guy is really a jackass.

die discussion die!!

A couple of interesting points that people have raised on different parts of this site (1) non-luxury prices in Manhattan have been softer since the end of 2006, and (2) Manhattan prices are more reasonable relative to other international cities like London.

In addition to these points, the Manhattan housing market took a brief hit after Sept 11 and another just about when the national bubble burst in 2005. No doubt the national economic picture will have some impact; perhaps it already has. But given the low inventory and the continued demand, it is doubtful that price decreases will be long-lasting or deep.

It seems that there have been corrections along the way in the 21st Century, so far. Could be if not for these corrections, prices would be even higher than they currently are.

Add to this the oft-mentioned "Manhattan is different" arguments (international city, foreign investment, low inventory, limited space on the island, etc. etc.) then perhaps there's an explanation for why we may have more of a buyers market than before (and perhaps for non-luxury since the end of 2006), there is very little appreciable price decline and may not be.

There's no rule that says the market needs to be boom or bust. Perhaps the Manhattan RE market will just move back and forth as a buyers vs. sellers market with relatively stable prices for a while.

whereisall, I applaud your powers of observation:

"I don't endorse personal attacks but this guy is really a jackass."

Realizing that spunky is in fact a jackass is like a rite of passage on streeteasy.
I think this would be a nice note to end this thread on.
I feel like we have finally achieved something all reasonable participants can agree on.

Not me, I intend to stay here until we resolve our differences and get this economy/Manhattan RE thing all worked out.

An interesting reading list from the paper of record...it could be worse; we could be in Bethesda.

http://blog.washingtonpost.com/shortstack/2008/01/novels_to_read_while_the_housi.html

whereisall what planet did you just come from.For some reason the twilight zone music was ringing in in my head as I was reading your last post.Dam you need to reduce your Prozac intake by at least 3 capsules per hour.

"Hmmm. There's no harm in calling someone out based on hard facts or critiquing the basis of an argument. However, it is a a problem using personal attacks to debate or defend an argument."--whereisall

"Spunky, your posts can be classified as mindless, uneducated, ridiculous banter."---whereisall

"whereisall you are a Hypocritical jackass"-- Spunky

"I feel like we have finally achieved something all reasonable participants can agree on."

I don't agree, does that make me unreasonable?

correct. glad we are all in agreement. next thread.

Nah, lets here more about how you don't feel mortgage rates are low because they are not the lowest ever. That's a good one.

Plus, if we end this thread, a new one will be started with the same conversation so we may as well document it all in one place. How else will we know who is right once Q4 rolls around? Think about the banter then! Sort of like urbandigs' inventory reports, need a few quarters before you can really rely on the data.

sorry...hear not here.

Juiceman if we had all reasonable participants this thread would of ended long ago.

"Sorry everyone else, non-clown rental brokers included. I don't endorse personal attacks but this guy is really a jackass."-whereisall

Yeah! Good comebacks, buddy! Again, grammar seriously challenged your intelligence. Shouldn't you be catching up on Collating Monthly? Go fetch your boss some coffee. I laugh at people like you. No structured arguments or thoughts in your head. Other people are actually trying to discuss (as the title of the page reads) real estate here, not insult ideas or incite a pissing match. Again, sorry for the outburst and wasting time, everyone else. No place for that here. I'm out.

whereisall just remember when you get your medication refill make sure you follow your dosage instructions.

"non-clown rental brokers" whereisall

what's a non clown rental broker?

hmm......if everything great why is the fed cutting rates anyway? Boy that number this morning was a great one.......everything ok.......

JuiceMan - thats not what I said - I very clearly explained that jumbo mortgage rates in NY are higher now than they have been at any time since 2002 with the exception of Aug 2007. Then I explained how current rates, being higher than they were over that whole period, could not be seen as a positive sign. In fact, it's a negative sign. If you still don't understand that let me make it really simple - it costs more now to borrow a million dollars than it did in 2002, 2003, 2004, 2005, 2006 the majority of 2007. That makes housing less affordable now and takes potential buyers out of the market. I also gave you the source for my data and didn't just pull it out of my ass, like so many here choose to do. If you disagree with this and don't have industry standard benchmark data to back it up then you are wrong. Priod.

It's also interesting that you should bring up the low rate/cheap credit issue today - because today we see some of the worst news in months for that whole argument:

"CDO Market Remains Almost Frozen, JPMorgan, Merrill Traders Say"
"CDO Ratings to Fall as Losses Trigger Fitch Overhaul (Update4)"
"Fed Survey Shows Lending Freeze Is Worsening: Chart of the Day"

... all articles available on BN.

I'll leave you with this quote just in case you have any remaining notions of taking up the cheap credit argument again:

``Our fear has always been that when financials sort out their own affairs, they will become more insular and be much less willing to extend credit for a lengthy period of time,'' - Jim Reid, a London-based strategist at Deutsche Bank AG.

what do you all think of this:

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=2008238508700&category=FREE&nocache=1

That is exactly what I though you said. I’m not arguing your data. To use your words “If you still don't understand that let me make it really simple”

Today, jumbo rates for 7/1 ARM are around 6%. If you put 30% down, close to 5.5%. How far off are we with todays rates from an average of 2002, 2003, 2004, 2005, 2006 levels? Less than a 100 basis points? Now, re-read your post (see conforming limit increases) from a couple weeks ago on how little changes in rates makes small differences in monthly payments. So you are telling me now that since rates are not at the levels of 2002, 2003, 2004, 2005, 2006 that this will somehow change demand patterns? I think your conclusion from the other post is more accurate. It doesn’t friggan matter.

If you want to continue banging the drum of 2002, 2003, 2004, 2005, 2006 when folks say that rates are at historic lows, technically you are correct. If you compare these rates to a 30 years period, the difference between now and your favorite years is statistically insignificant.

stocks doing good today......but the giants are at city hall......they will all be buying condos in nyc.....so add that to the argument......great time to buy get in front of the buying spree......they are coming.....hopefully eli will move in to my neighborhood.....that will make my property value sky rocket......

WOW JuiceMan - you certainly don't do this for a living do you ? Who cares about 30 years ago. Yes, rates are way lower than they were in 1981 when fed funds touched 20%. Since you think it's ok to take the interest rates from 1981 and argue that we are in a low interest rate environment today, let me take the price data from 1981 and say we have a long way to get back down to $36/sqft ... adjusted for inflation at 3% for 27 years is $80/sqft - we're due a huge crash. (Spunky, relax, this isn't going to happen).

What matters is the last steady state equlibrium of the economy and where we moved from there. For many years we were seeing mortgage rates around X, we had lots of buyers and prices ran up over this same period. We are now entering an environment where rates are X + something. This will remove buyers from the pool compared to what we would see if rates were stable at X. This will put downward pressure on prices (less demand). That fact that we were at X + 'a lot' 30 years ago is irrelevant.

That is a great non answer TheStreets and completely contradictory to your post on conforming limit increases. X + a little is different than X + a lot. Don't like 30 years. Fine. Use 10. Better yet, use your own data in the years you have highlighted. Are rates right now really that different than 2002, 2003, 2004, 2005, 2006? C'mon TheStreets, you can do it. You must do this for a living (since I don't) so tell me the difference.

I didn't contradict anything I said in the post about conforming/non-conforming spreads - go back and read it thoroughly again and make sure you can replicate the PV calc - then show me where the contradiction is.

To answer your other question, yes, jumbo rates are significantly higher now - 148 bps from the low of Jun 2003 to today. On an aggregate basis borrowing costs for jumbo mortgages are 30% higher now than they were back then (for a fixed dollar amount).

148 bps from the low or on average? Picking the lowest point in the last six years is a bit of a cop out don't you think? If you look at week ending average 30yr fixed rates for the past six years:

week ending 2/1/08 - 5.68
average 2002-2007 - 6.13
2002 ave. - 6.54
2003 ave. - 5.83
2004 ave. - 5.84
2005 ave. - 5.87
2006 ave. - 6.41
2007 ave. - 6.28

Number of week end periods from 2002-today - 317
Number of week end periods that are under the current 2/1/08 rate – 38

So, (hold on, let me calculate this…..I don’t do this for a living so it is a bit of a strain on me…ok….got it) 12% of the current week ending periods over the last six years were under last Friday’s average 30yr fixed rate.

I’m even willing to concede a couple fractions of a basis point for jumbo loans in the current credit environment and so..... I ask the question one more time, are there significant differences in today’s rates compared to 2002, 2003, 2004, 2005, 2006, and 2007?

eh nice try JuiceMan - just pull some 'data' out of your ass and claim that today's rates are lower than all but 12% of the observations. Not likley. Do you think everyone here is totally stupid ? Even on a subjective basis you should be able to figure out that mortgage rates are higher today given the evaporation of the CDO market and the tightening lending standards. I gave you the source of the data. To be totally clear it's "Bankrate.com US Home Mortgage 30 Year Jumbo New York", Bloomberg Ticker: ILMJNY Index. All you have to do is type ILMJNY Index GP GO and you will see that ALL of the points with the exception of a spike around Aug 2007 are below todays level. I wish I could post the screenshot here for all to see. You are just totally wrong.

JuiceMan is right. I received a quote of 5.5% for a 5/1 Interest only ARM, Jumbo. 30% down. 5.75% for a 7/1ARM, 0 points for both loans.

That's right. I made up the data. I also made up the quote I got for a jumbo 7/1 at 5.625 in the middle of last week. Eerily similar to the 5.68 week ending rate huh?

The way they are pricing jumbo's today is based on how much you put down. If you are willing to put down 30%, you are going to get close to a conforming rate. 20% down, about 50 bps higher than the conforming rate (assuming excellent credit). I don't care what data set you use, those are pretty good rates compared and on average, in line with the last six years.

I'm done, if I could buy you a beer TheStreeets, I would.

JuiceMan is wrong. mh23 you are talking about specific quote for a specific individual.
Plus you just moved to 30% equity and changed the structure from fixed to I/O or ARM. Then you went and took over 75% of the expected duration off the mortgage by using a 5-7 years instead of 30 years. If you want to look at that type of structure just look at ILMUNY Index on Bloomberg and you'll see a similar pattern, but at different levels reflecting different credit risk and different duration / prepayment risk. The mortgages you are talking about hit a low of 3.90% in march 2004 so you're not comparing apples with apples.

JuiceMan vs Bankrate - I'll take Bankrate thanks.

NY Mag

http://nymag.com/news/features/43574/
looking back at 1990s

Ok. I'll take the bait. One more time TheStreets.

I've run the 30 yr fixed jumbo comparison over the last five years on bankrate.com for NY. On average (eyeballing) is about 6.1% compared with about 6.6% today. So, back to my original question, is a 50bps difference significant enough to truly impact demand? If you do YOUR famous PV calculation the sensitivty of a 50bps difference is what? To YOUR point, it is insignificant. So, please stop with the lectures when someone says that rates are near historic lows. Over the last 5 years compared to now, they absolutely are. Open it up to 10 years, and it is even more true. 7/1 jumbos, even closer to historic lows.

Can we move on now?

No, we can't move on. You just contradicted youself within that last post:

"I've run the 30 yr fixed jumbo comparison over the last five years on bankrate.com for NY. On average (eyeballing) is about 6.1% compared with about 6.6% today."

... so you're agreeing with me that rates are today than in the past 5 years. Then you add...

"So, please stop with the lectures when someone says that rates are near historic lows. Over the last 5 years compared to now, they absolutely are."

I'll explain the PV calculation to you later, but first you need to figure out if 6.5 is higher or lower than 6.1 ... you had it right at the start of you post but then got a bit confused ... which is it ? try again.

near vs. at, Do you know the difference?

JuiceMan – these are the real numbers, no 'eyeballing' here because I pay for my data feeds and I can do the analysis.

Current Bankrate 30yr/Jumbo/NY Index: 6.78%
Low since Feb 2002: 5.3% (6/16/2003)
Mean: 6.07%
Median: 6.04%

30 yr Jumbo Rates are 71 bps above the 5 year mean, 74 bps above the median and 148 bps above the 5 year low.
With the exception of August 07 are setting NEW 5 YEAR HIGHS !

So we are neither 'near', nor 'at', the low rates you think we have.

I trust this is the end of this issue. Your persistence is admirable, but I am sorry - you are wrong.

TheStreets:

I have no idea where you got that 30 year fixed jumbo rate. I spoke to my mortgage broker within the last 24 hours, and he quoted me a 30 year fixed jumbo for a NYC condo/coop at 6.25%. I can get a significantly better rate (under 6.00%) for a 10/1 (if that's that's what one wnated).

If you are paying a current quote rate for a 30 year ixed NYC condo/coop of 6.78%, you're a tool.

malraux - thats the difference between an index and it's components. You are only one of the components in the index with your unique circumstances, building, credit score, equity stake etc. It's like as if I said the SPX was down 3% today but then you say that can't be right because Google was up 2.3%. If you have more money for a down payment now or your credit is now much better than it has been in the past you could be seeing the lowest rates of your life. It's just not very relevant for the rest of the world and doesn't tell you anything about the state of the lending market in general.

malraux, that's the difference between a bank's (real) rate and what your mortgage broker quotes you. Didn't we all figure out that the mortgage brokers are all corrupt? Don't you understand that they make money on you? (read: they lie about the rate, and if they have too, buy it down with points and hide the points in miscellaneous fees at closing) Next: Who cares about rates? There is a global melt down occurring, in case you didn't realize it. And the fed is trying its hardest to cure it by lowering rates, which will cause inflation, which will cause treasuries to sell off and rates to spike. Next: Real estate returns have spiked so abnormally, that it is impossible for those returns not to revert to their mean. (tired of saying "next") - Also, keep in mind please, markets don't move sideways. Ever. They move up, and they move down. And they always move too far up, and too far down. Don't kid yourself into thinking markets are moving sideways for too long.

TheStreets. You are funny. An index that is 70bps away from an average of the five best years in history is not "far away" from anything. You are foolish for saying so. Rates are still very good and, in many cases as outlined above, much better than your trusted index.

Your post to malraux is interesting as well. Sure you can get a better rate if you have good credit, a good down payment, good building, etc. Really? No kidding? So The fact that malraux can get a 6% (right at the average of your little index) is an anomaly? That doesn't count? That is just silly. There are a lot of people in Manhattan like malraux and that is why rates will not impact the market negatively at their current levels. Which was my original point to begin with.

TheStreets, have you ever bought real estate? Seems like you are struggling with some pretty basic concepts.

i like econ101 statement the best......we are all screwed......the world as we have known it for the last 5 years is over and done.....free credit.....money flowing this way and that.....it is all over....does it matter what rate you can get when you work at citi and your 401k just took a massive hit....wake up people.....it is over that is it......nice numbers yesterday

The Streets:

"...It's just not very relevant for the rest of the world..." I don't care about 'the rest of the world.' In Manhattan, right now, today, I can get a 30 year fixed coop/condo (assuming a standard 20% down for a coop or 10% down for a condo) for 6.25%. THAT'S what's relevant to me. Not an index.

Econ101:

"...Didn't we all figure out that the mortgage brokers are all corrupt? Don't you understand that they make money on you?..." Oh I see, now. Thank you. And banks DON'T make money on you? Who are you kidding? And they all 'lie about the rate?' I've got news for you. I've worked with my mortgage broker for over a decade on multiple purchases. If he tells me that today I can get a 30 year fixed coop/condo jumbo in Manhattan for 6.25%, than I can get a 30 year fixed coop/condo jumbo in Manhattan for 6.25%. It's not a 'teaser' rate, or a 'bait and switch' rate, or whatever you wish to call it.

As to your assertion about 'who cares about rates,' well, I for one, care about them inasmauch as it may be time to refinance. And I imagine that may apply to many other people as well.

malraux - you still seem to be struggling with the concept of an index. This is a discussion about whether mortgage rates are higher or lower today than they have been over the past 5 years. Nobody cares about your particular situation other than you. Saying you don't care about the rest of the world is the same as saying you dont care what the market is doing because your penny stock is up 120%. Good for you. Thats hardly useful information in a discussion of whether the market is up or down.

JuiceMan - firstly, 70 bps IS actually a lot. 6.70% makes the monthly payments on a 30 year mortgage 8% higher than a 6% mortgage. A 6.7% mortgage is 16% more expensive than a 5.3% mortgage that we saw in July 2003. We could just drop 8% or 16% off the prices and hold rates fixed. Who thinks 8% or 16% off the asking price isn't a lot? Do the calculation before you come back here blowing smoke.

"An index that is 70bps away from an average of the five best years in history is not "far away" from anything. You are foolish for saying so."

OK. The standard deviation since 2002 is 42 bps. We are 1.7 standard deviations above the mean and 3.3 standard deviations above the low. We are well above the mean and very far away from the low. Again you are wrong.

Also, I never said that the rate malrux received was an anomaly - please point out where I said anything like that. I said that was one sample that would go into the index and was dependent on his unique circumstances and not representative of the market as a whole. Are you really so arrogant as to suggest that you think you know more about mortgage rates than Bankrate ?

The bottom line is you tried to say 6.78% was LOWER than 6.07%. It is not. You are wrong. Just admit defeat and leave the argument with what little dignity you have left.

And you seem to be struggling with wherever it is you get your "index" rate quotes.

6.78% for a Manhattan 30 year fixed coop 20% down/condo 10% down jumbo? Not even close to reality. That's what happens when you deal in quant data feeds and not reality. I can walk off the street into any bank in Manhattan right now and get a significantly better rate than 6.78% My mortgage broker (who according to Econ101 is totally corrupt and trying to rip me off and overcharges the bank rate) can get me 6.25%.

It's hard to figure out where 'the market is going' if you don't deal in real on-the-street numbers and instead look at flashing screens and faxed/emailed/bloomberg-ed generalist reports all day. And that's the problem with your fabulous Bankrate index. You can scream 6.78% all say long. It's not real. And therefore, as to predicting market direction, it's no more, and no less helpful, than my way of checking regularly with a number of lenders I deal with on the Street to get the feel of what the reality is out there, whether you like that system or not.

you guys are clearly on a mission to get to 1,000 posts here. Serenity Now.

"The bottom line is you tried to say 6.78% was LOWER than 6.07%. It is not. You are wrong. Just admit defeat and leave the argument with what little dignity you have left."

Never said that jackass. What I said, is that it was not significant enough to impact demand. Which it isn't. Read my posts. I understand you want to turn this around to save face, but you have dug the hole, now lie in it.

Problem with you TheStreets is you think everything can be solved by a mathmatical model. It can't. Keep giving advice based your little indexes from your rented apartment. Everyone else can listen to real quotes from people that have actually purchased real estate.

I'm done with this discussion.

JuiceMan - "I'm done with this discussion."

I'll take that as "TheStreets, you were right all along, I quit".
Hey, no hard feelings. I'm sure you're a great dentist ... or whatever.

TheStreets, the index argument could be used against you. For instance, if the S&P500 is down 50%, does that mean ALL stocks are down 50%? Does the S&P500 index matter to your decision to buy a stock in the S&P500? Perhaps a little, but maybe that stock is up 20%. It is possible that you may weigh the individual stock's performance over the index's. I believe that is what malraus or whoever was trying to say. The mortgage index may say x%. The real subset of Manhattan buyers is y% because they have the assets for y% down and z credit score. So why does x% matter. (See case shiller)

However, over time, it is very possible that the overall index may drag the individual stock down. I see it both ways because you can always twist statistics to show your point. That's why they can't be trusted.

Sure no hard feelings, Streets. Good luck in 2008. Underperforming I-Bankers will have it tough this year, and based on your lack of common sense, you most definitely are on the bubble.

you guys are losers

i wish i had more time in my life ...... that way i could spend all day on this blog talking about mortgages and such.......but i don't

you suck, gumby. one more new thread would have kicked this tired and useless discussion off the start page.

I have been watching the inventory numbers on Urbandigs blogsite and I have noticed that at the current trend appears to me that this quarter's number may be well below 6000 available units which would make Q1 2008 numbers below Q1 2007, Q1 2006 and Q1 2005. Yes believe or not we are actually seeing a drop in supply that would make this Quarters supply numbers the lowest in sometime.. BTW has anyone been following the platinum market. In either case I thought the following article was interesting in light of this trend. Urbandigs appreciate your comments here that dispute these figures and your experience out in the field that will also dispute this as well.

Easy Come...Easy Go...More Gazumping Evidence of Active Manhattan Real Estate Market

For those wondering if there is still an inventory shortage in the Manhattan real estate market, I'm here to tell you...ABSOLUTELY! Gazumping just doesn't happen all too often in falling real estate markets and I and many of my colleagues have been victims of the gazump numerous times in the past 2 weeks. I can't speak specifically for my colleagues but my personal anecdote is this:

After negotiating an incredible deal with "eager" sellers of an Upper West Side Classic 6, my clients and I awaited delivery of a contract. After an unexplainable (we thought) delay in receiving the contract, I received the news from the seller's agent that another offer had come in about 5% higher than our agreed upon and accepted offer. The agent kindly gave us the opportunity to match the offer but my clients rescinded based on the level of renovations that the apartment required. As an agent who's business is largely representing sellers, I completely appreciate this scenario but I'm always wary of the gazumping offer actually proceeding to a fully executed contract. The ultimate decision as to whether a seller wants to risk losing the "bird in hand" is completely up to the seller and in this case money talked.

Its possible (and likely) that sellers are taking their units off the market in order to wait until the strong spring season, as it was noted in another thread there is a widening of the spread between the bid and offer on units, and that little volume is occurring as a result. This is due to buyers not willing to pay top prices in this market, sellers not willing to budge from the top. If you notice, for the most part, new listings outstrip new contracts by almost 2 to 1 every day, with the occasional exception, but inventory is plateauing. It is very likely that come spring you see an abundance of inventory come on the market at once. If the markets/economy hasn't recovered by then, could put pressure on pricing.

Econ101 - why would a potential seller wait until spring and not list now in the hope of capturing some of the bonus money activity ? From brokers I have spoken to, Jan/Feb is the best time of year to sell. But I havn't seen any hard data on that.

Ha. Good question. That logic may of gone out the door with bonuses and layoffs, when offers at ask did not come in. Again, I'm hypothesizing because it is impossible to know every seller's motivation, but it seems that unsold units are being removed from the market based on new listings vs. signed contracts and inventory levels, and I've heard first hand from a few sellers that they are waiting until spring, because they thought it was a better time to sell.

Curious to know where Spunky got the 6,000 figure from Jan. 2007. Inventory really stands at about 8,300 now. Urbandigs.com show about 5,300, but that is based on streeteasy, which reflects only unique web listings with a street address. There are many new development units, about 3600, that probably don't all have a web listing. (noah correct me if i'm wrong on this).

Econ101 here is a link of a chart that shows inventory on a per quarter basis. As you can see from the chart it looks like the trend of Q1 of 08 (based on urbandigs blogsite) inventory will be lower than Q1 of 07 and Q1 of 06. I am estimating that Q1 for 08 will come in at around 5700-5900. Should be interesting to see what inventory numbers for Q2 or 08 will be. Is there a possibility that the inventory of listings for 07 were of higher quality units (ie nice views, great location, nice layouts etc.) compared to that of 08. I think the best ones to answer that would be those who shopped (but didn't buy) for apts in Q1 of 07 and are still actively looking now. I believe RE brokers would also be a very good source for this information. Well here is the link

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1168396827bKurV&Record=6

It's hard to compare one guy’s inventory numbers to another when they are using two different methodologies. I think Urbandigs is giving us the best shot at seeing a live trend - regardless of whether the actual number is right or not, changes in level are what counts. We could just normalize everything to 100 when it went live. If he’s omitting a constant percentage of listings then it will still be correct.

In reality, for any given buyer, the inventory of interest is much smaller. I just did a search for 2+ bedroom, 2+ bathroom apts on the UES + USW between 1.25mm and 2mm. I got 465 listings. Remove the duplicates, drop the wrecks and take from the remainder the apts in a nice neighborhood, high floor, good light, good views, close to transport, shops etc and what are you left with? Less than 100 units? …. Whatever it is it’s tiny and in my opinion that’s the overwhelming majority of the force that’s keeping Manhattan prices from crashing.

If inventory doesn’t build I expect no price correction.

Econ101 - interesting. If a lot of people share the view of the sellers you have spoken to then we could well see a balloon in the spring.

I don't know if there has been any drop in selling prices since Jan 1 but listing prices certainly seem lower – particularly on anything that was overpriced. I have several saved listings for months with no activity. When I went to the open houses I was told "no way" would they move on the price. Now I'm getting streeteasy emails all the time that the prices have been cut. It doesn't mean that transactions are happening at a lower price - but it certainly seems like the unrealistic people are a lot more realistic now.

That has to help inventory – if an apartment is listed at 125% of it’s fair price then it’s added into the inventory numbers but for all intents and purposes it’s not really for sale so the inventory numbers are artificially high.

Spunky, that charts data by quarter. I'm guessing its using the inventory figure at the end of the quarter? In either case, what's interesting is that inventory, according to that chart, for Q1, Q2, Q3, and Q4 of 07 were at much lower levels than the same quarter for '06, but we really didn't see appreciation, suggesting demand was off by as much, especially when you figure in Spunky's theory that the quality of the inventory has actually deteriorated significantly. It will be interestin to see what happens if we get a normalization of inventory in the form of a glut of new listings come March/ April.

Econ101 here is a chart that shows monthly inventory data. Interesting to note that Jan 08 inventory is lower than Jan 07 and Jan 06. There are simply less apts for sale in Manhattan than the previous 2 years.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1168399259Jmtnq&Record=11

One other chart I find intersting is that for the Condo market. As you can see as inventory decreases and I beleive it will continue to do so for the Manhattan condo market in 2008 the price per square continues to rise. I am sure many feel the economy and national housing market will get worse but what if we see it bottoming out in the next 6 months and we begin the recovery phase. Think about it as you view this chart.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1172174113xJdGm&Record=12

TheStreets (olive branch here), in regards to your search (specifically the UWS), I'm not sure your result would have been that different in 2006 or 2007. I did that exact search late 2006 through early 2007, looked at over 60 places, and could not find a decent 2 bed / 2 bath. Those that were nice, were asking a lot based on comps (on a price / sqft basis) and were sold quickly. For the UWS in particular, I think a quality 2 / 2 has always been difficult find. Main reason, UWS is a haven for young couples with one kid (or one on the way) that want to stay in the city. The other thing is, once you have a quality property there is no amount of money (within reason) you could give me to give it up. It was such a difficult process, I have no desire to sell regardless of the profit I could make.

Econ101 / spunky, to add some anecdotal evidence regarding the inventory discussion, what I have seen (based on a small sample size of the buildings I follow) is the following.

Anything 3+ bed or that could potentially be a 3+ bed you are looking at $500-$600 increase on a price per sqft basis from this time 2007

Quality 2 / 2 – looking at $100-$200 increase on a price per sqft basis from this time 2007

1 beds – flat to slightly up from this time 2007

I agree the inventory is tight but I would argue that the quality of the inventory has not changed, but the disparity between good and bad properties has. What I think is happening is that good properties are appreciating in a consistent way (for Manhattan). Low to medium quality properties are trying to ride the coat tails of those good properties (as they did in 2006 & 2007), but buyers are calling bullshit. These “pig” properties stand out more today than they did last year, are languishing on the market, are taking price hits or, being taken off the market all together and dumped into the rental pool. Additionally, I think some quality apartments (specifically the 3 beds I spoke about) are taking price decreases, but based on the initial ask, are still ending up in a very good place.

Again, this is fairly anecdotal, but have watched this happen in a couple buildings over the past year, and it may explain some of the more macro trends we are seeing today. If inventory builds, you will not see dramatic price corrections on good properties, but low to mid properties will struggle. A couple things could happen then, people can now afford to buy these moderate properties and fix up (great result) or rental inventory will begin to increase (not so great a result).

Congrats JuiceMan on the 800th comment. Now accepting bets on who will get 1000.

Juiceman keep in mind renting a co-op is very difficult due to many restrictions so I don't see a dramatic build up of rental inventory being caused by sellers having difficulty unloading their non moving co-ops.