Area Rents continue climbing , demand strong

Hmmmmmmmmmmmmmmmmmmmmmmmmm, low supply? Strong jobs? What's a bear to do?

Yield curve is extremely steep right now. This particular metric usually point to strong growth. I'm not sure, but certainly interesting.

"What's a bear to do?" Take your single digit rent rise and soon your rent will be where it was in 2008. Bide your time while sales and prices fall (see other thread).

or read on to the part that riversider left off:

"Q Demand appears to be strong for rentals. Why?

A It’s really the freedom of renting. People are finding that owning a home isn’t like it was 20 or 30 years ago when they saw it as an asset. People aren’t seeing the growth in the value of the property the way they used to, so they’re opting to rent. And oftentimes you can take a step up when you’re renting compared to what you can afford to buy — you can get something a little nicer."

>or read on to the part that riversider left off:

Interesting. I read the headline of this thread, and I didn't see anything about owning or buying.

>And oftentimes you can take a step up when you’re renting compared to what you can afford to buy — you can get something a little nicer."

Funny. For columbiacounty who was dragged around to places on the Upper West Side to look at ... horror ... places with a WINDOW IN THE SHOWER. How's that for "something a little nicer".

Question for you columbiacounty, you have an outhouse up in Columbia County? Does it have a window to vent your own stink?

Sigh. I miss the window in the shower of my old place. Looked out over the rooftops and had morning sun.

It has been quite a lot of time biding for the bears now . . .

If the trend continues it bodes well for CAP RATES

Trend huh? You might want to re-examine why something that supports your beliefs is a trend, while something that does not is soiled by one-off events...

ha!

Yeah, when the guy working for a rental company is talking up "mid single-digit" numbers, trust me, reality is probably not that pretty. Did you notice how he rents and plans on doing so? Doesn't quite sound like the actions of a guy bullish on strong rental rate growth.

im 2 months into a yearly rental....

...researching up to date comps in this short time.. quick, what's a legal loophole to further up the rent as only after 2 months he's already getting a great deal compared to the 10 year older building further 2 blocks uptown with similar floorplan?

Couple of suggestions, hole:

1) Put a window in the shower.
2) Accuse the tenant of not cleaning the shower grout.

Okay, here's an anecdote from someone who is not an investor in apartment buildings - I stop and look at ads in windows of Village and UWS realtors and ............... my jaw drops. All this data analysis is interesting, but none of it has the visceral gut-stabbing effect of window shopping. The rental mark is strong and climbing. Blather all you want; it's undeniable.

I'm going to continue to bet on an overall trend where rent goes up while sale price goes down.

>I'm going to continue to bet on an overall trend where rent goes up while sale price goes down.

Yes, but inonada will be able to outsmart everyone.

>Did you notice how he rents and plans on doing so? Doesn't quite sound like the actions of a guy bullish on strong rental rate growth.

Yes, he rents in one of his own company buildings. He's not from NYC and he will likely leave NYC within a shorter than typical timeframe.

But now I've just read a post on another thread that says rentals are suddenly dead, so my ancedotal gut experience may be already outdated. Things change quickly.

Brokers are pumping up rents as if it were 2005, but the reality is far from the truth. The only reason rentals are doing better than they should is the difficulty in getting mortgages -- and the continued upping of taxes and closing costs. Plenty of rental units are languishing, especially those with 15% extortionist fees, and there's just not that many people looking to rent. Everyone should take a long hard look. Either price to move or price to wait. Kill your business and your reputation, why don't you.

In the context of stated inflation and expected economic growth mid-single digit growth is very high.

http://www.bloomberg.com/news/2011-07-01/manhattan-apartment-sales-decline-as-buyers-see-no-need-to-rush-for-deals.html

you say tomato i say tomato.

while manhattan is the home of many a teflon type, it will not escape its reckoning -- just as the roman empire, ottoman empire, british empire, napolean, etc., etc. (not a history buff), could not. it's just a matter of who's got the NUTS to wait.

in the financial markets, a bubble without momentum is one primed to burst. it's all about momentum when talking bubble. manhattan has flatlined for several quarters now. the timing is in place for the drop. nothing intense but a drop in prices nonetheless. if things go well, it will be this way for years, until the next cycle can begin. if things dont, it is primed to drop some 10+% AT LEAST in one year.

well, a round of layoffs this year could trigger a drop

i aint rooting for anything as bad as a round of layoffs. the trigger can be one of too many different things, not the least of which, ironically*, is a jump higher in rates (*given that this normally correlates with a strengthening of underlying growth prospects.) A move higher in rates can result from factors of not such salubrious quality given their descent has been the result of such desperation on the part of policymakers. price appreciation expectations from here are so negatively skewed, that if manhattan doesnt go lower before going higher, id for one consider it a miracle. yes, a miracle in the full sense of the word. i can create such a long list of potential negative triggers. the positives right now are about one in length: very low rates.

Buying is a great way to hedge against increases in housing costs. Condos & Coops are non-profit.

Wow, a full-on miracle? Blessed be.

BTW, I'm with you on the momentum thing. Brokers are talking about a period of flat prices. The bullish view is making low "safe" single-digit returns on your money while partaking of various govt subsidies and the status quo being maintained. If the bullish sentiment is that weak, anything could trigger it. Of course, idiot pundits will blame it on the trigger. Uh yeah, that was the problem the whole time...

exactly Nada. always gets rationalized as "if it hadn't been for this" after the fact. when in reality that one so-called trigger was the consequence of a myriad other factors which had predictors of their own. it's all one big correlated bet -- everything co-exists and there is no de-coupling.

help77....jerk jerk jerk jerk jerk

nada....faster, faster faster...

whatever...the guy deserves it. plus i agree with him, which makes it that much easier. i never kiss ass if i dont believe in it. not ever.

All these RE-market discussions of the past few years go around in circles, coming back on the low interest rates. Whatever caused the low interest rates, for whatever reason they have continued, it's still the big driver of high prices, just as much in prime Manhattan as in subprime Las Vegas. So we've heard lots of reasons why it has to change, yet it never does. When? Seriously, what is it going to take for interest rates to normalize? Even ignoring the stimulus on RE buying of low mortgage rates, there is no such thing as an old-fashioned savings account, because they don't pay a red cent in interest. Not only is there no reason not to buy everything from cars to too-big houses to bubble gum on credit, but a conventional passbook savings account is $$ down the drain. What will it be? The Fed allowing the market to find its appropriate level without manipulation? The Fed manipulating the water levels?

There's been a shift from owning to renting. Rental vacancy rates are down. The stories of one or two months free rent are for the most part gone. Bears wake up, this is supportive of rental rates.

lowery. well what is there to be said? the Fed wants you to reach that conclusion. i have nothing more to add. i for one think that the bulk of the Fed's influence is behind us. even the almighty Fed suffers from economies of scale.

What did the Fed do?
Raise asset prices
Raise the inflation rate
Transfer wealth from savers to banks
Become the most profitable hedge fund ever
and increase the probability of another bubble down the road.

And then they came for you.

and yet cream cheese continue to get cheaper? WTF riversider? YOU social security chking talking your book shut in.

Not sure what you mean, help77 - is the Fed going to now ease up, sit it out, or has it run out of ways to keep interest rates low? This has been mindboggling now for some 10 years. How much lower can low go? And for at least 10 years people have predicted rates will go up. What will it take for them to go up?

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it's run out of ways to be overt about its rate manipulation. naturally there is no shortgae of ways it can subvert its operations. what im driving at is that the bang for their printed buck (no matter if its overt or behind the scenes) can only go down and has already done so. The reason being is that the market beast has wised up as to what to do with all the excess liquidity. it turns out the powers that be dont always like what the market delivers. keep in mind that up and till a few months ago, i.e., before there were apparent signs of slowing down, rates were on the cusp of breaking up. This, despite, the fact that the Fed's latest printing program was in full throttle. Commodities were going parabolic, and all manners of market based indicators of a loss of confidence in fiat currency were flashing lift off. This sort of stuff scares policymakers and can easily lead to bigger and worse problems for politicians. So be assured that if the Fed keeps trying to pump liquidity the market will spit it out the same way it was doing just a few short months ago. The Fed has taken note and has turned down the printing presses for now. of course there is no guarantee they wont turn it on again, but that would only occur if things got much worse quite quickly. on top of all this of course, china needs to normalize and needs to stop buying as much treasuries. you can be sure with all this debt ceiling meddle that unless some credible measures are taken, given the developments in the mainland as well, china's war chest is gonna be tied up for awhile, and indeed, treasuries have the potential to slide slide slippity slide.

...when you're living in the city it's do or die. :]

bottom line is that since the fed has realized it needs to chill, this means the banks are going to have a harder time making free money. they may hoard even more cash than they already are in most parts of the country. in my view the key is china. it really needs to slow down if NYC RE is to come in.

thx, help77, but the gist of what you're saying, that the Fed has run out of ways to manipulate, has been repeated for years now - still no change - also dire predictions about China that never come to pass

i didnt say theyve run out of all ways to manipulate -- i said only overt ways. furthermore, again, even if they give money to the banks through other channels, the market has proven that it will find ways to exploit this through the commodity markets if not through the selling of treasuries. will credit remain cheap -- perhaps for insitiutional investors and corporates borrowers -- but not necessarily for the jumbo mortgage applicant. as for china, you only need to read their local newspapers (translated in my case) to get a sense that they too at the very least find themselves on a bumpy road currently. their manufacting numbers for 2 months running have been flattish, pointing to minimal expansion. for a country known to fudge their numbers, this is a warning sign. and again, for an economy that has grown on average 10% over the last 10 yrs to start stalling primarily because the government has chosen to limit loan quotas is a sign that the government is scared to death of inflation. there have been several riots in china over the past year for such reasons. the small business in china is getting squeezed because th banks over there would rather use thier quotas to lend to quasi govenment sponsored RE development types and municipalities, and meanwhile they constitute 60% of china's GDP and are the most efficient part of their economy.

well, inflation is fudged in the US bigtime
don't like the inflation rate?
change what you call core items - let's leave out food, for instance

I have no idea what the Fed is trying to do here. I think they don't know. I think they've been lost in translation ever since they hit zero percent interest.

Core inflation number was invented by Richard Nixon, aka Tricky Dick. Maybe next we'll have a inflation excluding bad stuff.

when was he chairman of the fed?

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Re.: "in my view the key is china. it really needs to slow down if NYC RE is to come in."

China recently says it has tamed inflation. Thoughts?

http://www.cnbc.com/id/43517796/Chinese_Premier_Declares_Inflation_Victory