Household Income Falls 10% in Manhattan

Does not promote the bull case. As I've opined before the canary in the mine for Manhattan indicator to watch with regards to housing is not Foreclosures but Income.

No news. Absolutely no effect on anything.

Babs Corcoran said that the Brazilians and Chinese are rushing in to buy real estate, notwithstanding the ongoing collapse in the economy. After all, US jobless claims are DOWN MORE THAN EXPECTED, albeit only because last week's claims were revised upwards.

BULLISH!!!! Manhattan RE is not impacted by income.

Bullish. ARM rates went from 5% to 3%, more than offsetting the drop in income.

Absolutely no impact on Manhattan real estate!:

- they're not making any more land
- everyone wants to live here
- Brazilians, Russians and Chinese etc are stepping in to support the market
- strict coop boards have prevented over-leveraging
- there is little or no foreclosure activity in prime manhattan
- there is still lots of pent-up demand from buyers wanting to trade up
- interest rates are at historic lows
- jumbo lenders are re-entering the market
- quality of life has changed greatly since prior busts, eg mid-1990s
- NYC economy is more diversified and thus less reliant on Wall Street to support prices
- most people will always prefer to own despite high price/income or price/rent ratios
- NYC real estate is always a great long-term investment
- Barbara Corcoran says so
- OUR banks are too big to fail!

easy guys...clearly manhattan incomes, especially for IB and all the attendant professions, will more than bounce back for 2011/12...there's just too much good news in the pipe

raises, cash bonuses...all better...no more booboo

I'm more interested on the impact on restaurant prices! Hopefully we'll be seeing some bargain meals. LOL.

People just love headlines. Read the whole article, do some additional research, and you'll understand why this indicator won't negatively impact Manhattan real estate.

Everybody's moving back into Manhattan because they raised Bridge & Tunnel tolls. I can't believe that nobody's taking THAT into account!

"No income group was immune, said Mark Mather, a demographer at Population Reference Bureau, a Washington, D.C.-based nonprofit research group. "There was a drop for those making $200,000 or more," he said. "That shows that there are people at the upper end who are also seeing declines."

No one needs income, when we have rich BRIC millionaires. Its win-win! Real estate NEVER goes down in Manhattan. Ever.

Glad you're on the team, jason!

Expect to see rents going up though. They are driven primarily by landlords' level of expenses, which are increasing.

"They are driven primarily by landlords' level of expenses, which are increasing."

No they're not. Only regulated rents are related to landlords expenses; as with all things economic, property prices are a function of output value, not input cost. In the case of rents, they are directly related to personal incomes, and severely constrained by them: 40x monthly rent in income is the max, and if your income goes down, so does the amount of rent you can pay.

In my Dumpy Rental building, over the past 3 months they have been trying to raise rents - without success. All they've done is drive people out, and now vacancies are at a high not seen since 2008/2009.

It is the same throughout Manhattan - check nybits.com for market rentals: the supply is enormous. Next step we will be back to one free month.

malthus was joking, steve

"Everybody's moving back into Manhattan because they raised Bridge & Tunnel tolls. I can't believe that nobody's taking THAT into account!"

No they're not. People take public transportation.

think I can renegotiate my parking? Goes up in Oct.

Really, WB?

"People take public transportation."

PATH is up to 2-smackeroos. If that doesn't bankrupt Merrill Lynch's trading desk, nothing will.

Really.

Thank goodness.

You know that means prices will go up! If you say it it will make it so. That's the broker's motto.

Morton's has brought back dinner for two for $109. Back in 2008 it was something like $79. Tells you "high end" diners are pulling back as well.

This will only mean desperate sellers are marking up the prices based on their broker's recommendation.

West 34, I'm assuming there's more than a hint of irony in your list of why declining income won't affect Manhattan RE. Brazilians! Chinese! Russians! If we're counting on wealthy foreigners to keep the real estate bubble bubbling, we're in trouble. They won't add a cent to our tax base, and when we start cutting essential services like cops, firefighters, teachers, parks department, as we've already done, New York won't look nearly so attractive to foreign investors.

A friend who just moved from London, a very expensive city to live in, has found New York so expensive that she's looking to move to New Jersey. Another smart, ambitious, income tax paying citizen lost to New York.

Babs Corcoran said the Brazilians are moving in. I think Brazilians are cute, and I love the language.

Win-win as far as I'm concerned.

Tax base? Is she hot?

Well, redpoppy - China is contracting, the dollar is rising, and the Bovespa fell 6% today.

Maybe it'll be a surprise revisit from the Irish Carpenter.

"Babs Corcoran said the Brazilians are moving in."

Since the beginning of September, the Brazilian Real has lost 13%. I can hear the Miami market exploding from here. If they were looking in NY, they just slowed down at the very least.

Babs Corcoran said the Brazilians are moving in."

mid town east is falling like a brick- tell to move in there liven up the area!!

"A friend who just moved from London, a very expensive city to live in, has found New York so expensive that she's looking to move to New Jersey. Another smart, ambitious, income tax paying citizen lost to New York."

The marginal taxes, including payroll, state, and Federal, can, depending on your income bracket (think middle or upper middle) actually be higher in NYC than London. Ad to that not having to pay additional for health care in the UK, and I can believe (having lived in both and going to London 4-6X a year.)

We should just throw a Real Estate Samba Party, ending with a giant piñata in the shape of Donald Trump's head, then encircled by a Chinese New Year dragon and a horse's head in somebody's bed, just to get all the ethnicities involved.

Then do a Zorba the Greek stoning at the end, for denouement.

Takers?

"Babs Corcoran said the Brazilians are moving in."

FREE WAXES FOR ALL!!!!
Leave it to the Brazilians to get into every nook and crany.

if i am left with one errant hair.......

is their something that can be done to attract the indians? a self flagellation festival?

That, WB, is because you went the discount route.

Thanks for a great laugh stevejhx & falcogold1 - I have to read this otherwise I will cry watching the markets tank today (thankfully I am long on "cash" these days...) At that RE Samba - don't forget to burn a basket of Three Leaf Clovers and do a jig while stoning a Bull Fighter along with Zorba!

"Emerging-Market Stocks Tumble Most Since 2008 on Growth Concern..."

http://www.businessweek.com/news/2011-09-22/emerging-market-stocks-tumble-most-since-2008-on-growth-concern.html

"...Emerging markets face capital exodus again...

....n the last seven weeks, the Korean won has skidded 12 percent lower while Russia's rouble has dropped 13 percent versus its dollar-euro basket. Brazil has lost 14 percent of its value against the dollar this month, chalking up its biggest one-day falls since October 2008...."

http://www.reuters.com/article/2011/09/22/us-emerging-capital-flight-idUSTRE78L4DV20110922

Rich BRICs to the rescue!!!!

The minute I saw the Four Seasons Restaurant - not the one at the hotel - give a discount, I knew that things were bad. I have never seen them on the restaurant week or discount circuit ever. This was a few months ago.

Hofo the Palm has those great discount dinners as well. Add in though taxes, tip, and if you have kids babysitting and it's still a big night out

Palm's and 4 Seasons as well? If Peter Luger offers a discount, we are doomed.

Then we have to get to Brooklyn - well it's not that far

we are doomed if they start accepting amex!

Rn't they 4-leaf clovers?

FYI, WB, self-flagellation, or "auto-da-fe," is a decidedly Portuguese act (hence "auto-da-fe" = "act of faith" business).

Ergo, the Brazilians can be at least part "in" on that, and if you're gonna get self-flagellated by anybody, it might as well be a Brazilian.

more good news for RE

http://www.bloomberg.com/news/2011-09-22/el-erian-says-world-is-on-eve-of-next-financial-crisis-over-sovereign-debt.html

What does he know?

don't know. sounds like Elmer Fudd though

My fave is Elmer & Bugs in Die Valkyrie. A true cartoon classic.

Riversider would say that this is all proof that hyperinflation is JUST around the corner. Like it was in 2008, 2009, 2010, and so far in 2011. We are INCHES away.

Even though commodity prices crumbled over the last three months. In dollars, Euros, Swiss Francs, Gold, whatever.

Just...moments away.

http://www.bloomberg.com/markets/commodities/futures/

mere...seconds...

Hyperinflation only occurs if governments truly print money - that is, just make deposits with banks of money that doesn't exist, getting nothing in return. What the Fed has done is not classic "money printing"; it is monetizing assets by taking them out of circulation. It does create money, but doesn't cause hyperinflation.

However, it can and does cause inflation, which is what we're currently seeing in asset prices. That was the Fed's stated objective with QE2, and it succeeded. It avoided deflation. But since the increased money supply was not matched by an increase in the velocity of money, all it did was cause stagflation and made things worse.

Uncle Ben's problem, methinks, is that he's using the Depression as his model. Bad model. Finance has changed enormously since then. Finance has changed enormously since 1980, in fact. It seems like not enough academic research has been done into the effect of today's leverage and how it differs from the 1929 leverage. I don't know the answer to that, but I do know that the last crash was caused by a deflated bubble, so the solution couldn't be to reflate the bubble again. There had to be a different solution. I think if they had just left things alone instead of QE2, we'd be a lot better off right now.

Did I mention that the price of tulips has still not recovered...?

Jason - speculators BEGONE!

Did I mention that the price of tulips has still not recovered...?

neither has the NASDAQ composite or NYC RE

Or Sperry Univac.

But Steve was saying that Tullips have not recovered from their bubble prices in over 300 years. Three. Hundred.

The whole problem with tulips was foreseeable: they only grow in places where the ground freezes, because if the bulbs don't freeze, the tulips won't grow.

Nobody wants to live in places where the ground freezes. Ergo, nobody wants tulips.

Capite?