Buffett on RE and the economy in 50 words or less

Not much, since all of my clients indicate a drastic drop in business since September.

It sounds like Buffet is no longer objective. He's in the White House's corner on policy, probably helping them out and benefiting as in BAC.

Buffett's never been "objective": he's one of the shrewdest guys around, with a sense of humor that kills every time.

All of the data indicate the economy is slowing to a halt or worse. Bernake said the same thing, and the volatility in the stock market confirms it. Last time there was a "key reversal date" like the one we saw yesterday was November 2008.

And that's what we're reliving: 2008 / 2009 all over again. My Dumpy Rental had people lined up out the door to rent just 6 months ago, mid-bubble. Now, there are at least 20 apartments vacant, they keep on lowering the rents, and nobody's biting.

Ditto all other market-rate buildings: rents are up, and availabilities are sky-high up.

Steve, so you think Buffett's comment is tongue-in-cheek? Fascinating.

As for all these vacancies, I think it might be a product of your building/neighborhood. Here in the "hinterlands" things ain't so bad for rentals:
http://therealdeal.com/newyork/articles/chetrit-group-developed-175-kent-avenue-gets-fully-leased-in-four-months-according-to-aptsandlofts
http://therealdeal.com/newyork/articles/42425
http://therealdeal.com/newyork/articles/41320

Did I say "tongue-in-cheek", bjw? No. I said self-serving.

Actually, you didn't say that either. Riversider essentially did. Wait, are you Riversider? Mystery solved! Bottoms' world will be turned upside-down!

The more things change the more they stay the same.
Buffet is a cheerleader in a confidence game.
You are the crowd.
Your beginning to think this 3 Card Monte game just might be fixed.
What kind of people conduct business on a card board box?
Warren smiles and throws down 3 cards...
You could make it all back right here.
Back to the way it was.

Ain't never going back.
Wash,Rinse,Repeat
Wait for it to fall out

bjw - you're sad.

another way to phase it: buffet's always talkin position

he's a wonderful guy (i loved the lowenstein book) but only a fool would think he would say anything ever that is not meant to further his interests

bj--get outside, get some fresh air, try to make a friend--it's not going to happen here--youre too well known

WB, they should untroll you - makes no sense, your input is valuable and your humor much appreciated.

Buffett's comments must always be taken for what they are: anything that will further his interest, until it doesn't anymore. For instance, he said the Geico salamander was Australian. Wrong. He's a spiv.

Not sure where you guys read that I agree with Buffett. Simply posted his thoughts, as they are usually interesting. Certainly more than anything I've seen come from you two.

Steve, I thought you were ignoring/not responding to me anymore. What happened? And SE knows what they're doing re: greying people out. Just because Bottoms fawns over you does not mean his "input" is all that valuable.

You see, bjw, I was trying to be nice to you, but that is obviously not possible.

steve, where do you think the people went? The population of NYC hasn't changed in that time. Only so many of them died. And I doubt any are now part of the unemployed. This always baffles me.

Steve's great grandmother had 11 children.

DB, I just got my lease renewal yesterday - 10% on a 2-year lease, which I took out at the bottom of the market. Even though I can easily afford it I'm still not renewing it b/c I'm moving to Ft. Lauderdale where the costs of housing are half, but I think the QEII bubble is bursting.

The problem is that incomes determine rents, and incomes did not rise and are not rising nearly as much as owners tried to jack up rents. They saw a 35% increase in the stock market in the year (all evaporated now, just about) and thought that the sky's the limit.

Steve, how do you explain the links I posted? That's a LOT of rental traction.

Ft. Lauderdale......aaaaaaaaaaaahhhh

Gated communities as far as the eye can see.
At town where 4:20 means dinner.
What's the state bird?
ambulance or hurst?
I forgot.

No gated communities, FG, though 4:20 does mean dinner!

Absolutely, bjw: "The building, between North 7th and North 8th streets in Williamsburg, was originally built as a condominium but was converted to rentals"

And still plenty of avails:

Apartments in Williamsburg:
$2,213 Studio at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,406 Studio at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,454 Studio at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,454 Studio at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,537 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$2,550 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$2,550 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$2,584 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,646 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$2,949 1-Bedroom at 111 Kent Avenuephotos - 752 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 27/Sep/2011
$3,080 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$3,085 1-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 22/Sep/2011
$3,128 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$3,138 1-Bedroom at 224 Wythe Avenuephotos
posted by broker, Apts and Lofts 16/Oct/2011 29/Sep/2011
$3,145 1-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 27/Sep/2011
$3,176 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$3,176 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$3,176 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$3,235 1-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 01/Oct/2011
$3,320 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$3,368 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 08/Sep/2011
$3,465 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$3,503 1-Bedroom at 111 Kent Avenuephotos - 784 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 26/Sep/2011
$3,561 1-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$3,595 2-Bedroom at 111 Kent Avenuephotos - 938 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 26/Sep/2011
$3,780 1-Bedroom at 224 Wythe Avenuephotos
posted by broker, Apts and Lofts 02/Nov/2011 29/Sep/2011
$3,835 1-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 06/Oct/2011
$3,850 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$3,850 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$3,898 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$3,976 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 25/Aug/2011
$4,095 2-Bedroom at 224 Wythe Avenuephotos
posted by broker, Apts and Lofts 02/Nov/2011 29/Sep/2011
$4,100 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 05/Oct/2011
$4,100 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 17/Sep/2011
$4,100 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 25/Aug/2011
$4,149 2-Bedroom at 111 Kent Avenuephotos - 1165 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 26/Sep/2011
$4,200 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 19/Aug/2011
$4,235 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$4,331 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 07/Sep/2011
$4,350 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 04/Oct/2011
$4,518 2-Bedroom at 111 Kent Avenuephotos - 1087 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 26/Sep/2011
$4,615 2-Bedroom at 111 Kent Avenuephotos - 1180 sqf,doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 26/Sep/2011
$4,620 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$4,703 2-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 06/Oct/2011
$4,795 2-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 06/Oct/2011
$4,812 2-Bedroom at 568 Union Avenuephotos - 2 elevators
posted by broker, Apts and Lofts 12/Sep/2011
$4,846 2-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 27/Sep/2011
$5,100 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 01/Oct/2011
$5,200 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 05/Oct/2011
$5,200 2-Bedroom at 184 Kent Avenuephotos - doorman,concierge,gym
posted by manager, Roseland Property Company 04/Oct/2011
$5,400 3-Bedroom at 184 Kent Avenue - doorman,concierge,gym
posted by manager, Roseland Property Company 04/Oct/2011
$5,565 3-Bedroom at 224 Wythe Avenuephotos
posted by broker, Apts and Lofts 02/Nov/2011 29/Sep/2011
$6,369 2-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 27/Sep/2011
$6,918 3-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 27/Sep/2011
$10,015 3-Bedroom at 111 Kent Avenuephotos - doorman,concierge,gym,garage,elevator
posted by broker, Apts and Lofts 27/Sep/2011

"The building, between North 7th and North 8th streets in Williamsburg, was originally built as a condominium but was converted to rentals"

Yes, Steve. It's 111 Kent, where a bunch of your listings come from. That's been on the market two weeks. It's already over 50% leased. That's traction.

So what's your point? There are always available rentals in every neighborhood (especially one as big as Williamsburg). Just noting two or three brand new buildings (one of which is renting out quickly) doesn't at all demonstrate that things aren't renting at all. The snapshot tells you very very little.

That was from the link you posted, bjw. I have no point beyond that.

"50% leased" = "50% vacant"

Here's another great line: "According to data from Streeteasy.com, a 451-square-foot studio unit in the former candy factory rented for $1,850 per month while a 923-square-foot, two-bedroom penthouse was rented for $4,700 a month."

Streeteasy doesn't publish rental prices, only asking rents. Lies, lies, and more lies.

You say there's "traction"; I say the place is empty, and the condo buildings are going bankrupt.

"50% leased" = "50% vacant"

Only you could spin that into a negative. They key fact here is 50% rented DAYS into marketing. If it were sitting around for months and months, you'd have a point. But that hasn't happened yet. It might, but the trend says otherwise.

"Streeteasy doesn't publish rental prices, only asking rents. Lies, lies, and more lies."

Lies about what? Do you think they're going for half asking? I'm sure there are minor discounts, but then again, the article did say this: "Streeteasy.com shows asking rents are slowly beginning to rise on some of the listings." You simply don't know what you're talking about.

hearing a bit of a contradiction, steve, about the Ellington - on one hand you said no one's renting and they're chock full of vacancies - on the other hand you just got handed an offer for a 10% increase on a 2-year renewal (I think I had predicted they'd take your initial pre-free-rent-amortized nominal rent and then tack on a very small increase) - so if your concession rent was an 8-1/3% discount over the supposed nominal rent and they ask for 10% more than what you consider your rent, it's only a 1-2/3% increase over what they supposedly asked for two years ago (a little less than I thought they'd ask for, 2% over the supposed rent two years ago). You say, "The problem is that incomes determine rents, and incomes did not rise and are not rising nearly as much as owners tried to jack up rents." But they are not lowering the rents to where you believe they should be, so this is a dog chasing its tail. You say they need to lower the rents, but they don't apparently feel the need to lower the rents. ????

steve - do us all a favor and just for kicks negotiate the lease renewal on your current place. that one data point could be priceless ;)

"Lies about what?"

Realtwhore lies.

No, lowery, no contradiction: the reason for the vacancies is that they were asking for much, much higher prices just a few months ago. The rent that they are currently offering me is less than the nominal rent of the apartment when I rented it, with two free months' rent. According to the doorman (and he knows EVERYTHING) they made a conscious decision to lower the asking prices for rents because the market softened a lot starting in August, and what they offered me is less than what they will put it on the market for.

Actually, I think the rent they're offering me is an extraordinarily good rent, and given the markedly different economic conditions since 2009 the 10% (9.7%, actually) increase they asked for is not out of line with incomes. Unemployment was much higher in 2009 than it is today, though there are indications that unemployment - especially in the city - will be rising again.

I'm still moving b/c I already made the decision to move and rented a townhouse with a private garage in Wilton Manors for half the price of my rent here, and most of my family lives in Broward and Palm Beach. Just makes sense.

BUT - the new rents they are offering existing tenants are very fair, IMHO, and also 25% than what they were trying to get over the summer.

Or lowery, the other alternative is that Steve is making more money now than when he signed his last lease, so the increase is just matching Steve's increased income. He's said he doing well, and even w67thstreet lashed out at Steve in an extreme fit of jealousy a couple weeks back.

25% than = 25% LOWER than

That is also true, HB - I expanded my business a lot and got a lot more clients around the world. The rent that I'm currently & would be paying is not burdensome...

...but the thought of having a 1500-square foot townhouse with a garage for $1900 a month is very, very appealing. I am of the opinion that if I never own a piece of property again in my life, I won't care.

"Realtwhore lies."

Until you can demonstrate a shred of evidence that the actual rents were lower, calling them "lies" is a pretty big stretch on your part. But believe what you want.

So, now that you're moving to FL, will you still be posting around here? How much interest will you have in NYC RE?

Uhm - the lies comment was that streeteasy published actual rental prices. They don't, so I'm standing by what I said.

Don't know what I'm going to do in Florida till I get there. Where I'm moving it's really all full of NYers, anyway, like my relatives, so who knows. For the time being I'm only worried about what car I'm going to buy; BMW 3-series, most likely - had one in London & it was the best car I ever owned, better than my Mercedes and Lexus combined.

stevejhx, are you retired?

Steve, how much are they asking a new tenant for the apts in your line, the one people argued about and parsed the floor plan of a couple of years ago? As long as you really don't give a @#$%, why not counteroffer an even lower rent to renew?

>better than my Mercedes and Lexus combined.

Seems kind of awkward to combine cars, maybe the fact that you didn't do it with the BMW was the reason you preferred it in the end?

"Uhm - the lies comment was that streeteasy published actual rental prices. They don't, so I'm standing by what I said."

Who does? Anyway, your point was that there are tons of vacancies just sitting around, unrented. Doesn't seem to be the case everywhere. Maybe your management company did some poor marketing? Or the building/neighborhood just aren't that in demand anymore?

DB - I will never retire. I don't know what I would do. My father retired at my age, sat on the sofa drinking coffee (and lots of other things) for years.

There are no units for rent in my line right now, but the A line, which has no balconies (I have two - one of which I never use) the asking price is about $4100 a month, which is more than I was offered to renew my place. The A line is a very apartment, though, but I'm sure they will be asking considerably more for mine.

I'm not really interested in renewing - I already have a place to go in Ft. Lauderdale and I'm looking forward to going. I can always come back if I don't like it, but I'm at peace with my decision.