NYC real estate is screwed???

yes, but why does that scare you? Prices coming down will be good for all. Oh, Except those that have purchased RE in Manhattan in the last 10 years.

Oh Yea, Don't expect foreign investors, they have their own problems.

Bob Bob Bob..........
Relax
Couple of cubes in a tumbler with a straight pour....Bob's choice.
Seen it before
Bubble just deflating
No drama
A slow even hiss that vanishes into the background of life.
People used to get rich selling cloths in this town.
It will never get as cheap as you think, as you marvel at the exorbitant price of milk.
The constant is change.
Be vigilant
Get you buy posted on the successful low ballers thread.

Get your buy....whoops

Pour me another Bob

don't understand bob's point. currently the listing prices in nyc are still very close to or even higher than 2006~2007 peak price, what the hell does he worry about?????

are you really saying that 1BR and 2BR apartments are selling for the same price now, as they did in 2006?
Can you please provide one example...just one single example...and not some 10,000 square foot brownstone...and the example is not an asking price, it's a closed deal.

Good Luck

Just an off year. Hardly a new trend.

2011 was an off year? so 2012 is looking bright?

uwsr- "listing prices". I think he was poking fun at those RE brokers trying to sell today at yesterdays prices.

actually it's only a problem for people who bought in 2007 and only for those who want or need to sell in the near future. It is great for everyone else.

Oh Yea, Don't expect foreign investors, they have their own problems.
- - - - - -
On the contrary. Expect foreigners. Part of European austerity means rising taxes. Those with means always view the U.S. as safe haven or the closest thing to a mattress. And real estate unlike a CD has the potential for undocumented rental income, deferred appreciation or a place for a child or relative to stay during College.

And don't forget about China. They're buying- and all in cash.

With the Euro crashing vs the $, it's a great time for Euro buyers who bought in the US during the bubble to unload their property and offset their loss ... Break even now or be a loser forever!

Can't agree at all, the exchange rates are no where near 2005 levels, the transactions costs for real estate are too high, and where does one put the money after selling real estate? Equities, Euro debt, a t-bill earning 0% or U.S. equities that aren't pricing in the coming economic slowdown. What we're seeing right now is the unleveraging of financial assets. With real estate in the 7-9th inning of the correction phase, now is not the time to sell, but to hold on or build a position.

>With real estate in the 7-9th inning of the correction phase, now is not the time to sell, but to hold on or build a position.

Why build a position during what you acknowledge is a correction phase?

Why not wait until the "first inning" of the growth phase and invest then?

>U.S. equities that aren't pricing in the coming economic slowdown.
Under what scenario are equities a bad investment because of a "coming" economic slowdown, but real estate is a great idea?

"And don't forget about China. They're buying- and all in cash."

This cracks me up. if all of these foreigners are buying(all in cash).. then please tell me why RE is still falling!!

RS-- "in the 7-9th inning of the correction "--

So you are saying we still have further to fall--

so why buy if prices are still going down. The will never appreciate as much as they did in the past. They appreciated as much as they did in the past to feed the bubble.

So you are saying we still have further to fall-

i'm saying we're in the process of making a bottom, and that there's not a ton difference between buying with 5% more downside and having bought with 5% already on the upside. Real Estate is not stock, it's not zero transaction cost and it's a long term commitment.

Market timing is a bad investment strategy, in my view trying to to do so is a recipe for losing money.

Market timing? So buy gold $1500 ounce. So buy oil at $150 bbl. buy nyc re at $1500psf.

Did not know that you could dollar cost average nyc re. Riversider is a cream cheese eating financial genius.

Can you market time bubbles! Absofkinglutely. I did and will

riversider is complaining about an increase of 49 cents on his/her stupid oatmeal but doesn't see a difference of $50,000 on a $1 million purchase? how much of a deal do you need to get on the frigging oatmeal to cover $50K?

Is there a breakeven price per gallon of premium unleaded gasoline that makes living in NYC more economical than living in Columbia County?

since when is money 'lost' it's transferred.. and where do the head honchos live? not pittsburgh

Not sure you guys got my point. If a Euro buyer bought in NYC between late 2007 and late 2008 when the exchange rate was around $1.48/1Euro, he can offset the 20% drop in market price buy selling today at the current $1.28/1Euro exchange rate and break even if he wires himself the funds back in Euros. To anyone who do that, it's still be quiet remarkable to unload your real estate investment bought within the last 4 years and not lose any money!

Likewise. Buying my wife her Paris apt just got 20% cheaper.

But continue to argue if we had a nyc re bubble and if it has bottomed yet! Flmaozz.

I'm thinking buying a Beneteau 57 in Greece when it implodes with the good ole US$ gonna be pretty sweet

No, I got it. I just don't agree. The new normal means everything returns less. Short of advocating a 100% allocation, I'm advocating a position that real estate over the next say ten years may be a better place than Mr. European's alternatives.

W67th, move to Paris and treat yourself with this loft:
http://www.espaces-atypiques.com/retiree-de-la-vente/loft-avec-2-verrieres-paris-20e/
At $1.7M, you'll be living the life. Also, in Paris, your kids would get a good education & colleges for free!

ok so 10 years then.. not 5.. if thing's work out favorable I get 15 years.. so I guess we are not too far off. But, Still buying RE in Manhattan is not a good investment unless you know for certain you will be living in the same pace for at least 10 years.. One thing no one else is factoring in is the optionality of renting. What is that option worth?

sure Sledge if you are a euro.. Another reason why foreigner will not be buying here.. they should be a SELLING!

Im not saying prices are down a lot since 2007....im suggesting that this secular change in wall street pay is going to effect nyc housing for sure. This time, nobody thinks its going back up. The party is over.

Rents will go up at least, if you own and rent it out

"this time, nobody thinks its going back up. The party is over."

some pollyanna brokers on this site think they will.. Very doubtful they will go up anytime in the near future.. better off renting.. Not buying

If owners who are sitting on mindblowing MULTI-million dollar profits decide to cash out their lottery winnings for not being renter pooorz for the last 30 years, this would create downward pressure on real estate.

Pets.com, tulips. Anything else similar to real estate?

I dig that paris apartment but, If I'm moving to France, it's going to be the south of France.
Rumor has it that they wear no pants....

hburg, pets.com is similar.

Could you rent pets.com?

Could you live in a share of pets.com?

Did tulips provide cash flow?

Could you paint the petals of the tulip pistachio color only if you owned it?

If owners who are sitting on mindblowing MULTI-million dollar profits decide to cash out their lottery winnings for not being renter pooorz for the last 30 years, this would create downward pressure on real estate.
----
The opposite occurs too, Owners take advantage of declining prices and trade up for space they need. Best time to do it too. In an upmarket the trade-up means you're always one step behind the price increase.

>In an upmarket the trade-up means you're always one step behind the price increase.

So this trade up is a stretch that requires market timing?

- I am surprised that after Lehman and Bear, people on Wall street had high hopes of bonuses. Every one who got big payouts in 2009 knew that it was unusual year for the firms who survived. If the bonuses were to remain high, real estate will be 30% higher.

- In addition, the biggest impact of the lower bonuses is on second homes - Hamptons, Jersey Shore. Even these markets look stable now after severe declines.

- Also, if US ecomony continues its positive trend for 3-6 more months, bank stocks will be much higher which will create a lot of wealth in NYC. Of course, this is an argument for investing in bank stocks as well.

- Wealthy Chinese and Russians (much of the wealth may have questionable sources) are looking for a safe haven to park their asset with Sandy Weil's apartment sale being one of the latest examples. They do not care about valuations.

- Wealthy Chinese and Russians (much of the wealth may have questionable sources) are looking for a safe haven to park their asset with Sandy Weil's apartment sale being one of the latest examples. They do not care about valuations.--

and they don't care about purchasing 2 and 3 bedroom apartments either--

--people on Wall street had high hopes of bonuses. Every one who got big payouts in 2009 knew that it was unusual year for the firms who survived. If the bonuses were to remain high, real estate will be 30% higher.

Then why was RE down big in 09'?
I(n addition, the biggest impact of the lower bonuses is on second homes - Hamptons, Jersey Shore. Even these markets look stable now after severe declines)-- sounds like you are contradicting yourself.

Also, if US ecomony continues its positive trend for 3-6 more months, bank stocks will be much higher which will create a lot of wealth in NYC. Of course, this is an argument for investing in bank stocks as well--

Doubt it-- still are plenty of toxic assets on books.. additionally-- NIM continue to get squeezed-- earnings will suc for a while..

YOU SHOULD HAVE WAITED ON YOUR PURCHASE

Actually when it comes to wealthy Chinese they typically purchase one bedrooms and studios. These are investments not homes. The two and three bedrooms are only purchased if/and when they make the move to domicile in the U.S.

this could very well be the year that wall street sees those side effects of post credit crisis, more regulated world. The bonus is not anywhere near what it used to be, but this year will be the worst so far; imagine your comp cut 50-60%! Prior year comp that was deferred is now vesting with bank/IB stocks down between 20%-60% from say 2 years ago. Retention bonuses are hard to come by. What many expected would come in 2008-2009, seems to be happening now. If 2010 was about 2/3 cash and 1/3 deferred with potential for longevity bonus, 2011 looks to be about 1/3 cash and 2/3 deferred w/out the longevity bonus. Thats at least what Im hearing from my old friends still on the street.

Thing is, there may be a disconnect between wall st bonuses for this year and the Manhattan market, because Im yet to see any actual data to prove that the 2m or higher markets are collapsing - here is a chart showing Pending Sales for all Manhattan vs Pending Sales $2-5M market since Jan 2009:

http://urbandigs.com/chart.php?k=2bdb966a1fdb238b3a732a28b9c5c8b0

Here is same chart except Im showing Pending Sales $5M vs whole market:

http://urbandigs.com/chart.php?k=d95e0ce8f299066a175ea1938e1c92bb

Just so we see where we came from since the height of the crisis...I dont see the high end market repeating what it did between March - Aug last year (see 2nd chart)..that wave ended 5 ended months ago and we havent seen tick up there since..but if its going to happen, February/March is usually when it starts, so we shall see if the volume is there this yr

don't you worry, UB, they are collapsing for the ones the need to sell.. the others will be a slooowww bleep down

Bob's stats are wrong re wall st. JPM comp expense was down 7% per capita. The difference between $1,000,000 and $930,000 as it relates to buying real estate is not significant. Let's not forget all those double income folks - this isn't even a blip.

Welcome Porn_Harvestor! WElCome.

Yes, we ARE ALL DOUBLE INCOME earners earning $800K/yr and 10% down is like 10 ipods less this year...... but how do you explain Ali and the other borkers who OWN multiple units in NYC?

I mean if the 2MM units in manhattan are owned by dual income professionals... then how about the borker and the other borker couple living in my building? How can they own multiple units? HOWZ that possible....

Welcome... INCOME does not matter for Manhattanites... WE ARE ALL RICH!

thats jpm...they were the best off this year BY FAR. and the "compensation expense" numbers are very different from bonus pool numbers

there are tons of down 75%s out there; along with zeroes

and I'm suggesting we haven't seen it yet bc people on wall street still have a false sense of hope...i think after the realization at pay day (which is in the next few weeks)...it will become reality.

300mercer -- my opinion -- hamptons are more stable bc for 2mm you can get a 5 bedroom awesome house, pool.....2mm in the city still gets you 1500sq feet in an old building. rel val just isn't there. good point on bank stocks making a lot of people feel wealthier, i agree

w67th, get those in the know back on these boards. otherwise, we are stuck with the bobf's, jordyn, jason, users and the rest of the ninnies trying to make hay from thin air.

500psf for nyre prime is still your calling card but the rest can't figure out if their butt is pointing upwind or downwind. keep sailing.

Funny. "not a blip" - probably another RE Broker. Next she'll say-- just borrow from your 401k. not a blip.. ok sure keep telling yourself that.. you are young and thin and beautiful too.

Another bank with bad earnings--

http://www.bloomberg.com/news/2012-01-17/citigroup-quarterly-profit-unexpectedly-declines-as-trading-revenue-slumps.html

Lowest revenue for JP & Citi since 08'!

http://www.bloomberg.com/news/2012-01-17/citigroup-joins-jpmorgan-in-reporting-lowest-revenue-since-2008-s-crisis.html

"Get used to living with Mom and Dad"

"The era of empty nests may be over unless we change our work culture and our economy. An expert explains"

"It%u2019s a growing trend: More and more adults are living with their parents. According to the Census Bureau, the number of 25- to 34-year-old adults in the U.S. living at home rose from 14 percent in 2005 to 19 percent in 2011. The trend is present in other developed countries across the globe too ( )"

http://www.salon.com/2012/01/16/get_used_to_living_with_mom_and_dad/

I heard if you change the name of your street, the value of your property will go up. Fo example, wouldn't you pay more for an apartment if your address was say 4 River Place instead of 400 East 52nd? I sense a lot of name changes..

"River Place' cracks me up. Living on Riverside Drive, I have no illusions about the allure of a street name with 'river' in the title. I enjoy having a view of the Hudson River, but most rivers are not that interesting. Plus, river fronts, throughout history, have been used for industrial purposes. It is only in recent times with the Con Edison plants decommissioned, and the slaughterhouse long gone, that the East River is fully cleared for housing. West Harlem has a waste water treatment facility on the Hudson. Give me the numerical Fifth Avenue any day.

PMG - you know I was referring to this article right? I can't believe they think the value of their apartments will go up if they change the name.. dopes... River Place is what they voted on-- hahahahaha

http://www.nytimes.com/2012/01/17/nyregion/on-a-numbered-street-apartment-owners-yearn-for-more-cachet.html?_r=1

There is a lot of inventory building up, let's assume 10% of the sellers are or will become desperate in the next 6 months. If just a few puke, comps go down, so lenders appraise lower and we leg down. The market is being held up by ultra low interest rates, if there are no buyers then the sellers will need to be realistic which will cause a small rush to the exit. Sellers, your first bid will probably be your best so take it seriously. Things will need to get a bit worse before they get better. I am not painting a gloom and doom scenario, but if you need to sell and you are waiting for a buyer to show up, get out now and take your lumps, its going to be a slow ride down. If you can hang on, it looks like a great time to rent your property or just do what the rest of the world is doing and hope things get better. We all know hope is not a strategy...

> are you really saying that 1BR and 2BR apartments are selling for the same price now, as they did in 2006?

Actually, might be less. Look at the numbers in real terms, too. Ouch. Talking 2004 prices or less...
http://streeteasy.com/nyc/talk/discussion/29509-2004-2005-prices

Very good point, I went back and looked at original prices then the lowered prices and actual closings and it seems that the "average" listing closes about 12% below ask and the ones that sit on the market are closing anywhere from 20% - 25% below ask. The surprise was that the majority of closed apartments were trading at 2005 levels. There is still a large amount of inventory priced at late 2007 levels, but these apartments are just sitting. As sellers are starting to become realistic the prices are slowly being dropped. The seller that needs or wants to sell within the next 6 months should price the apartments to sell at realistic prices. The inventory is growing and the demand will not be as strong as at has been in recent years. There are still a decent amount of people on the side line waiting to buy at a reasonable level, but when this drys up where will the buyers come from? The comps need to go down, lenders are appraising extremely conservatively, so any property that will be financed will require a price drop. Good time to rent your property... If you NEED to sell, do it now...It's like leaving the game with 2 minutes left or when the game is over. You can stick around and hope your team makes a comeback (how often does that really happen??) or realize that this one is over and beat traffic!!

sonnynyc,...

The inventory is growing and the demand will not be as strong as at has been in recent years. There are still a decent amount of people on the side line waiting to buy at a reasonable level, but when this drys up where will the buyers come from? The comps need to go down, lenders are appraising extremely conservatively, so any property that will be financed will require a price drop

also a very good point

but the things is, very few sellers are under pressure to sell

even the deadbeating flippers don't care because they are protected by NY law; and it's almost impossible for banks to foreclose on their bubble-priced properties.

as a result, home prices could stay there forever until next bubble comes

Wall street jobs are responsible for 30% of real estate purchase in the city. If Wall street jobs shrink 25% and cap bonuses for whoever still lucky to have a job, law firm jobs will also shrink and these two polls of buyer will significantly reduce the # of potential buyers in the city. I suggest buyers on the sideline to be a bit more patient, you will be rewarded! It took 10 years for the last bubble to deflate between 1987 and 1998.

I don't disagree that most sellers who need (or want) to sell in the next 6-9 months (and maybe even a year) need to lower their prices or their apartments will sit.

However, caonima raises a very good point that there are a good number of owners who can and will wait it out. I think that is why we see the low inventory that we do right now; owners are not caving. And for this reason I don't agree that buyers have the luxury of being patient....this may not change for quite some time.

"And for this reason I don't agree that buyers have the luxury of being patient....this may not change for quite some time."

As long as it remains cheaper to rent than to buy, buyers can wait forever by continuing to rent.

"caonima raises a very good point that there are a good number of owners who can and will wait it out."

Huh? how do you figure? If they can and will wait it out they are not sellers, they are flippers that will get bled dry by the cost of carry. So Good luck.

Sellers can not wait to be patient. The longer they wait, the more they will loose! There will not be a another RE bubble.

"I don't agree that buyers have the luxury of being patient....this may not change for quite some time."

The most self serving quote from a non borker on SE... that's saying a lot.

"BUY now cause prices might stay here FOREVER!" OMFG.

"MARRY ME NOW, cause my PERKY boobs might stay like this FORVER!"

Most sellers are trying to be hopeful that their products have been moving. Problem is that the inventory is growing, financing more restrictive, and the price gap b/w sellers/buyers is still too great. It's going to be this case for all of 2012. Most sellers are willing to wait this one out (even though it's fruitful). As mentioned above, if we're lucky, we're about half way through this real estate bubble. Another 4-6 years left!

There should be a possible formula giving you an idea of what the drop in #sales should come to. The financial sector represent 170,000 people which count for 30% of NY real estate purchase. I'm assuming they target the $1M to $2M market. 35,000 (20%) are gonna be laid off and for the rest, bonus is capped at $125K.
A possibility is that instead of going for a $1M to $1.25M Manhattan apt, they decide to settle in Brooklyn instead for a $6500/$850K apt... May be we'll see Manhattan prices dropping more than Brooklyn prices...
No doubt, there will still be some action but i think it's gonna be mostly happening in the sub $1M.

sledgehammer , could you brief us more detail on how the last bubble deflate between 1987 and 1998?

"and for the rest, bonus is capped at $125K. "

I will give you the chance to double check the accuracy of that statement.

No I can't Caonima, i was 13y old in 87 and had no interest in US economics at this time, but this chart speaks for itself:
http://www.ritholtz.com/blog/wp-content/uploads/2008/12/case-shiller-chart-updated.png

"As long as it remains cheaper to rent than to buy, buyers can wait forever by continuing to rent."

And as long as buyers continue to rent, owners can rationalize over some make-believe rent they think renters pay. A nicely-balanced ecosystem, how could anything disturb it?

"and for the rest, bonus is capped at $125K. "

I will give you the chance to double check the accuracy of that statement.

The statment was true because his/her universe had only one Wall street company. Also, the 35000 being laid off are all from Manhattan, not nation wide number. It cannot be wrong. It is from the discussion board here at StreetEasy.

I guess any bonus that isn't cash is worthless. I bet Mitt Romney, and many of the country's CEO's would disagree though.

Brooks2, I think you need to parse. There are sellers who don't need to sell. Maybe they have a lot of equity in their apartments, maybe they can sublet, and maybe (rare) they can afford to have the apartment sit vacant because they paid all cash and the carry isnt significant to them. These people do not have to lower prices at all. Which is the point I made in my original response, i.e., you cannot assume that EVERY seller out there is going to "lose."

also, obama just announced last nite that he would provide more help to floppers who are under water, and today bernanke just said he'll print more money in next couple years

so, looks like it's the potential buyers who sincerely saving 20% down are screwed, not the manhattan real estate

"These people do not have to lower prices at all. "

Then they will never sell their properties. Thus are not sellers.

"sledgehammer , could you brief us more detail on how the last bubble deflate between 1987 and 1998?"

I can. There was not a RE bubble in 87'. dah. in Hawaii maybe, but not in Manhattan.

sledge, the 87 crash was nuttin compared to our current shitshow

Glad this won't affect Manhattan real estate.

as soon as a few apts. sell lower then comps go down, as soon as comps/appraisals go down banks lend less so buyers need to come up with more cash which limits the buying pool, most banks deferring cash bonuses into stock, so less cash floating around
oh yeah has anyone tried to get a mortgage lately , they require blood samples and the appraisals always come in low (on purpose..)
the real estate market just needs to correct, there is always a buyer at some level, but the sellers will have to except lower prices..
anyone have stats on inventory #s? ..

here you go.

http://urbandigs.com/chart.php?s1=Active&s2=&mindt=01%2F25%2F2010&maxdt=01%2F25%2F2012&t=Market+Trends&interval_mindt=2008%2F01%2F01

I know the focus here is usually on Manhattan, but in certain non-prime neighborhoods in Bklyn, prices are in a bit of a swoon.

Consider 400 E. 17th St, unit 409 in Ditmas Park. It's a 900-sf 2-bed co-op. If you're a Streeteasy member you can check out the recent closing.

The apt went on the market in April at $370k. It closed last week at $300k.

they can ask whatever they want... and Ditmas... I like it, but it is a little far out. $333 psf isn't exactly superlow for mid-brooklyn.