Will prices keep going up exponentially?

Hi. No, prices will not continue exponentially, but IMO will continue upward at a moderate pace exceeding inflation. Manhattan prme has had in last 30 years has pulled back only a couple of times. Always hard to predict the future. For Manhattan prime, we definitely have a suppy/demand imbalance. If I had to predict, conditions in 2 years will be prices up 5% per annum. Basically the underlying issue is that the stability of current owners is very high; and there is not a lot of supply creation. NYC is still a draw for overseas, wealthy and new college grads.

What's IMO?

Messaging shorthand: In My Opinion.

Fed policy will have a big impact as will global macro economic trends. If anyone "knew" for sure where we'll be in just ONE year, I'd be impressed. Just keep your fingers on the patient's pulse, it's the best any of us can do.

just my 2

Exponential does not mean what you think it means. At all.

There was an article in NYT real estate this weekend about the boldness of broker pricing over the last year and predicting that it may have now gone too far. It cited a number of high-end properties that remain on the market and pointed out that some brokers refer to contract prices rather than recorded sales for their data.

I have seen a number of incidences very recently where price tags seem obnoxious and presumptuous for mid-level properties on the UWS (Lincoln Square specifically) giving the impression certain brokers are emboldened by the recent sales and lack of inventory. It will be interesting to see if the bidding wars slow down.

Jason everyone knows it is a math term with a, literal meaning , duh, but it is often used loosely to mean "very rapid growth" . See dictionary.com.

I think that many of the factors driving up prices will continue for a while. Some that come to mind:

- Central banks keeping interest rates artificially low. That makes it difficult for wealthy to find yield in other investments, making real estate more attractive. That combined with historically low mortgage rates tends to drive up prices.
- Tax policy that gives favorable capital gains treatment for housing and to a lesser extent the mortgage interest deduction.
- Low crime rates in NYC especially compared to the 1960s through 1990s.
- Very little new housing supply being added except for ultra high end.
- Large percentage of NYC housing market essentially off the market due to rent stabilization.
- Increasing population in NYC
- NYC real estate as a safe haven for foreigners to park their money with little restriction
- Rise of a new mega-wealthy global class? I.e. the type of person who owns apartments in multiple cities and stays there only a few weeks out of the year.

I've been watching 2br 2ba condos and coops. Seems like brokers are pricing them $100K increase per month in areas such as Gramercy Park, Flatiron, Village and UES.

Cbreeze, Can you post s few example of actual sales which show the price increases you mention? Thanks.

jason10006
about 6 hours ago
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>Exponential does not mean what you think it means. At all.

What does obtuse mean?

Put on your big girl panties...
Change them every day, do your laundry once-a-week.
7-10 pairs of big-girl panties should see you though the next two years.
Break loose and buy an extra week's worth of big-girl panties: 14-20 panties, a nice selection of colors,
will see you through the next two years.
24-26 pairs will give you extras to spare.

places like Phoenix are really going up, not NYC. CS shows a paltry 2.6% for NYC, the lowest price increase in the country.

It doesn't seem that way if you go to open houses right now in NYC.

why would you go to open houses? buying when rates are this low is for morons imho, no offense.

NYC numbers include the outer boroughs which are not doing too good.

Parts of Brookyln and Queens are doing extremely well.

True, but then some parts are not, and then we have The Bronx and Staten Island.

@notadmin I'm admitted not very smart on these things, but why would it be bad to buy when rates are low?

Yes, prices will continue to "go up exponentially." Why? Because Manhattan is different of course! Time to dust off "the list" lest we forget:

- they're not making any more land
- everyone wants to live here (or as hol4 would say, Grindr requires density)
- Brazilians, Russians, Chinese and (insert foreigner of choice) 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 have re-entered 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
- NYC is a baby boomer retirement mecca
- supply of new construction units is highly constrained
- the Fed keeps printing money
- Barbara Corcoran said so
- and the number one reason why Manhattan is different - OUR banks are too big to fail!

"go up exponentially" means at the vary least go up by 10-fold every year. This will not happen. Double-digit percentage YOY gains are not the same as "go up exponentially."

---@notadmin I'm admitted not very smart on these things, but why would it be bad to buy when rates are low?---

Because people can afford to pay a higher sales price when their mortgage rates are lower. Once rates start go up, the idea is prices would decline as a result.

Of course, interest rates were also low two years ago and yet property values continue to rise so any kneejerk price decline triggered by a rate hike is likely to be brief and insignificant.

re: "go up exponentially" means at the vary least go up by 10-fold every year.

no it doesnt. growth rate can be anything. google it

@squid

That's funny, you're not wrong but it's also partly a chicken-vs-egg situation.

Rates are low because the economy is weak and the majority of people are not in a strong position to purchase real estate, thereby depressing real estate. However your effect is also in play, rates are low which will push prices up. As prices increase the rest of the economy (supposedly) picks up, which increases rates.

Either way though, it is unlikely that the "peak" of any housing market is durng a low rate environment though. At best, prices are picking up, and when rates peak, the housing market will be peaking also.

IDK that's my stupid logic anyway.

Jason -- do you really think you're sounding smart while discussing the math meaning of exponential , while ignoring other common usage which is what defines words.

West34 is correct ... nobody specified integer exponents.

scarednycgal meant that prices are going up by a fractional power.

So Jason is not even discussing the full math meaning of exponential. But he's doing his best to cope in a non-spectral world. Someday there'll be a cure.

>"go up exponentially" means at the vary least go up by 10-fold every year."

So 2 to the 5th power doesnt qualify as exponential?
We'll leave 1 to the 10th power alone. :)

"Exponentially" may be a poor choice of multiplier but more forgivable than your definition of it.
See what happens when you go off the teleprompter?

Maybe more apropos would be "Will prices continue to perpetually increase.."

32 is usually more than 10.

I was treating a year as a "power," I should have been specific.

Yes truthskr10, you are correct on all counts.

And no reallynow, just because lots of people use the words "irregardless", "ain't" or misuse the term exponential does not mean its correct.

you mean it's, don't you jason?

Irregardless, how retarded!

It's just the Internet, not the WSJ or a textbook, so I won't loose sleep over people using the wrong terminology.

Or lose.

Irregardless is a fantastic word. Exponentially is OK, but hardly worth extended conversation. So I'll keep it short.

Alan, for some things there will never be a cure.

Truth, split infinitive. Shame on you. I hate grammar/vocab/posting dictators.

aboutready poster, I assume you mean truthskr10's split infinitive, not trUth's.
I have a much bigger issue with comma-splice, which both of them presented in this thread. I love grammar/vocab/dictators.

Yes, I meant the truly truthy poster, not the poseur.

Do you love them more or less after a couple of sidecars? After more than a couple? The berg will likely note that my last fragment was not a complete sentence. BFD, as I like to write, but not say.

Hey you there! Welcome back from vaca!

I wasn't on hols; I was in retox. It was a working trip.

Or a tripping work. I amuse myself.

Not you alan. This isn't always about you.

greensdale:
trollalanhart and aboutready both think that it's always about them.
Now aboutready "hates" truthskr.
"comma splice", "the poseur".

Two alkie drunks "amusing" themselves here, as usual. They can't decide if they "love us more or less after a couple of sidecars?"
How many sidecars? "After more than a couple?"

AR
My english grammar suffers from learning french first as a child. After entering first grade and telling my parents to stop speaking french to me, it was already too late and did it's damage.
I now speak abysmal french and my english has poor adverb rules.
Used to make fun of my mom for calling Burger King, King Burger.

But math is math, even for Yoda.

Actually my second comment wasn't directed at you. It was meant to be ironic. Fail.

"go up exponentially" means at the vary least go up by 10-fold every year. This will not happen. Double-digit percentage YOY gains are not the same as "go up exponentially."

Did jason attend high school?

AR
I was running with it.
This happens frequently to us,...wait...this happens to us frequently.

It's true, we'd make awful dance partners.

Who needs 10 working toes?

A good friend grew up in a Japanese-speaking household. Until someone finally corrected her in college she spent years pronouncing Xerox "exerox". That last sentence was poorly constructed, and this native English speaker doesn't care.

So in the smallest whole number example (save for the number one) we are talking 2^2. So if a 200 thousand dollar condo has its price squared...its now a 400 million dollars.

Unless of course the INCREASES are exponential....
200K to 210K year 1...210K to 300K year 2

To the original intent of the question, who knows.
Can our government keep printing money? Why would anyone down the road even consider savings when you can leverage to death and when it blows up, you all get bailed out.
And our bankers,"Too big to jail." In Iceland, these people would be in jail.
Can interest rates go to .00001 percent?

Any bets on this year's stock market correction? THe gambler in me is aching to buy a nice chunk of a 2X ETF.

zomg! 200K squared is 40 billion, not 400 million.

But nobody said the exponent is an integer.

http://en.wikipedia.org/wiki/Exponential_growth

Any compounded growth rate is exponential (i.e., prices are rising at 5% of the current value per year rather than $100K per year). Real estate prices almost always move this way, even if they are very low. So scarednycgal's use of the term is correct mathematically, but in a meaningless sort of way--real estate prices are almost always growing exponentially unless they are declining.

"From Wikipedia: Economic growth is expressed in percentage terms, implying exponential growth. For example, U.S. GDP per capita has grown at an exponential rate of approximately two percent per year for two centuries."

Jason.....?

He's away at math camp for two weeks. They made room for him at the last minute when he presented his argument.

normally NO, but with the crooks keep printing US dollars like crazy, YES

truthskr:
The bored, frustrated, unemployable alkie housewife has graded your comments and given you a: "Fail".
She's posing as an important person whose opinions and grades actually matter in the real world.

The odd thing is that most Californians except for Jason10006 are familiar with exponential scales through their intimate involvement with the Richter scale.

Intimate ?

trUth = aboutready fangirl

She's so stupid. I was giving myself a fail. Clearly she's too drunk to comprehend.

Thanks AR, but I think we should all just focus our collective attention on trying to remediate Jason.

I thought he was at math camp being remediated as we write. While his math well-being is in my thoughts, always (of course), I thought it safe to address the egregious stupidity of my very best fan and stalker.

Jason is too old to be allowed to go to camp.

Condo index now at 2062 and rising rapidly. (See, I avoided using the term exponentially).

no you didn't

Hopefully, prices will stop rising so fast or rents will jump exponentially. I have been looking in Bushwick, Bed-Stuy and Crown Heights and the math doesn't make sense from an investment POV..

aboutready gave herself "a fail".
(Not for being a drunken, frustrated, unemployable housewife.)
She failed at writing an "ironic" comment on this streeteasy thread.
"She's so stupid" and is always "clearly too drunk to comprehend."

Fangirling some more.

^^within minutes, trollalanhart is here to troll me ("some more") on a Friday night 10:38pm EST.^^
He's a drunken slob with no social life.

Relevant article: http://www.nytimes.com/2013/06/02/realestate/new-york-city-is-a-sellers-market-so-every-minute-counts.html?_r=0&hp=&adxnnl=1&adxnnlx=1370100305-plWIvEW8iItlAt7cnLu7Zw

http://streeteasy.com/nyc/talk/discussion/34027-point-of-inflection-in-nyc-sales-market?page=3

Truthtroll, find something original to spew (I have this image of vast amounts of spittle as you furiously pound your keyboard.). You are so self-derivative.

It's beginning to feel a lot like 2007.

aboutready, whose days are the same alkie waste of hours and minutes is spewing again.
She has "this image" of me...
"furiously pound your keyboard" is describing her only activity. She's feeling "a lot like 2007":
full of frustration and anger at her unoriginal, wasted life. Unable to learn any new skills, no original or creative accomplishments, unemployable, just pounding her keyboard in anger.

"self-derivative": her latest attempt to insult me.

Idiot. The 2007 reference relates to the real estate market.

It's not an attempt to insult you,, it's the "truth." You vile bitch.

Real estate, which is supposed to be the focus of this board. Not stupid song lyrics. Not retellings of your Hamptons gropefests (although I doubt those occur anywhere but in the fantasy-world you've concocted).

Quit drinking so much and taking so many benzos, and take your anti-psychotics and mood stabilizers. Seriously.

What are "benzos?"

They're benzos.

ooh, I missed another drunken outburst by aboutready, about 21 hours ago.

She's angry again, as usual. My real life causes her so much anger and frustration.
Who would invite aboutready to stay with them in the Hamptons? (who would want her to participate in a "gropefest"?)

She's an untreated alkie, frustrated housewife ranting on streeteasy for years.
Her "fantasy world" is any life that is lived away from the computer and her streeteasy drunken comments.
She orders me to "quit drinking so much...", while she can't even learn how to drive because she's too drunk to pass a road test.

If you type "benzos" on an iPhone it does the rest for you - benzodiazepines

Thanks iPhone!

greensdale: It's Monday 4:45pm EST, so she's probably ranting at her washing machine and dryer wishing they would brake down so she won't have to do "the f'ing wash", which she "hates".

And there you have it folks! Another thread ruined by "Truth"! Notice all the good, helpful comments in the beginning. Then "Truth" shows up, and.... bang! Thread is killed by our resident troll discussion-killer, with comments that are, well, you can see. Sorry scarednycgal, when "Truth" shows up, all reason goes out the window. Hope you got something out of the first half of this thread :-)

[Now: onwards! More "alkie" comments please!!]

and here's sillySonya. Telling you what to "notice". She doesn't have basic reading comprehension skills.
She pretends she's not in the grey zone, trolling while babbling on and on with her critique of my comments.
SillySonya says: "Onwards"!
"Sorry scarednycgal"... sillySonya is here to report a kill.

Play-by-play! Yes! More!

["here to report a kill." At least you admit it, that's progress!]

How can prices "keep going up exponentially" when...

1) they aren't going up exponentially now
and...
2) they aren't going up AT ALL now...