FYI- Very interesting............ Playing It Safe by Renting, for Now Sign In to E-Mail or Save This Print Reprints Share Digg Facebook Mixx Yahoo! Buzz Permalink By ELSA BRENNER Published: June 8, 2008 A FEW months ago, with a Harvard M.B.A. fresh in hand and a new job waiting for him, Jared Simon was eager to buy a condominium in a luxury complex offering the kind of amenities, like concierge... [more]
FYI- Very interesting............
Playing It Safe by Renting, for Now
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By ELSA BRENNER
Published: June 8, 2008
A FEW months ago, with a Harvard M.B.A. fresh in hand and a new job waiting for him, Jared Simon was eager to buy a condominium in a luxury complex offering the kind of amenities, like concierge services and workout rooms, that appeal to successful young professionals.
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Alan Zale for The New York Times
RENT TO OWN Ten condos at Trump Plaza are offered to tenants who rent for a year and then can apply the payments toward purchase.
But given the current state of the housing market, he has decided instead to rent. “In this economy, I wasn’t comfortable taking on a lot of debt,” said Mr. Simon, 28, a brand manager for Kraft Foods.
Next month, he will move into a one-bedroom apartment at Hudson Park, a luxury rental complex on the Hudson River in Yonkers, 20 minutes by train from his job in Tarrytown.
With the for-sale housing market slow, credit increasingly difficult to obtain and no indication of a rebound in sight, more and more potential buyers are, like Mr. Simon, opting for rentals instead of condos, several real estate developers reported last week.
“It makes sense,” said Philip M. Wharton, vice president for development of AvalonBay Communities, which has apartment complexes in New Rochelle, White Plains, Bronxville, Elmsford and New Rochelle. “People are nervous about buying. They don’t know if we’ve hit bottom yet, and they’re worried about getting financing.”
But contrary to what some owners of rental housing would expect in a poor for-sale housing market, occupancy rates in multifamily dwellings — even rentals — are not soaring.
As Steven Marks, a managing director for Fitch Ratings, a bond rating agency, explained it, slow job growth nationally has discouraged the formation of new households and resulted in increased vacancy numbers. Nationally, the vacancy rate for apartments at the end of March was 6.1 percent, up from 5.7 percent a year ago.
“There are a lot of tire kickers out there, in sales as well as rentals,” said Arthur Collins, a principal in Collins Enterprises, the Stamford, Conn., development and management company that is building Hudson Park, the Yonkers complex where Mr. Simon will be renting.
“A lot of people don’t know what to do in the current market,” Mr. Collins added. “Some are worried about their jobs, and they want to see how things go. I think a lot of them are just staying put and not making any moves to rent or to buy.”
Still, on the theory that in a shaky market, renting comes easier than buying, Cappelli Enterprises is offering a “rent now, buy later” deal at its 39-story Trump Plaza in New Rochelle, a luxury condo complex built in partnership with Donald J. Trump.
In two years, only 70 percent of the 181 units in the building have sold. In the last six months, the pace of buying has been especially slow, said Jessica Rohm, managing director of Cappelli Sales and Marketing. “There’s lots of traffic coming through the building, with everyone saying they want to buy,” Ms. Rohm said, “but then they end up deciding to wait.”
So Cappelli has offered 10 units to potential buyers who can rent for a year and then, if they decide to buy, apply the year’s rent toward the purchase price. For a one-bedroom unit with a bathroom and powder room, the rent is $2,550 a month. The total of $30,600 could, after the year, help to buy one of the units, which are priced from the mid-$500,000s for a one-bedroom to $1.7 million for a three-bedroom penthouse. (If the tenants change their minds at the end of the allotted time, the arrangement ends.)
It was a deal that Robert Munro, a hedge fund manager who is starting his own business, couldn’t resist. “Any extra capital I have at this point needs to go into the business, not into real estate,” said Mr. Munro, 41, who has rented a two-bedroom unit at Trump Plaza. “That’s a better investment, considering the way the market is now. If I’m going to tie up capital, I prefer to do it with something I have some control over.”
In Yonkers, the first phase of Hudson Park, with 266 units, is 95 percent occupied, Mr. Collins said. The second part, opening now, has 294 units; leases are being signed, but not in huge numbers, he acknowledged.
In New Rochelle, at Avalon on the Sound East, 588 new rentals — ranging in price from $1,288 a month for a studio, to $3,407 for a three-bedroom — came on the market a year ago. The building is about 80 percent occupied, Mr. Wharton said, describing the leasing activity as adequate. In White Plains, the company has just opened a rental complex with 493 units.
That city has a lot of residential rental space — including a 260-unit complex built in 2004 and originally named Clayton Park. Leasing was slow back then because the building opened during the same two-year period that about 2,000 other rental units came on the market in White Plains. In 2006, as the for-sale housing market continued to boom, Clayton Park was acquired by BlackRock Realty and Haveland Estates, with the idea of converting it to condos, said Philip Restivo, president of Haveland.
But then the winds shifted again, and “we decided the rental market was where we should be,” Mr. Restivo said. Today the complex has a new name, the Gramercy, and its rental office has reopened for business. Rents will range from about $2,000 to $3,000.
But elsewhere in White Plains, at least one developer reports that his company is taking a wait-and-see approach before breaking ground on 500 new rental units near the downtown Metro-North train station.
“First, we’re going to be students of this market,” said Peter T. Gilpatric, a senior vice president for LCOR, the developer, which is based in Berwyn, Pa.
He said the company would watch how the new Avalon complex in the city leased up, and how the Gramercy fared under its new owners.
Mr. Gilpatric added that with the stiff competition for renters, complexes near public transportation were likely to fare best, especially in the current economy.
As Mr. Simon, the Yonkers renter, put it, “the price of gas, not just the housing market itself, was part of the equation I used in deciding where to live for now.”
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
This will never affect Manhattan. In Manhattan, prices double every 3 years forever.
Ask JuiceMan.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
Ask me what steve? Is your qeustion about renting being half as expensive as owning? HA HA HA HA
dco, thank you for the article on Yonkers, White Plains, and New Rochelle, do you have any information on Detroit, Louisville, or Tifton, GA?
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
JM- What's a matter JM. Feeling it all closing in around you? This is what happens when inventory and over development out paces salaries and demand. If you think that Detroit, Louisville, or Tifton, GA are no better examlpes for Manhattan then Yonkers, White Plains, and New Rochelle you have truly lost your mind.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
YONKERS
Destination Station: GRAND CENTRAL TERMINAL
Travel Date: Monday, 06/09/2008
Note: To help you plan your trip, we have given you your time selection as well as the trains 2½ hours before and 2½ hours after.
If bold letter appears in Note column, click on it for details. YONKERS Notes GRAND CENTRAL TERMINAL Notes Travel Time
In Minutes Transfer(s) Peak Fares Apply?
5:45AM 6:10AM 25 THROUGH TRAIN Y
5:58AM 6:27AM 29 THROUGH TRAIN Y
6:10AM 6:35AM 25 THROUGH TRAIN Y
6:28AM 6:59AM 31 THROUGH TRAIN Y
6:56AM 7:30AM 34 THROUGH TRAIN Y
7:06AM 7:35AM 29 THROUGH TRAIN Y
7:17AM 7:53AM 36 THROUGH TRAIN Y
7:39AM 8:15AM 36 THROUGH TRAIN Y
8:01AM 8:37AM 36 THROUGH TRAIN Y
8:17AM 8:50AM 33 THROUGH TRAIN Y
8:41AM 9:16AM 35 THROUGH TRAIN Y
8:51AM 9:18AM 27 THROUGH TRAIN Y
Some trains are sell then 30 mins to GS. It takes longer from parts of Brookly and Queens to get to GS.
Ignored comment.
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Whether property prices in Manhattan double every 3 years forever.
That's what you seem to believe.
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Response by julia
about 18 years ago
Posts: 2841
Member since: Feb 2007
It appears there are many people in a "freeze zone"...and they end up staying where they are, not renting or buying just waiting. Hopefully this will push sellers and landlords to start bringing prices down.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
"Whether property prices in Manhattan double every 3 years forever."
When have I ever said that steve? You and dco (aka steve mini me) continue to make that statement but have yet to pull one of my posts that says anything close to this. I wonder why that is? Is it because I call the two of you on your bullshit? Post some accurate, real world examples, and I will be happy to support them. 2x is bull.
dco, the world is not closing in on me. Not even close. I understand that you would like to think this as you sit in your rental in Yonkers hoping for a market crash, but it isn't the case. Why haven't you been able to answer my questions from the other thread?
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Response by aboutready
about 18 years ago
Posts: 16354
Member since: Oct 2007
Julia, you're absolutely right. People appear frozen and uncertain. However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit. Add to that rising property tax bills over the next 8 or so years, new development saturation and rental units exiting the rent stabalization market and we'll just have to see.
I'd LOVE to buy, but...
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
JM- I told you that I won't waste my time. You know what you are and so do I.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
That's funny dco, and I agree it would be a waste of time because, what your looking for doesn't exist. Just like your "analysis".
"You know what you are and so do I."
Of course I know what I am, but you have no idea.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
JM- In case you haven't heard my analysis is already being proven on a daily basis, it's hard for you to see with you head buried in the sand.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
aboutready- well said. There is only one choice in this market. WAIT!!!!!. Just use logic. Is it more likely that the market will decrease further or have we seen the bottom and things are poised to go up? I think you know my answer. Inventory will increase. Many wallstreeters got packages when let go and most will run out within the 6 months. Unless they find a new job they will have no choice but to put their property on the market further adding to the inventory. Oh and don't forget many of these people are not even figured into the unemployment numbers because you can't file if you are still getting paid by your old firm. We are running out of good news people that's a fact.
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
JuiceMan: I don't think you can dismiss the Southern Westchester market altogether. I agree that New Rochelle as a whole tells you very little about Manhattan; but Trump Plaza probably tracks Manhattan condos much more closely than, say, 5-bedroom Tudors in Bonnie Crest do. Trump's target customers in New Rochelle aren't that different from those in Manhattan. The biggest differences might be that they have less money and care more about keeping a car.
I'm not suggesting a close correlation, just that the market up there is worth watching.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
Gas is poised to increase about 20-30 cents by next week. If we hit $140 on oil $5/Gallon will be the norm. Even if it droops to $100-110 this economy will suffer greatly with gas and heating oil at $3.75 gallon. Earnings for the rest of the year are going to be a disaster. The only thing hold us up are the exports and that is swiftly coming to an end with the credit crisis hitting the rest of the globe.
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
dco: Where do you get "most will run out in six months"? The packages are all over the map, and a lot of Streeters have built up substantial nest eggs for a rainy day. Also, most folks have skills that are, to some extent, portable across industries. ALthough their paychecks will doubtless suffer, their careers won't all end the day they get laid off, and they won't move into homeless shelters when the severance runs out.
I agree with your premise that there will be a substantial impact, but the reality on the ground is much more complex that you describe. Do you work for a Street firm? If not, may I suggest that you dial down your arrogance a bit?
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
"Post some accurate, real world examples, and I will be happy to support them. 2x is bull."
JM, I've posted dozens of them, and every time I do you say either leave the thread or say, "Oh, that one again."
Not every single apartment is twice to buy as it is to rent. But overall, it's pretty close.
"However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit."
That's not possible. Ask JuiceMan.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
"Not every single apartment is twice to buy as it is to rent."
I agree.
"However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit."
I also agree. New devs are outrageous and I believe steve's 2x holds true in many cases.
See how easy that was?
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Response by aboutready
about 18 years ago
Posts: 16354
Member since: Oct 2007
JuiceMan,
Bear that I am, even in new developments I don't think it's two times. With costs related to lost investment opps (very low now, thanks Ben), closing costs on both ends, only the three bedrooms and ultra-ultra tend to be 2X and greater. The studios and one beds are being hit rather heavily but that's not my market so I must defer (it probably is two times for many reasons). The 2-3 bedroom with 1400-1700 sf is probably at 1.5 to 1.8 times rental costs, maybe slightly higher due to transfer taxes and eventual RE taxes.
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Response by aboutready
about 18 years ago
Posts: 16354
Member since: Oct 2007
Well, I just thought about my last post and realized how absurd it was. OK, everything but MY particular market does seem to be at least 2X rental for new construction. Mea culpa.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
West81- I think that you get my point. I never said all packages will run out in a month. I'm also aware of the high education level and experience that most of these people have. I fully understand that many will find new job, however most will find it very difficult or impossible to earn at the same level. We all know that most people who earned $400 and up don't live in studios and would imagine that they need their bonuses more than their salaries to pay the monthly nut. It is projected that somewhere in the ballpark of 60,000 will be let go. (I know the number is debatable and no one knows for sure). Lets assume just for argument sake that 5% will need to sell their homes. That 3,000 more units on the market within the next year. With inventory at say conservatively 8,000 that's a 40% increase just from the layoff effect. Now add New Dev. and the inventory number could realistically hit 15,000 by this time next year.
Also if it comes off as arrogance I apologize, that was not my intention. At times It feels like many people would lie to their mothers to sell a piece of property. "Everything is great just pay the 1M and move on nothing to see hear". It's getting embarrassing.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
Oh- West I'm sorry I don't work for a big firm, however I wear many hats in my profession and function in the identification of patterns.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
"and function in the identification of patterns."
like ink blots?
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
JM- something like that.
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
dco: Haircut the impact again to reflect the small percentage of Streeters that actually own homes in Manhattan. The majority commute, including most of the big earners. Many who do live in the city are young analysts, traders and support staff who rent.
That's why I asked whether you work at a Street firm. You don't seem very familiar with the culture, economics or demographics of the business - all of which will shape the size and timing of the impact that layoffs and shrunken/restructured bonus pools will have on Manhattan real estate.
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
dco - Another thing you may be underestimating about the Wall Street tribe is their skill at assessing and managing risk (which is, in large part, what they get paid to do). Granted, they do a pretty crappy job where other people's money is concerned, perhaps because the industry is so riddled with perverse incentives and moral hazards. But for the moat part - Bear Stearns notwithstanding - they're quite good at it when their own cash is at stake.
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Response by JuiceMan
about 18 years ago
Posts: 3578
Member since: Aug 2007
15,000!
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
For years all we heard is how the wallstreet bonuses have been fueling the increase in property in Manhattan. Now I'm to accept the theory that they don't live in the city? Which is it? And for arguments sake lets assume the the majority of them commute from the burbs. How will it effect those areas? These were big money jobs. Actually most support staff don't live in the city. So according to you if young analysts, traders and support staff rent, then who lives in the city. Cops, Fireman, Sanitation workers? Who if not the wallstreet crowd?
I disagree that most people know how to manage their own money. I'm quite certain that a large majority of the wallstreet crowd owned a large portion of their own company stock. Most IB have been crushed with the exception of Goldman. So not only have many people lost their jobs, but their net worth has been greatly diminished.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
Renting is a much better deal in this environment.
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Response by zekeny
about 18 years ago
Posts: 7
Member since: May 2008
where the Hell IS New Rochelle???
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
You'd have to ask Mary Tyler and Dick Van Dyke.
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Tyler Moore.
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Response by stevejhx
about 18 years ago
Posts: 12656
Member since: Feb 2008
Why do they both have 3 names, and Rosemarie just had the one?
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Response by West81st
about 18 years ago
Posts: 5564
Member since: Jan 2008
dco: I agree that there will be a weak market for new development and for resales. I just don't see a ton of people being forced to sell, at least not for quite some time and not all at once. We might be headed for a train wreck, but even if we are, I think it will happen in slow motion.
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Response by dco
about 18 years ago
Posts: 1319
Member since: Mar 2008
West81st. I agree with your opinion. I just want to add that I think the process is neither slow or fast. It's taking the time it needs to work through the circumstances it's handed. That's why I'm not to concerned with tomorrow. This problem will go way beyond tomorrow and the day after that.
This will never affect Manhattan. In Manhattan, prices double every 3 years forever.
Ask JuiceMan.
Ask me what steve? Is your qeustion about renting being half as expensive as owning? HA HA HA HA
dco, thank you for the article on Yonkers, White Plains, and New Rochelle, do you have any information on Detroit, Louisville, or Tifton, GA?
JM- What's a matter JM. Feeling it all closing in around you? This is what happens when inventory and over development out paces salaries and demand. If you think that Detroit, Louisville, or Tifton, GA are no better examlpes for Manhattan then Yonkers, White Plains, and New Rochelle you have truly lost your mind.
YONKERS
Destination Station: GRAND CENTRAL TERMINAL
Travel Date: Monday, 06/09/2008
Note: To help you plan your trip, we have given you your time selection as well as the trains 2½ hours before and 2½ hours after.
If bold letter appears in Note column, click on it for details. YONKERS Notes GRAND CENTRAL TERMINAL Notes Travel Time
In Minutes Transfer(s) Peak Fares Apply?
5:45AM 6:10AM 25 THROUGH TRAIN Y
5:58AM 6:27AM 29 THROUGH TRAIN Y
6:10AM 6:35AM 25 THROUGH TRAIN Y
6:28AM 6:59AM 31 THROUGH TRAIN Y
6:56AM 7:30AM 34 THROUGH TRAIN Y
7:06AM 7:35AM 29 THROUGH TRAIN Y
7:17AM 7:53AM 36 THROUGH TRAIN Y
7:39AM 8:15AM 36 THROUGH TRAIN Y
8:01AM 8:37AM 36 THROUGH TRAIN Y
8:17AM 8:50AM 33 THROUGH TRAIN Y
8:41AM 9:16AM 35 THROUGH TRAIN Y
8:51AM 9:18AM 27 THROUGH TRAIN Y
Some trains are sell then 30 mins to GS. It takes longer from parts of Brookly and Queens to get to GS.
Whether property prices in Manhattan double every 3 years forever.
That's what you seem to believe.
It appears there are many people in a "freeze zone"...and they end up staying where they are, not renting or buying just waiting. Hopefully this will push sellers and landlords to start bringing prices down.
"Whether property prices in Manhattan double every 3 years forever."
When have I ever said that steve? You and dco (aka steve mini me) continue to make that statement but have yet to pull one of my posts that says anything close to this. I wonder why that is? Is it because I call the two of you on your bullshit? Post some accurate, real world examples, and I will be happy to support them. 2x is bull.
dco, the world is not closing in on me. Not even close. I understand that you would like to think this as you sit in your rental in Yonkers hoping for a market crash, but it isn't the case. Why haven't you been able to answer my questions from the other thread?
Julia, you're absolutely right. People appear frozen and uncertain. However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit. Add to that rising property tax bills over the next 8 or so years, new development saturation and rental units exiting the rent stabalization market and we'll just have to see.
I'd LOVE to buy, but...
JM- I told you that I won't waste my time. You know what you are and so do I.
That's funny dco, and I agree it would be a waste of time because, what your looking for doesn't exist. Just like your "analysis".
"You know what you are and so do I."
Of course I know what I am, but you have no idea.
JM- In case you haven't heard my analysis is already being proven on a daily basis, it's hard for you to see with you head buried in the sand.
aboutready- well said. There is only one choice in this market. WAIT!!!!!. Just use logic. Is it more likely that the market will decrease further or have we seen the bottom and things are poised to go up? I think you know my answer. Inventory will increase. Many wallstreeters got packages when let go and most will run out within the 6 months. Unless they find a new job they will have no choice but to put their property on the market further adding to the inventory. Oh and don't forget many of these people are not even figured into the unemployment numbers because you can't file if you are still getting paid by your old firm. We are running out of good news people that's a fact.
JuiceMan: I don't think you can dismiss the Southern Westchester market altogether. I agree that New Rochelle as a whole tells you very little about Manhattan; but Trump Plaza probably tracks Manhattan condos much more closely than, say, 5-bedroom Tudors in Bonnie Crest do. Trump's target customers in New Rochelle aren't that different from those in Manhattan. The biggest differences might be that they have less money and care more about keeping a car.
I'm not suggesting a close correlation, just that the market up there is worth watching.
Gas is poised to increase about 20-30 cents by next week. If we hit $140 on oil $5/Gallon will be the norm. Even if it droops to $100-110 this economy will suffer greatly with gas and heating oil at $3.75 gallon. Earnings for the rest of the year are going to be a disaster. The only thing hold us up are the exports and that is swiftly coming to an end with the credit crisis hitting the rest of the globe.
dco: Where do you get "most will run out in six months"? The packages are all over the map, and a lot of Streeters have built up substantial nest eggs for a rainy day. Also, most folks have skills that are, to some extent, portable across industries. ALthough their paychecks will doubtless suffer, their careers won't all end the day they get laid off, and they won't move into homeless shelters when the severance runs out.
I agree with your premise that there will be a substantial impact, but the reality on the ground is much more complex that you describe. Do you work for a Street firm? If not, may I suggest that you dial down your arrogance a bit?
"Post some accurate, real world examples, and I will be happy to support them. 2x is bull."
JM, I've posted dozens of them, and every time I do you say either leave the thread or say, "Oh, that one again."
Not every single apartment is twice to buy as it is to rent. But overall, it's pretty close.
"However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit."
That's not possible. Ask JuiceMan.
"Not every single apartment is twice to buy as it is to rent."
I agree.
"However, in many new developments, properties are going on the rental market for much less per month than the monthly purchasing cost for the same or comparable unit."
I also agree. New devs are outrageous and I believe steve's 2x holds true in many cases.
See how easy that was?
JuiceMan,
Bear that I am, even in new developments I don't think it's two times. With costs related to lost investment opps (very low now, thanks Ben), closing costs on both ends, only the three bedrooms and ultra-ultra tend to be 2X and greater. The studios and one beds are being hit rather heavily but that's not my market so I must defer (it probably is two times for many reasons). The 2-3 bedroom with 1400-1700 sf is probably at 1.5 to 1.8 times rental costs, maybe slightly higher due to transfer taxes and eventual RE taxes.
Well, I just thought about my last post and realized how absurd it was. OK, everything but MY particular market does seem to be at least 2X rental for new construction. Mea culpa.
West81- I think that you get my point. I never said all packages will run out in a month. I'm also aware of the high education level and experience that most of these people have. I fully understand that many will find new job, however most will find it very difficult or impossible to earn at the same level. We all know that most people who earned $400 and up don't live in studios and would imagine that they need their bonuses more than their salaries to pay the monthly nut. It is projected that somewhere in the ballpark of 60,000 will be let go. (I know the number is debatable and no one knows for sure). Lets assume just for argument sake that 5% will need to sell their homes. That 3,000 more units on the market within the next year. With inventory at say conservatively 8,000 that's a 40% increase just from the layoff effect. Now add New Dev. and the inventory number could realistically hit 15,000 by this time next year.
Also if it comes off as arrogance I apologize, that was not my intention. At times It feels like many people would lie to their mothers to sell a piece of property. "Everything is great just pay the 1M and move on nothing to see hear". It's getting embarrassing.
Oh- West I'm sorry I don't work for a big firm, however I wear many hats in my profession and function in the identification of patterns.
"and function in the identification of patterns."
like ink blots?
JM- something like that.
dco: Haircut the impact again to reflect the small percentage of Streeters that actually own homes in Manhattan. The majority commute, including most of the big earners. Many who do live in the city are young analysts, traders and support staff who rent.
That's why I asked whether you work at a Street firm. You don't seem very familiar with the culture, economics or demographics of the business - all of which will shape the size and timing of the impact that layoffs and shrunken/restructured bonus pools will have on Manhattan real estate.
dco - Another thing you may be underestimating about the Wall Street tribe is their skill at assessing and managing risk (which is, in large part, what they get paid to do). Granted, they do a pretty crappy job where other people's money is concerned, perhaps because the industry is so riddled with perverse incentives and moral hazards. But for the moat part - Bear Stearns notwithstanding - they're quite good at it when their own cash is at stake.
15,000!
For years all we heard is how the wallstreet bonuses have been fueling the increase in property in Manhattan. Now I'm to accept the theory that they don't live in the city? Which is it? And for arguments sake lets assume the the majority of them commute from the burbs. How will it effect those areas? These were big money jobs. Actually most support staff don't live in the city. So according to you if young analysts, traders and support staff rent, then who lives in the city. Cops, Fireman, Sanitation workers? Who if not the wallstreet crowd?
I disagree that most people know how to manage their own money. I'm quite certain that a large majority of the wallstreet crowd owned a large portion of their own company stock. Most IB have been crushed with the exception of Goldman. So not only have many people lost their jobs, but their net worth has been greatly diminished.
Renting is a much better deal in this environment.
where the Hell IS New Rochelle???
You'd have to ask Mary Tyler and Dick Van Dyke.
Tyler Moore.
Why do they both have 3 names, and Rosemarie just had the one?
dco: I agree that there will be a weak market for new development and for resales. I just don't see a ton of people being forced to sell, at least not for quite some time and not all at once. We might be headed for a train wreck, but even if we are, I think it will happen in slow motion.
West81st. I agree with your opinion. I just want to add that I think the process is neither slow or fast. It's taking the time it needs to work through the circumstances it's handed. That's why I'm not to concerned with tomorrow. This problem will go way beyond tomorrow and the day after that.