WSJ Article on Q2 Manhattan Sales Figures

Again, more scare tactics by the media- BEWARE DO NOT BELIEVE IN THIS!

They are trying to scare the middle class "bread and butter" people here folks.

Again, they bring up the Wall St nonsense, which has absolutely nothing to do with real estate. So what if all these people are being fired?

Manhattan real estate never goes down. If you are looking to rent, you are getting taken. As our well informed and intelligent friend spunky says, BUY! or else face, the prospect of getting your "rent check ready" each month forever as you will be priced out!

Prices in Chelsea are going UP! What does the WSJ know?

And personally, I'm selling my 15 CPW estate - for which I paid a mere $199,000 - for one hundred thousand million gazillion gatrillion dollars, because it's on the ground floor with a view of the dumpster.

Funny. You balk when the "bulls" fail to see the light on your press, yet you do the same thing when someone posts a balanced article, which basically says "yep, there may be some softness, but there hasn't been much yet".

"Everyone is entitled to their own opinion, not their own facts."

Sorry, but you just can't wish the market down. You have been trying for a year and it hasn't happened.

Hee hee hee hee hee hee hee hee hee hee hee hee hee hee

I love seeig Steve and his lacky MMafia wrong on every data report.

The has not fell yet Steve. And if you continue to predict a down market year after year after year you might be right some day.

We are wishing the market to go UP.

BUY NOW or be priced out forever!!!!

just look at petrfitz- he's made $millions!! See what I mean? Can't go wrong.

"As they wait, rental prices are rising in Manhattan."

Can someone explain this comment? It is very confusing based on what I have heard from the real estate experts on this board. Why would rents increase? I wonder what happens when softness in pricing meets with increases in rents?

Juiceman "I wonder what happens when softness in pricing meets with increases in rents?" What happens is stasis. Prices stabilize and start to go up.

JM, you PROMISED never to discuss the state of the market again!

"Manhattan has a substantial list of other measures of support. Its housing stock is 70% co-op, whose notoriously scary management boards usually insist on decent credit quality and impose draconian rules about subletting. And the city remains a world capital, drawing many wealthy foreigners eager to take advantage of the cheap dollar."

Exactly.

Exactly what happened between 1988 and 1998.

All you who believe that prices will continue to rise in Manhattan 20% per year - you're 100% right! I give up! What's $1 million today will be $1.2 million next year. $1.44 the next. $1.73 the next.

It's absolutely logical. It always happens that way.

"As they wait, rental prices are rising in Manhattan."

Untrue for market-rate rentals. True for regulated rentals.

"And despite the dire headlines, Wall Street's bonus pool fell just 2% this year over last, hardly a sign of imminent crisis."

Untrue. Wall Street has not yet announced its bonuses.

True for 2007, however, which though usually paid in 2008 was taxable in 2007.

This is why I don't believe Jonathan Miller: "Logic says we'll see things move sideways for the moment. There's no external stimulus. I'm more worried about '09 than the next six months."

Absolutely not true. 20% increase per year forever.

Ah here it is again Actual Data versus Steve's Personal Twisted Interpretation of Data to fit his logic.

Even a broken clock is right twice per day. One day, perhaps in 2009, 2010, 2011, 2012 .. Steve's forecasts will materialize.

And MMafia continues to dream of Manhattan living from the window his Jersey City 1BR.

Boy, I agree with you guys and I still get criticized and defamed!

I've said it plainly: real estate prices always increase by 20% per year forever. Always. And better than that, they stay there, and never go down.

Which is why so many foreigners are rushing in to buy Manhattan properties all cash.

In all those co-ops that won't allow pieds-au-terre.

But how could that be? Isn't that self-contradictory: if co-op boards put in all these restrictions on subletting and pieds-au-terre, how could it be that "the city remains a world capital, drawing many wealthy foreigners eager to take advantage of the cheap dollar"?

Aw, shucks, let's just skip that over.

I now proclaim that Jonathan Miller is wrong. It's not true that the prices we're seeing today mostly reflect new construction on which contracts were signed a year ago. That's NOT TRUE. I don't know why J.M. - is JuiceMan really Jonathan Miller?! - would be worried about '09.

There's nothing to fear but fear itself!

"JM, you PROMISED never to discuss the state of the market again!"

steve, what I promised is not to debate the state of the market. After reading the article, I simply asked a question and petrfitz answered it. In fact, he answered it so concisely and accurately it is worth repeating:

"What happens is stasis. Prices stabilize and start to go up."

Feel free to discredit the article now because it doesn't "fit" with your past 6 months of ranting and raving or the fact that you continually gave me shit because I said there was a possibility that rents could rise and that would assist in market equilibrium. In the past, I would laugh at you for the rest of the day about how silly you are and you would post 10,000 words about every possible topic unrelated to my initial point to try and prove me wrong. Not today. The new, calmer JuiceMan will just thank petrfitz for his insightful answer and I can move on to another thread.

Isn’t it nice out today? :)

Actually, I found the WSJ article (and ONLY the article - not the commentary following by those either significantly bullish or bearish) to be pretty well reasoned, and a reasonably accurate reflection of what I have personally experienced over the past 4-6 months. There is a certain amount of bifurcation in the market, which, for what it's worth, is precisely what I experienced in the 1990-95 period as well. If you want to buy a home now (and not an investment/rental property), you really have to have a long(-ish) time horizon, a nose for value and quality, and be very patient locating a home that will hold value and make the predictable dip as shallow as possible. Otherwise, I think you're better off renting - for now.

I found the article to be very well balanced. It basically said that the true effects of the NYC market are still perhaps months away. The only problem I have is that housing numbers released today show further decreases, so if we follow the rest of the country then we have not hit the bottom and still await the true affects of the slowdown. And then a possible recovery. I hope we recover and start to hire ASAP.

Boy, finally I agree with you and you don't even say thank you.

"I wonder what happens when softness in pricing meets with increases in rents? What happens is stasis. Prices stabilize and start to go up."

That is truly insightful - for something with no real meaning.

Let me see if I can figure it out, though: softness in property prices will cause rents to go up.

Is that your argument? I think I've heard you say it before.

So I looked "stasis" up in the dictionary: "a period or state of inactivity or equilibrium."

Which is meant, "inactivity" or "equilibrium"?

Probably inactivity, since inventories are rising.

Let's see the argument rewritten, see if I can buy into it: falling property prices lead to increased rents, which leads to inactivity which leads to increased prices.

It sounds to me like it means that everything stays the same, because if falling property prices lead to increased rents, rents will fall again as property prices start to increase.

Meaning that it will get even more expensive to buy than to rent in the future.

And incomes and interest rates and credit availability have nothing to do with this equation.

I'm in! I buy that argument. That is true financial and economic genius.

Of course tregnyc.com says "The greatest year-over-year increase was 4.5% in non-doorman studios, which is right on par with standards of rent stabilization," which means that the greatest increase in market rental rates was no more than stabilized rents, which means that other increases were below the stabilization increase, which means that rents really aren't rising, but no matter. We'll just overlook that.

Isn't it a lovely day out?

Actually, now I agree with malraux, too.

"Otherwise, I think you're better off renting - for now."

please stop scaring people from buying!!!!

i missed the market and am now priced out forever- all i can do is watch from my measly Jersey City 1BR rental. don't do what I did- learn from my mistake!!

if you buy now, you may one day become like petrfitz and be a multi-millionaire with a trophy wife! listen to the smart ones like him and spunky. buy now!

Steve to make it simple for you. When people are not buying, and are choosing to rent, landlords like myself understand it, and start to raise rents. Rents start to go, as they are now, and fools like you who have been trying to time the market start to realize that all the insane logic they were trying to apply to the market is incorrect and that it is better to own than rent. They see landlords jacking up rents, not improving units, and basically saying "Fuck you pay me."

After a few FU pay me's people who can afford to buy, do.

Keep twisting facts and misapplying logic, and keep renting. Landlords like myself LOVE guys like you.

Ok, even though petrfitz curses like the above, don't let that detract you. He is one of the smart ones on this board- listen to him and buy now!!! one day, you'll see, you might become worthy of his status and be able to achieve the right to do the "FU pay me!!" routine!!!

I'll ignore the profanity as I've taken a vow to be nice.

"When people are not buying, and are choosing to rent, landlords like myself understand it, and start to raise rents. Rents start to go, as they are now, and fools like you who have been trying to time the market start to realize that all the insane logic they were trying to apply to the market is incorrect and that it is better to own than rent."

Falsehood: "fools like you who have been trying to time the market." You cannot "time" an illiquid market.

"F*ck you pay me." That would work if you had the only property for rent in the city, but fortunately, you do not.

Falsehood: "Rents start to go [up], as they are now." Market-rate rental prices are stagnant or falling. "Stasis," I think you called it.

Falsehood: "When people are not buying, and are choosing to rent, landlords like myself understand it, and start to raise rents."

Let us assume, for a moment, that everyone in New York City who is not currently homeless currently has a home. Do you agree with that? If you do, then no one needs either to buy a property or to rent one, because they already have one. Your argument would therefore require an increase in population, because only people who currently don't have a home in NYC will need one.

Or, if you raise the rent too high, it would be a constructive eviction - you would force someone to move. Then you'll have to get someone else to rent in his place. Who might this person be, if not someone newly arriving on the shores of our great island? Someone who earns 40x the monthly rent.

And if no one makes 40x the monthly rent, then you will a) have to lower the rent, or b) accept a credit risk.

Of course each and every time you constructively evict a good renter who pays on time, you do incur a credit risk with a new renter whom you do not know, you do run the risk of having the property lie fallow whilst searching for your mysterious new renter who makes 40x the annual rent.

Steve says "You cannot "time" an illiquid market." are you not timing it by repeatedly saying that you are renting until the earnings to rent ratio goes down???? Your whole argument is about market timing.

Steve says ""F*ck you pay me." That would work if you had the only property for rent in the city, but fortunately, you do not." I dont have the only property in NYC but I know that if a tenant wants to move out it will cost him a brokers fees of 12-15% of yearly rent in brokers fee to find a new place. Also I will have new tenants banging down my door to live there. So yes its veryeasy to say "Fuck you pay me"

Steve you area fool. A renting fool who also bought in a market that is quickly declining - fire island. I guess that success gives you the right to bag on those of us in the Manhattan market who own and have made 15% this year.

While I'm mildly disturbed that petrfitz is posting his inanities on this board as well (Curbed was ruined a long time ago), I find it amusing that he bashes trying to time the market, when that's exactly what he's claiming to be doing with his rentals. Nevermind that you can choose to buy/sell when you want to, whereas in the vast majority of cases, you have to wait for a lease to be up to "jack up" rents, and say "f** you pay me."

Look at this STUPID thing that cnbc.com just published:

JPMorgan has cut its investment banking staff so far this year by about 15 percent, and Winters suggested that additional layoffs at JPMorgan could be in cards given the market environment.

http://www.cnbc.com/id/25211297

They did NO SUCH THING. In fact, they HIRED EXTRA PEOPLE to integrate their data systems. JuiceMan told me that.

You know what else cnbc.com "reports"? (And I use the term loosely."

"JPMorgan has withstood the impact of sub-prime collapse better than most firms, but like its Wall Street counterparts, profits have been hammered so far this year in the investment banking business."

More truthiness on the part of these people whose only goal in life is to talk down the Manhattan real-estate market.

"are you not timing it by repeatedly saying that you are renting until the earnings to rent ratio goes down"

That's not timing. It's the essence of good investing: waiting till you can get something at a good price.

Timing is done by day traders.

"It will cost him a brokers fees of 12-15% of yearly rent in brokers fee to find a new place."

Didn't cost me a penny.

"Also I will have new tenants banging down my door to live there."

You will have them "banging down your door" to pay a 12-15% brokers fee?

It seems self-contradictory.

"I guess that success gives you the right to bag on those of us in the Manhattan market who own and have made 15% this year."

It's difficult for me to stick to my vow of niceness, but I will. You assume you've "made 15% this year" when you haven't sold any of your properties. They only way to know what they are worth is to sell them. Everything else is a fantasy.

Steve - I sold 2 properties this year. No Fantasy.

Also - there is no proven data that connects Wall Street layoffs or earnings and RE prices. Only supposition.

Yes - renters bang down my door to rent at higher prices and pay broker fees.

Good point dco, and I agree with your assessment of the article.

"I sold 2 properties this year. No Fantasy."

But you didn't buy them this year, so you don't know how much of the profit accrued this year.

"renters bang down my door to rent at higher prices and pay broker fees."

I see - the more you raise the price, the more people want it. Behaves sort of like a diamond, then, doesn't it?

"There is no proven data that connects Wall Street layoffs or earnings and RE prices. Only supposition."

You make niceness very hard.....

However, I do agree with dco, and now with JuiceMan, and malraux, that we have not seen the effects of this yet except as increased inventory - 8,181 as of today, an 11-month supply not counting lots of new development - and downward listing prices. There's a least 6 months to do before actual prices start falling, because there's lots of new construction in the pipeline, and last year's Wall Street bonuses were pretty decent.

Steve - the only thing that I can say is that you are a complete A Hole.

Cool -- now it is 6 months before prices are falling. In the "Dow will bet at 11,000" started in late 2007 I thought prices were going to plummet in Q1.

Who am I to believe now that I have wasted another year waiting while mortgage rates are still at record lows and my money wallows at 3% in a money market.

I will keep saying to myself "just six more months, just six more months, just six more months . . ." and all my market crashing dreams will come true!! :)

stop thinking to yourself six more months!!!

it will NEVER go down! Manhattan real estate NEVER goes down? How come you guys just can't understand that simple fact?

stop waiting! you will be priced out forever! see all the smart europeans buying? what are you waiting for? buy now!

btw- DOW will never be at 11,000!!! what kind of a moronic statement is that? what? just because it's at 12,100 now? all of a sudden you think it will go down to 11,000???

silly goose!

MMAfia: Your repetitive histrionics are becoming embarrassing. Do you have Ass-perger's Syndrome like weasel-boy stevejhx? Calm down.

"Steve - the only thing that I can say is that you are a complete A Hole."

petrfitz, that's the nicest thing you've ever said to me! And because I value your opinion and insight, I will treasure it always!

malraux, here I agree with you and you persist with the insults. How unfortunate.

To the ultra-bears, please let me know when is the right time to get into the market. I am looking to purchase in Manhattan and have heard that prices are inflated by 50%. I have been trying to time the market based on some predictions that have been made in the past, but they don't seem to reliable.

In this thread:
http://www.streeteasy.com/nyc/talk/discussion/2496-the-sky-is-falling - 7 months ago
"First and second quarter of '08 is where you may notice the effect." - aboutready

In this one:
talk/discussion/1270-do-not-be-fooled - 14 months ago
"So, don't be fooled. Wait for the actual CLOSING figures to come out in a couple of months." - MMAfia

In this one:
talk/discussion/2047-today-starts-the-official-downfall - 11 months ago
"I call a 15% correction coming in Manhattan real estate before January, 2008" - HimWhoKnows

In this one:
talk/discussion/2211-subprime-mortgage-crisis-spreading-to-high-end-housing-market - 9 months ago
"Watch for Q4 stats this year, where will should start to see the beginning of the effects of the crisis that just struck weeks ago." - MMAfia

No seriously, everyone kept saying 11,000 by Jan 1 and a total RE market collapse in Q1 . . . if I can't trust the experts on this board, who can I trust? Because isn't making money all about timing?

So if I shorted the Dow in Jan, and sold all of my property in December, why am I not rolling in dough and picking up an apartment on the cheap today? That's what you all said, remember?

...six more months, six more months, six more months . . .

"Watch for Q4 stats this year, where will should start to see the beginning of the effects of the crisis that just struck weeks ago."

Sage. Inventories rose, and continue to rise.

"please let me know when is the right time to get into the market."

When prices are 12x annual rent.

So is that in six more months?

May 23rd 2010 at 7:32pm...most likely.

jsmith -- unbelievable sleuthing!

nothing can shut down an argument than someone's own words . . . nice

Seriously, I was mistaken. I was wrong before to think Manhattan real estate would come down.

I have learned- Manhattan real estate ONLY GOES UP and NEVER COMES DOWN!!

Buy now or be priced out forever!!

Don't be like me who didn't buy and now rents a tiny 1 bedroom in Jersey City. I can only look out the window not and dream.... *sigh*

Remember... BUY NOW!!! Don't you dare think about renting and turning up like my sorry self! Look to petrfitz's $millions and beautiful wife as your motivation to buy!

MMAfia, you should be ashamed of yourself.

I am ashamed. I should have listened to the smart people like spunky and petrfitz and bought last year... that was a really good time to buy real estate in Manhattan.

Actually, it's always a good time to buy real estate in Manhattan since it ALWAYS GOES UP.

Now, I have to continue paying rent to my landlordmaster... I'm worried that he will pull the "STFU and pay me!" routine that petrfitz enjoys putting his poor tenants through.

Now, I will look back in 3 years and say, DANG, I should have listened and bought back in 2007! I could have made soooo much money if I did that!!!

Man, why couldn't I be smart back then??? Now I'm priced out forever.

I am ashamed. I should have listened to the smart people like spunky and petrfitz and bought last year... that was a really good time to buy real estate in Manhattan.

Actually, it's always a good time to buy real estate in Manhattan since it ALWAYS GOES UP.

Now, I have to continue paying rent to my landlordmaster... I'm worried that he will pull the "STFU and pay me!" routine that petrfitz enjoys putting his poor tenants through.

Now, I will look back in 3 years and say, DANG, I should have listened and bought back in 2007! I could have made soooo much money if I did that!!!

Man, why couldn't I be smart back then??? Now I'm priced out forever.

ahhh . . . now it is 3 years. I thought it was 6 months.

"three more years, three more years, three more years . . ."

Some comments have said below that people delay in buying due to the market concerns have a positive (for the landlord) upward effect on rents.

These are 1 beds in same building and same size over the last 9 months

listed last August 07 at 3,000
203873-condo-236-east-47th-st-turtle-bay-new-york

listed last December at 3,300 and dropped to 3,100, same size apt
261480-236-east-47th-street-turtle-bay-manhattan

On market 17 days - 1 bed @ 3,000
http://www.streeteasy.com/nyc/rental/358856-condo-236-east-47th-street-turtle-bay-manhattan

Just listed 1 bed @ 2800
http://www.streeteasy.com/nyc/rental/369824-condo-236-east-47th-street-turtle-bay-manhattan?email=true

Same apt size and layout and the rents are heading in one direction...and it is not up ???

jsmith9005...very nice.

So....the best thing to do is buy an apartment (cause the price never goes down) and then rent it out (cause rents are also going up). So it seams to make sense that I should (a) buy several apartments that I don't want to live in and (b) rent them out for profit until I can cash them out for 100% appreciation in 3 years.

Memnonhi, you've hit the nail on its head.

That is exactly what all the smart people have been saying here on this board for years.

Listen to them, and you will be rich like petrfitz and spunky.

... and if anyone tells you different and start pointing out that that what's they said in Florida, Las Vegas etc., tell them to stop spreading fear.

as we all know, Manhattan is different- everyone wants to live here and they're not making anymore land in this tiny island.

That's right, Memnonhi, you've got it right. It is the only asset in the world that ever goes constantly up and never comes down, at approximately 20% per year.

The more rents go up, the more prices come down. No. The more prices come down, the more rents go up. Then because rents are going up, prices will start to come down. No.

Wait.

Steve - the only thing that I can say is that you are a complete A Hole.

How rich? Spunky rich or Petrfitz rich?

Fire Island rich.

There were some very scary housing and inflationary numbers released today. Everyone knows where I stand and I'm not posting this to be an A$$ (mainly because JM and I have a truce and Steve started a thread that allows negativity) but seriously, if we don't get a handle on this "Mess" credit, housing and inflation (commodities) we are going to be in some serious trouble. Everyday that these problems exist allows another foreign company to cherry pick US businesses and firms. This is way more serious problem then the war we each wage about real estate. I'm seriously considering increasing my cash reserve (don't let the technicality fool you, All I mean is keep more money in my rainy day fund for bills just in case the pink slip comes without notice)

Steve and all the doomsday predictors. BAC down 1.14 hows that dividend holding up??? Steve, have you ever owned a property in your lifetime. I bought my primary residence in New Jersey 19 years ago and have seen a 600% increase. I own 2 apartments on the east side of Mnahattan which have gains of 80%. I know real estate doesn't appreciate 20% per year, but over TIME it has been a superior investment. You or I do not know the future of Manhattan real estate but having grown up in the Bronx and seen the transformation of New York over 35 years I am willing to put my money into Manhattan and feel quite secure that with a prudent investment I will reap the benefits of BUY AND HOLD transactions and continue having tenants paying my mortgage with banks as my partner except when the profits come in as they have in the past and I owe the bank none of them.

"I will reap the benefits of BUY AND HOLD"

classic definition of a BAG HOLDER.

This is scary- I guess I'm not the only one worried.

RBS Warns of Stock, Credit Market Crash: Report
Topics:Stock Market | Economy (Global) | Corporate News
Companies:Royal Bank of Scotland GroupBy CNBC.com | 18 Jun 2008 | 06:32 AM ET Font size: The Royal Bank of Scotland issued a stark warning to investors Wednesday, stating global stock and credit markets could be on the verge of a fully-fledged crash as central banks have their hands tied by soaring inflation, the Telegraph reported.

"A very nasty period is soon to be upon us - be prepared," Bob Janjuah, credit strategist at RBS, told the UK daily paper.

The S&P 500 index is likely to slump by more than 300 points by September, according to a report from the bank’s research team, as "all the chickens come home to roost" from over-easy lending practices and other excesses of the global boom period, the report quoted by the Telegraph said.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names. Cash is the key safe haven. This is about not losing your money, and not losing your job," Mr Janjuah told the paper.

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RBS expects US stocks to continue to gain until early July before the effects of the oil spike start to drag on momentum, the Telegraph said.

Bob Janjuah was not immediately available for comment.

© 2008 CNBC.com