Urban Diggs Article on Mid-Year Sales Trends

here comes steves stupid, incorrect interpretation

This is where I stopped reading: "I can generalize this update to you folks, but there will always be that prime property with fascinating views, insane renovations, or the perfect location that finds the perfect target buyer willing to pay top dollar. That's what makes Manhattan such a different marketplace than say Miami or Phoenix."

And what is wrong with that statement?

prime property with fascinating views = 15 CPW/ Plaza penthouse

That's right: at $14,000 per square foot.

Linoleum tiles only cost about a dollar a square foot.

They use linoleum tiles at 15 CPW? Oh my. I thought even the staff apartments have Brazilian wood floors!

And personally, I HATE the outside of CPW. It looks like low income housing!

uws, your thread about me was removed.

:***(

What is "Brazilian wood," and why is it better than, say, wood from Connecticut?

Honestly 15 CPW looks just like the Westminster:

http://thewestminster.com/

All of his buildings look the same, he doesn't design them anyway, and the apartment I had had half the window covered by a wall because the windows are uniformly places but the rooms are of different sizes.

I need to become a brand on somewhere other than streeteasy.

Steve do you work with buyers on the field of Manhattan real estate? Do you know what they ask for, and what they say they are willing to pay more money for? Just love how you take a statement and tweak it to prove something that you can feast on. Man, your stretching. Your the new spunky, exact the opposite sentiment.

Urbandigs, don't get so defensive. Honestly, I went back and look at your other posts, and you've changed.

Do you know how often I've heard this: "That's what makes Manhattan such a different marketplace than say Miami or Phoenix." Well guess what, they have views in Miami and views in Phoenix. They have insane renovations and perfect locations, too. And they had people willing to pay top dollar - until recently.

You're looking at the market as a salesman right now, which you should. I'm looking at it in terms of market fundamentals, or the lack thereof. Nobody can buy what he can't afford and hope to keep it, as we're seeing. Owner-occupied residential real estate is worth no more than the cost to rent an equivalent place. There are market constraints, and those constraints are not views or renovations or locations. Those constraints are incomes and leverage.

You're aware of the 50% increase in inventories in 6 months. You're aware of all the new development coming online. You're aware that Wall Street is in crisis mode. So you should also be aware that renovations do not sell properties. Income does, and it's falling.

I did not "tweak" your statement. I copied it directly, and it is where I stopped reading your post. Look back at what MMAfia said was going on in real estate boards in Phoenix and Miami a few years ago. I sold at the peak of the Miami boom, prices are down 30% since then. But at the time, predicting it would never end, it was a) Miami is special; b) foreigners; c) anything else they could think of.

Which is essentially what you said about Manhattan: "there will always be that prime property with fascinating views, insane renovations, or the perfect location that finds the perfect target buyer willing to pay top dollar." i.e., it's special.

It's not.

You are denying the existence of properties that have CP or River views trading at a higher price per sft than properties without these features + the fact that there are buyers out there willing to pay a premium for these features. That is my problem with your responses. How do you not see this?

I NEVER said those properties can't correct with the overall market, or that macro fundamentals woud never hit these properies. You just assumed that and tweaked the interpretation of the statement to fit into your response. I can care less if you read my posts, what you state here, or your opinions on macro/manhattan housing or how I view the markets in general. You have your opinion, and thats it.

You should re-read your comments before saying Im defensive. Your constantly defending your opinions on an hourly basis.

No urbandigs I am not denying "the existence of properties that have CP or River views trading at a higher price per sft than properties without these features + the fact that there are buyers out there willing to pay a premium for these features."

I do deny that "there will always be that [...] perfect target buyer willing to pay top dollar."

There won't.

urban
Substitute "target buyer" with a "sucker" and you have it right.
More like a sucker willing to pay top dollar. The rich don't get richer by paying top dollar in a declining market.

Although I don't think the country will fall into a recession, I think the next 2 to 3 years there will be massive deflation in Manhattan real estate, and all the gains made from 2003 will be wiped out, barring some unforeseen stroke of good luck. The proposal to raise the cap on federal guaranties on mortgages will not help Manhattan very much. In 5 years Wall Street will not look like it does today. Citibank will be decimated: they have so many bad investments on their books that they can't write them down all at once because they would go bankrupt. Merrill will have to take an impairment charge for First Republic. Lehman won't have access to capital and it will have to be bought. Since it seems likely the Democrats will win in November, Wall Street will be re-regulated: as soon as it became apparent from BSC that the federal government will have to step in to save investment banks lest the whole international financial system collapse under counterparty risk, the federal government started to take action to control that risk. Maximum leverage will be regulated. Assets will be brought onto balance sheets. Counterparty risk will be regulated. In all, and entirely different environment. Like accounting firms, risk-rating institutions will be held liable for their ratings, which will make them exceedingly cautious about given triple-A ratings to securities backed by mortgages to people who can't afford to pay them back.

Wall Street will recover, but it won't look the same, just like it didn't after 1929. You're looking at a massive restructuring of an entire industry.

Oh, and there will be no more "carried interest."

I think Urbandigs was merely suggesting that some properties can command premium prices to market levels based on unique characteristics. I don't think he was suggesting that top dollar consistently increases - it's top dollar at that point in time in that market. Urbandigs, apparently, you have to be extremely careful with your words and qualify every statement so it won't be misinterpreted.

Surdy, some people choose to maximize utility rather than wealth and would prefer to make a potential near-term financial mistake for a property they love rather than wait it out and hope to find a comparable place at the very bottom of the market. And no, I did not just buy.

"Urbandigs was merely suggesting that some properties can command premium prices to market levels based on unique characteristics."

That is true (most of the time) but it doesn't seem to be what urbandigs said. He said, "that "there will always be that [...] perfect target buyer willing to pay top dollar."

Well, there won't.

Unless there is a market with absolutely no buyers, there is at least 1 buyer paying top dollar. I can't believe that I am stooping so low as to respond, but unfortunately I don't have the luxury of defenestrating stevejhx.

buster - yes. I never said these properties wont move with the market, only that these characteristics will draw in a certain buyer that is prepared to pay a premium for them. This type of buyer even exists in slow markets, just not to the extent/volume that they did in more active times. Maybe they will correct at a slower level than properties that fall into the average category with no defining feature such as a open view of central park.

Steve is saying this type of buyer won't be around anymore. I disagree.

Noah is right. Views do make a difference. Back in 2001, I put my 2nd floor apartment on the Lower East Side up for sale, and did not sell it until 2003. Most buyers did not even look at the bedrooms or the kitchen because the view stunk. Yet, higher floor apartments were selling in a matter of weeks, even though many of them were not renovated, unlike mine.

If you seriosuly think that views don't add a premium, you are extremely misinformed.