little black arrow point down

and malraux and ccdevi and vverain and all the rest.

The market is dead. JM's hail of falling inventories belies the fact that they're back up to about 8,000, and we're starting to see luxury overpriced condos turning into luxury overpriced rentals.

There was no spring busy season. We're in the summer slow season moving into the fall even slower season. Merrill is about to start selling assets to raise even more capital. Citigroup is dying. Morgan Stanley and Lehman about to be downgraded. Feds not to allow further equity dilution, meaning fire sales or outright shutdowns of business lines inevitable.

I'm moderately bullish on Manhattan in the short-term, maybe see 10% to the upside by year end.

To paraphrase JuiceMan.

To paraphrase me, I'm glad I don't have a down payment on a unit just about to get a CO, that I couldn't sell and couldn't rent at a high enough price to cover my costs.

To paraphrase ccdevi, "I can't believe you're so happy about the economy being in the crapper."

Not so much the economy. Wall Street.

Steve - good to have some common sense on this board.

I tried to tell everyone how it made no sense to buy and renting was a much better "investment" than an overpriced condo - nobody listened (except for MMafia)- foreigners will save us all and Manhattan is different is all I heard. Prices have to fall AT LEAST 50% to even come close to break even with renting. I've been away because I actually left Manhattan for a number of reasons (not the least of which was that I was not about to spend $25,000 on a closet in the west village and pay crazy taxes anymore (sorry but anything over 250k makes you very rich in the US Govt eyes, but in Manhattan you live like a bum - also an indication of the wacked out RE market as less than 5% of Manhattanites make that much, yet somehow median price is 1MM) and though I do miss the city, with the money I save and life I get to lead I can visit all the time. For those who are still there - listen to reason, run the numbers, don't jump into anything...I almost did and thank whatever type of higher force that helped me every single day that my offer was rejected and I had the insight to actually think about buying RE...this downturn is going to be bad....very bad...as I have said before, if you buy now you will lose a ton of money...so please people just think OK????

I'm right here steve. Still pointing out when you lie and/or mislead. And yes I still cant believe how happy you are with people's misfortune. You should move to Africa, you'd be ecstatic.

I agree - 50% fall. Even prime areas in San Diego are down 35-40%. I sold my 2-br 2-ba luxury south beach condo the day before Wilma for $1 million, the one 3 floors above it is (still) for sale, now for $697k. When it gets down to $499k - what it cost to buy in 2000 - it will be worth what it would cost to rent.

Don't believe the "no subprime / alt-A in Manhattan" lie. A lot of this new dev are flippers who are going to have to take a huge loss to sell, or walk away, or take a cash-flow loss every month. Then, like 75% are jumbo ARMS, which probably won't reset (higher) for a few years, meaning that this downturn is going to endure. No quick fix. Wall Street will not come back in its present form ever again. This is worse than the S&L crisis in the 80's (the last housing crash). We're talking about $500 BILLION in worldwide losses.

After dot.com and this, Wall Street is going to be re-regulated.

"Still pointing out when you lie and/or mislead."

Point away. Not once can you find.

I will say, however, to your credit, that you were far less bullish than most.

On falling inventory, I think it has more to do with people pulling places off the market that did not sell in the spring selling season. I watch the table on urbandigs.com, and note that, while inventory has fallen slightly in the last month, new listings has exceeded sales by 600.

As most of this pulled inventory will return by spring, I do not see this as bullish for the market...

If not pulled, then converted to market rentals for new dev.

Anon3_is_back, why aren't you using your old anon3 handle?

lost my password JM - I knew you would still be here! Where is your old pal Spunky?

odd, it is pretty simple to get a new password emailed to you as long as you can verify the email address.

little black arrow point down!

Anon I beleive if you bought a condo in 2007, 2006,2005, 2004,2003, and 2002 in the West Village, Tribeca, Greenwich Village or Soho you would of made out quite handsomely. Yep even if you bought a condo in the West Village recently in 2007 you'd be ahead of the game.
Now if you purchased one in Harlem, the far UES and the financial district back in 2007 then maybe then you'd be down a few percentage points. Once again it all depends on where in Manhattan you are referring to. Same holds for rent. Try getting a lower rent in the West Village, Tribeca and GV than last year.

Spunky: I can't comment on any of the segments you mentioned, because I don't track them. In my segment (UWS, 2-4BR), The situation is starting to look a bit grim for anyone who needs to sell, especially if they bought in the last three years.

I'm not sure a pure "mark-to-market" approach (i.e., "What could I get if I had to liquidate tomorrow?") is applicable, since most owners have the option of holding their properties or renting them out; but on that mark-to-market basis, the gains of the past three years have been largely wiped out, at least for apartments that lack any distinctive appeal. Closings on contracts signed since Bear went belly-up suggest a drop of 10-20% from the peak, and a number of listed properties appear to be chasing the market downward, in a cycle of competitive price cuts. I've been posting examples as I see them on the thread below:
http://www.streeteasy.com/nyc/talk/discussion/3339-if-you-can-demonstrate-market-movement-with-comps-please-post-here.

Admittedly, I'm only watching one segment, and the data is sparse. Still, I think UWS meets anyone's definition of superprime: it might not be as trendy as Tribeca or Soho, but it certainly participated in the bull market, and what it lacks in sex appeal is made up for, I think, by one of the most stable market bases in the city.

West81st good point but am not at all familiar with te UWS. I'll stick to what I know best and that's the West Village, Tribeca, GV and Soho. In any market it's location and I'm bullish this year as well as long term for this area of Manhattan.

Fair enough, Spunky. Let's keep monitoring our respective markets and comparing notes. The divergence could be an interesting story over the remainder of 2008.

Thanks anon3, just making sure we are dealing with the original. Welcome back. As pseudonym and I expected (but you never confirmed) you don't live in Manhattan, was it Scarsdale I think? Doesn't matter, I wouldn't get to excited about "predicting" a down market. This is an economic cycle and after predicting a downturn for five years, you are bound be right sooner or later.

Based on previous threads that I've been following - I think West81st has the best understanding of the UWS at this point. (And I've lived in the area for years.) I can't speak to downtown.

West81st, do you only track co-ops? I track the UWS condo market and there is squat worth looking at and prices are still pretty agressive.

JM: I track both. My analysis is co-op heavy for two reasons: first, there are more of them in the neighborhood. Second, I tend to focus on resales (which, again, are predominantly co-ops on the UWS) because I think resales are somewhat more transparent. With new construction and conversions, you have the developers/sponsors playing all kinds of games with incentives and transfer taxes to hide the reality of price cuts.

I do look at same-floorplan sales within new condos, since the analysis there has the advantage of identical units with identical fixtures/finishes; but always with the caveat that the recorded sales price may be somewhat misleading.

And by the way, I agree that the available condos are mostly crap. You were interested in pre-war, no? The recent conversions are really awful.

One other thing about conversions: although they are lousy sources of data, they are great sources of gossip. That's especially true of projects like Sabrina and Avonova, where a lot of crusty old tenants are still holed up. It's less true of ParkColumbus, which looks like

...looks like somebody cleared it out with nerve gas.

I've been keeping track of the UWS condo market (1BR) and I think that the UWS coop market is softer. Uninteresting condos have been sitting on the market and sellers have been unwilling to budge. e.g. there are lots of resales at the Trump towers but doesn't seem that there is much movement. Maybe the sellers don't really need to sell and are just fishing. The interesting ones I've seen seem to be staying longer on the market than expected. e.g. 311 Amsterdam - with the interest at the first open house I thought it would have been in contract in 1-2 weeks. But they are still having open houses.

JuiceMan- "I wouldn't get to excited about "predicting" a down market. This is an economic cycle and after predicting a downturn for five years, you are bound be right sooner or later".

Tell that to those who are going to lose money. JM- It still surprises me that you would refer to this as "an economic cycle". Is this really what you think is happening. There has never been, in the history of modern economics, a similar crisis like the one we face today. It's not just the US, it's global in size literally. I laugh at how people still refuse to recognize the significance of the economic events unfolding on a daily basis. There are parts of this country that has seen real estate drop over 50% in 6 months. There are Banks that are literally broke and are only still in business because the fed keeps lending them money. They are flat broke and people are being lied to everyday in order to support their market value that is ZERO. People are actually holding share at $15, 20, 25, or 30 share that are not worth anything. Eventually the music will stop and the fed will have no choice but to stop the madness.

JM- I know we don't agree on much but please tell me ( forget about real estate for the moment ) that you see the problems. Never have we had all of these events occur at one time in the economy. Now consider this on a global scale. The market are down 20% since Oct. and there is not one reason to think that this is even close to over. I mean Europe is just starting to feel the pinch.

The thing that worries me the most is this. With energy and food inflation getting out of control and the effects it will have on the consumer why is the FED not raising interest rates to strengthen the dollar to head off inflation? The feds reaction to this question is what scares the hell out of me. Consumer spending accounts for 2/3 of the economy. Knowing that inflation posses the greatest risk to the consumer the fed has decided that raising interest rates now would hurt the economy more. That leads me to believe that the FED knows that the liquidity and banking issues are still the biggest threat. What does the FED know that we the people don't? The Banks are on the verge of a major meltdown. The FED has concluded that the consumer and inflation if not their priority. Can you imagine that $5/Gallon for GAS or Milk is not a priority and they fear other indicators. What happens when single family homes and buildings get oil deliveries this fall. To heat a 1500 sq ft. house for a month will cost about $1500/month. And inflation is the second in the priority pecking order. I can't even imagine the real extent of the liquidity problem and actually how many Banks are actually broke.

How many more heads of these Banks must lie to you people for you to realize this is not a normal cycle? Good luck and hold on to your cash for the rainy day that's here.

dco, the Fed is not raising interest rates because banks/firms like Citi, Merrill need to raise money from foreign sources such as sovereign funds. The Fed holds interest rates down to keep the dollar (and dollar denominated assets, like bank stock) cheap. This is basically what kept Citigroup from going belly up.

Next up, Merrill Lynch Peirce Fenner and Smith. Paging Dubai, the white phone please.

80sMan- I know and that is precisely my point. The Banks are in such bad shape that they have no choice. If everything was OK and we were in the "9th inning" of this credit debacle, don't you think the FED would be more concerned about inflation. That's what worries me. Things have got to be far worse on the banking front for the FED to ignore inflation. I don't know how anyone can trust these CEO's. How many more times are we going to hear that they don't need to raise more money only to hear the following week that they need billions. It's a joke and soon we will all see just how bad.

Like I said Europe is just getting started.

http://www.msnbc.msn.com/id/25440986/

"There has never been, in the history of modern economics, a similar crisis like the one we face today."

Better check your history books pal. Reasons may be different but result is the same.

"There are Banks that are literally broke and are only still in business because the fed keeps lending them money."

You haven't heard that story before?

"I know we don't agree on much but please tell me ( forget about real estate for the moment ) that you see the problems."

dco, I have seen, recognized, and understood the problems for a long time. Just because I don’t opine daily about bad news and worry myself sick thinking that the world is going to end, doesn't mean I fail to see the issues. How many times do I need to answer this question for you? I'm sorry that my positive long term outlook offends you but, trust me, there are still many things to enjoy (and invest in) in a down economy. Why don’t you and MMAfia figure out a more productive outlet for your fear than writing about Martians, foreigners, and people losing their jobs? It is quite boring, adds nothing to this board, and everyone knows that the economy is struggling. What is your fascination repeating the same crap over and over again?

JuiceMan- "Better check your history books pal. Reasons may be different but result is the same."

Perhaps you are referring to the great depression? I don't even think that had all the problems that are facing us today. You say you have seen and recognized the story for sometime, however in the past you acted as if this was all just going to blow over. What happened? The truth JM is the evidence to support people like me, steve and mmafia is becoming overwhelming on a daily basis and now you and some others want to act as if you knew it all along. I call BS on you and the rest for not recognizing the problems month's ago and encouraging people that Manhattan real estate is always a good buy and the economy was fine. Your a quack and now everyone knows it.

The Fed will keep rates low until after the election. Imagine what would happen if Citigroup went under. What if all Citibank accounts were frozen tomorrow? That's the Feds biggest worry. People can grumble all they want about high prices but if a major bank goes under...

We have seen this problem before: irrational expectations.

You can thank congress for weakening Glass-Steagall to the point where Vikram Pandit's $800MM hedge fund is commingled with mom and pops savings account. The whole financial system has caught a cold at this point.

Only 5% of Manhannites make over $250k/year? Is that based on population or on households?

Why does anyone listen to dco or steve? Both of them have been proven to constantly post misinformation and nonsense. I will take seriously those who provide logical, rational, accurate, complete and verifiable analysis based on facts, not those who distort information and provide only half a story in order to make their biased opinions look good.

LICComment- I understand your frustration, however dco and steve are not the cause of this housing debacle. If you bought at the height of the market I'm sorry, but don't blame others for your silly financial decisions.

Just so we're clear LICComment would recommend buying today? Yes or No. My guess is that you can't even answer that simple question. I'll show you how easy it is. NOOOOOOOOOOOOOO. (nowhere). Come on LIC just give it a try I know you can do it.

And while were at it, how are sales in LIC? Looks kind of depressing on that side of the river.

LICComment- "Why does anyone listen to dco or steve"?

The same reason you listen. To get educated.

LICComment- Where have you been? I missed the banter. My guess is that you were trying to convince some of your clients not to back out of those new development contracts in LIC. Well best of luck, any one with half a brain would realize that paying 1M for a condo in LIC is nuts. I wonder how it feels to lose $200,000 at a closing.

"To get educated."

I literally couldn't stop laughing. Finish high school first, then maybe you can educate someone.

I'm not a broker or in any way involved in the real estate business. Another example of wrong information from dco. I also bought my first place in 1998, so you can judge for yourself as to the height of the market.
As for LIC, I attended an event last week where I met a few hundred people that just bought or are looking to buy condos in LIC. The interest and demand looks very good, especially considering the market that we are in right now.
Would I recommend buying now? I have answered that question several times on these boards, so of course dco lies again and says that I haven't. If a person finds a place they like, that fits their budget, and plans to stay in their place for more than 2-3 years, then yes I would say they should buy and they would be better off for it.
dco, I hate to break this to you, but no one here is taking you seriously.

"Both of them have been proven to constantly post misinformation and nonsense. I will take seriously those who provide logical, rational, accurate, complete and verifiable analysis based on facts, not those who distort information and provide only half a story in order to make their biased opinions look good."

LICC: We can't make you understand things that are beyond our ability to comprehend. If you can't understand that a marginal tax rate is always higher than an effective tax rate in a progressive tax system, there's nothing I or anyone can do about that.

"I will take seriously those who provide logical, rational, accurate, complete and verifiable analysis based on facts."

At this point no one can be concerned about what you "will take seriously," because you only take seriously the things you want to believe.

It is a fact that as of last count, 23% of all Manhattan properties listed in streeteasy have had a price reduction within the past 60 days. It's a fact that as of today, for Manhattan prices under $2 million, 25% have reduced their asking prices (1394/5549) and still inventories continue to rise.

That does not a bull market make.

The fact is that there are constraints on how much you can afford to spend on housing: to purchase, 28% of your gross income. To rent, 40x the monthly rent. So if you make $100,000, you can afford $2,333 per month based on 28% of your gross income. To rent, the figure comes out to be $2,500 per month ($100,000 / 40). Approximately the same, which makes sense because if you own a property you have maintenance and other expenses that a renter doesn't have.

The fact is that banks do not take the "tax benefit" into account as part of that 28% figure. It is a cash-flow figure.

Thus, if you make $100,000, the largest 30-year fixed mortgage you could take out would be approximately $350,000 at 6.5%, which would give you mortgage payments of $2,212.24, plus tax and common charges (and I'm being generous). A $350,000 80/20 mortgage implies a purchase price of $437,500.

There are:

Sales in Manhattan
We found 364 listings for no more than $400,000

So of you make $100,000 in Manhattan, you have 365 apartments to choose from, some of which, if you look, are actually in the Bronx.

If you want a prime Spunky neighborhood, you will have 21 to choose from.

There is a disconnect between the price of real estate in Manhattan and the incomes of Manhattanites and, in case you haven't noticed, incomes in Manhattan are falling, thanks to the carnage on Wall Street.

Historically, the purchase price of real estate is 12x the annual rent:

http://money.cnn.com/magazines/fortune/price_rent_ratios/

This is Fortune Magazine, not me. It is "logical, rational, accurate, complete and verifiable." Click on P/R ratios and look up New York. The figure is 11.7x. The figure in 2007 was 17.8, meaning prices would have to fall 35% to be in historical equilibrium.

In other words, we're out of equilibrium. I pay $4,500 per month to rent a 2-bedroom, 2-bathroom 1,000 square foot apartment in prime Chelsea, a brand-new building. 12x that is $648,000. To buy an equivalent apartment today would cost me minimum $1.2 million. That is simply a fact.

It's not even close, especially since, as has been published, rents are now falling.

So, please tell me where I have "distorted information and provided only half a story in order to make their biased opinions look good." These seem like real numbers to me.

Geee - hundreds of more posts by Steve and MMAfia and not one that can tell you how to actually make money in RE. How is someone who cannot tell you how to make money in RE qualified to tell you how not to make money in RE?

LICComment- "I hate to break this to you, but no one here is taking you seriously"

And here in lies the problem. The truth is always painful. I was right about one thing, you can't answer a simple question. Manhattan RE. never falls and LIC is a lock because it has a view of the city. WOW that's worth the extra $200,000. Give me a break. This whole market is on the verge of a major correction. Keep telling people to buy.

So, DCO how do you recommend people make money? If you had a 25 yea old child, what would you tell him/her? To be afraid? To not take chances? To always be on the safe side? To learn typing because one will always have a job if they can type....

You need to revisit Ayn Rand and get some imagination and nerve.

petrfitz, we're not talking about investment real estate. We're talking about owner-occupied real estate. Two entirely different animals.

Steve you cant tell us how to make money on owner occupied real estate either. How are you qualified to tell us how we cannot make money on owner occupied real estate if you cannot tell us how to make money on owner occupied real estate?

Owner occupied real estate often leads to investment real estate. They are different animals but closely related. My primary residence launched my initial investment properties.

"How are you qualified to tell us how we cannot make money on owner occupied real estate if you cannot tell us how to make money on owner occupied real estate?"

What?

Steve - all you do is naysay and offer no value to the readers who want to buy real estate.

Admit that all you do on these boards is to discourage people from buying, and you offer no value to someone who is interested in purchasing.

You are a bully who offers a one sided opinion. You offer no value to someone who is currently in the market to buy.

Give it up perfitz. Everyone knows that you are a liar and nothing you say here is true. First you have "tens of millions of dollars" and then you say you have $11 million.

alpine - i said that i have made tens of millions and am worth over$11 million

do you know the difference between making money and net worth?

and yet you waste your time posting here. Don't you have a place in the Hamptons?

no i do not

petrfitz, somebody has to provide an alternative point of view to the standard broker bullying ("buy or die"). Steve and dco are the minority wing in this parliament of ideas.

What's the view like from your Jersey City apartment?

petrfitz has a place in Las Vegas. Last place on the left past all the "foreclosed" signs.

actually the place just next to Celine Dion.

"Steve - all you do is naysay and offer no value to the readers who want to buy real estate."

That's entirely untrue, petrfitz. I will repeat what I always repeat: if it's cheaper to buy, then buy. If it's cheaper to rent, then rent. For the most part, it cost half as much to rent as to buy. Therefore, "readers who want to buy real estate," if they go forward and overpay, will be suffering considerably in the future.

Listen to yourself: "readers who want to buy real estate." It's not a question of what they "want" to do. I "want" to be able to fly, but that's not likely. I "want" to be an opera star, and that's even less likely. What I'm talking about is a business decision, which ye who tout your millions should be familiar with.

Would you buy a building with a rent-roll that doesn't cover your amortized expenses? No. Then why should someone buy a property that will cost them twice the rental cost, and get the same benefit back.

I'm not a "naysayer": if you can find a deal, jump on it. All I do is give people the historic formulas so they can make up their own minds. If, even after doing the calculations, "readers" ascertain that it's twice as expensive to buy as to rent, but they still "want" to do it, kewlness. I think it's foolhardy, but it's a free world.

Also, since you said you bought your place in this ritzy Las Vegas neighborhood on foreclosure, how is it that Celine Dion's neighbor was foreclosed upon?

And why if you are worth $11 million do you still work in television?

Your stories are not credible, mon frere.

1 - i am one of the owners of the company I work for

2 - i never said i bought on foreclosure - i didnt.

3 - you offer no advice. you bully and pass off your opinion as facts.

Steve - many people will make lots of money off RE this year and next. You will not be one of them.

I know I become little better than the fool when I even recognize Steve, but this bit of blatant obvious deceit must be pointed out:

stevejhx
17 minutes ago
I will repeat what I always repeat: if it's cheaper to buy, then buy. If it's cheaper to rent, then rent. For the most part, it cost half as much to rent as to buy. Therefore, "readers who want to buy real estate," if they go forward and overpay, will be suffering considerably in the future.

and remember this:
http://www.streeteasy.com/nyc/talk/discussion/3410-real-estate-is-a-bad-investment?comment_id=36307
No matter how you slice it, renting is ALWAYS financially more beneficial over time than owning.

That will be all from me for now.

If Steve was really as knowledible in RE as he claims, he would be able to cite several examples of owner occupied real estate that would be good deals. He can't. Ha can only claim that he is brilliant and EVERY deal out there now is a bad one.

"If Steve was really as knowledible in RE as he claims, he would be able to cite several examples of owner occupied real estate that would be good deals."

I cannot cite what does not exist.

"I know I become little better than the fool when I even recognize Steve, but this bit of blatant obvious deceit must be pointed out."

Pity poor vverain, who does not understand the difference between a capitalized expense and an investment. In some markets you can make money on investment real estate; owner-occupied real estate is not an investment. It has a real historic return of 0.7%.

That will be all from me for now - EXCEPT that vverain believes that real estate is not a leveraged investment even though 70% of all properties have mortgages on them.

That will be all from me for now - thank GOD!

So Steve are you willing to stand bye your statment and say that:

"Not one owner occupied real estate deal that takes place this year will be profitable?"

Steve, I've often looked at the fortune mag data and found it interesting. Any thoughts on why the 15-year average price/rent ratio is lower in New York than almost every other metro area in the United States except for Pittsburgh and Detroit?

Also I assume the NAR numbers are for New York metro, and not only Manhattan.

stevejhx, you have a LOT of opinions, some that seem to be in total conflict with each other (should we always rent, or rent opportunistically?), some on some technical things (capitalization??), some you must be completely joking about (I saw something about Orlando and Manhattan real estate being the same). But anyway, this is a online board, I don't know you vs. others although you are here the most, so what are your qualifications, credentials, etc. for us to listen to you vs. others (my favorites being anon3 and unnamed).
Thanks

"Not one owner occupied real estate deal that takes place this year will be profitable?"

Without a time horizon? Flipping? 30 years? 1000 years?

"Any thoughts on why the 15-year average price/rent ratio is lower in New York than almost every other metro area in the United States except for Pittsburgh and Detroit?"

Not a clue. Those are just the data.

I don't know which NAR numbers you're talking about specifically, but I don't think they break out a Manhattan statistic.

KillerLoop, my opinions are consistent. An investment is something you plan to make money on. Owner-occupied residential real estate should not be considered an investment under that scenario. Investment real estate - where somebody pays off your mortgage for you - is an investment (hence the name), but the only benefit you gain from owning your home is the right not to rent one, so therefore that is its fair market value.

Orlando and Manhattan have a lot more in common than you think: although for different reasons, property prices rose astronomically in a very short period of time, and people claimed that foreigners were going to swoop in to stop them from reverting to mean.

KillerLoop - the qualifications that make Steve the real estate genius and give him the credibilty to give advice to all:

1 - he owns a condo in Fire Island that is currently underwater.

2 - he rents an apartment in Manhattan

3 - he trades crap Brazilain equities.

4 - cannot identify 1 single deal in today's real estate market that will be profitable.

You really can't trust any number steve sets forth. He has quoted out-and-out wrong data at times, and he has posted data from one market and applied it to another, and he has quoted data out of context. He also continues his moronic assertion that when you calculate the benefit of the mortgage interest deduction, you should use your effective tax rate rather than your marginal rate. He has been shown to be so idiotically wrong on that point but he just can't admit it.

eah- "So, DCO how do you recommend people make money? If you had a 25 yea old child, what would you tell him/her"?

I would tell him/her the same thing I would tell anyone. NYC RE. is on the verge of a major correction and NOW is not the time to buy. I never said that it will never be a good time to buy. I also never said that you can't make money in RE. It's clear to me that this market is going to get crushed for several years. If you don't think so then by all means go ahead and buy all you want. I also think it is very possible to call a housing bottom and when I see it you'll be the first to know, until then I would be cash deep.

"If you had a 25 yea old child, what would you tell him/her"?

I would tell them in times of turmoil dont follow the crowd. When everyone is saying that the market is dead, then that is the time to be looking for deals. Try to find specific properties with location, detail, or personality and try to get them for a good price. When no one else is buying then you have less competition for properties and the most negotitation power.

The largest fortunes where made by individuals who didnt listen to the naysayers and found opportunity when no one else did.

petrfitz- Brilliant. OK. Would you buy today? Y or N?

I am buying. I am currently in the market for 2 brooklyn brownstones - timeframe 3 months to 3 years. In november I bought in Las Vegas.

I am also looking at buildings on UWS and UES toward the north end of the park in the not yet gentrified areas.

I also have an offer on another place on the Jersey shore.

"If you had a 25 year[sic] old child, what would you tell him/her"?

Find a rewarding and satisfying career, pursue it with zealous vigor. Don't worry about how other people lead their lives, especially those who claim to have found the key to happiness. Especially if it requires cash down payment.

petrfitz
actually the place just next to Celine Dion.

What a liar! I got news for you, Celine Dion does not have a place in Las Vegas. Tho she has a home just outside Las Vegas and it is NOT a condo in a high rise.

80sman - brilliant you are telling your kid to go work for someone else! Be a drone. Have someone else in control of your destiny because they always take care of you!

Well instead of spouting more nonsense, petrfitz & LICC, show me your math.

"1 - he owns a condo in Fire Island that is currently underwater."

First part true second not.

"2 - he rents an apartment in Manhattan."

True. At half what it would cost me to buy it.

"3 - he trades crap Brazilain equities."

False. I do not "trade."

"4 - cannot identify 1 single deal in today's real estate market that will be profitable."

Over what time frame and for what purpose is the purchase?

"He has quoted out-and-out wrong data at times."

When? And even if that were true, it's far better than your quoting no data.

"he has posted data from one market and applied it to another"

When, and why is that ipso facto incorrect?

"he has quoted data out of context"

When?

"his moronic assertion that when you calculate the benefit of the mortgage interest deduction, you should use your effective tax rate rather than your marginal rate."

"The third component is actually an offsetting benefit to owning, namely, the tax deductibility of mortgage interest and property taxes for filers who itemize on their federal income taxes. This can be estimated as the effective tax rate on income times the estimated mortgage and property tax
payments."

"strategy.sauder.ubc.ca/lee/comm407/Readings/Himmerberg,%20Mayer,%20Sinai%20(2004).pdf"

So guys, put up or shut up.

perfitz, you should change your name to "double down". You really love the ups and downs of the real estate, don't you? Well, more power to you. You're doing what you want to do. You sound like the one guy who manages to swim to shore while the rest of the people on the boat drown.

surdy - I know all that. She is on the lake and is my neighbor. Her helicopter used to shake my walls when she landed at night after her show.

Where did i ever say she lived in a high rise condo? I dont own any condos nor would i ever live in one.

Just another case of Surdy being misinformed. He is also the guy that thinks that Ellimen Onsite Brokers at the Stratus are Real Estate Professionals. Surdy on site brokers are the ones that are not good enough to be out on the market so Ellimen puts them in sales offices.

LAst time I checked Henderson/ Lake Las Vegas was not part of Las Vegas!

Look who is misinformed!

Surdy you are correct. Most people dont know that the lake is in Hendeson. But i dont think that referring to a place on Lake Las Vegas as a "place in Vegas" is all that misleading.

When was it that she used her Helicopter that got your walls shaking!

Is this about Celine Dion, or real estate?

Poor thing can't sing, but sure does have a great father / husband / manager.

I guess it's about Celine.

no Steve it is about questioning the purchases posters on this board have made and seeing if that person has the experience to give advice to others.

les see - 4 buildings in manhattan, estate in Vegas, house on Jersey shore vs. Condo on Fire Island and crappy Manhattan rental.

Petrfitz, what's your point? It's sort of like, "Who cares?" Even if all of that were true it would mean nothing, contributes nothing to the discussion. Like MMAfia says, "My dick's bigger than your dick."

Who cares?

Post some data that actually show something, Sneaky, instead of hurling insults and bragging. It's boring. Lots of people have made lots of money and lost it. Don't tell us "you can make money in this market" without showing us a specific example of how to do it, not just, "look to see if they're rezoning."

With all this posting you do, it's amazing you can run a real-estate empire AND a television company. I'm just a bored translator, which explains my free time.

BTW I wouldn't own an estate in Las Vegas if somebody paid me to take it from them.

perfitz before 2003 the only people I knew who weren't brokers and who made a living off NYC real estate were the people who inherited property. In 2003 the flippers came in and started making money buying and selling. Now in 2008 we're back to the renting out your units model. That model works a lot better when grandpa bought the building in 1951 and almost all of the rent is profit. Does it work so well when you have a mortgage, rising fuel costs and tax increases?

Steve - I listed 7 different ways you can make money in todays RE market. These were off the top of my head and took me about 30 seconds.

I dont profess to be the all knowing expert in RE - you do. I dont try to make everyone follow my beliefs.

The other difference between you and I are that I am actually in the real estate market, you are not. I can come up with ways to try to make money in RE and you do not.

I also recognize that in times of great turmoil, great amounts of money can be made. You do not.

"You do not."

:)

I checked this out because I thought it was racist.
Anyway, sill me.
Petrfitz seems to have a real estate track record whereas stevejhx seems to actually have some experience himself contrary to his own point of view. I mean, if you own on Fire Island, a pretty bad market, and you are also big into investments in Brazil, you are pretty much playing with fire. So I applaud you for taking risks but I'm confused why you tell everyone else not to take risks? At least petrfitz encourages people to do well whereas you seem to want other people to be a slave in rental buildings.

"Try to find specific properties with location, detail, or personality and try to get them for a good price." This is like Bob Lutz saying: "we need to start building cars that people want." Gee...what genius.

"I'm confused why you tell everyone else not to take risks?"

Who said that? I said know the risk and if it's a good one, take it.

"you seem to want other people to be a slave in rental buildings."

As opposed to being a slave to your mortgage banker?

"Your a quack and now everyone knows it."

dco, a quack? Here are the two definitions I found for quack.

1) The characteristic sound uttered by a duck.

2) An unqualified person who claims medical knowledge

Now, I'm pretty sure I don't sound like a duck and that I have never dispensed medical advice on this board (except for recommending that steve take his meds on occasion) so, I'm not sure I follow you. Maybe you heard the term used in health class or while watching Saved By The Bell this afternoon while enjoying your cookies and milk. Regardless, if you are going to try to insult someone, you should probably understand the meaning of the word first. Ask mom if you can log on to the internet next time and look it up (maybe she’ll also let you log on to ToysRUs.com and buy those killer Mighty Mouse pajamas you have been bugging her about.)

JuiceMan- It pains me to believe that you have never heard the word "quack" used to describe you. That was the best you could do, give me the Webster definition. WOW- I'm going to guess you don't get out much. Next time you host an open house and ask someone what it means. Oh wait, given that the market is in the toilet and not even the brokers are showing up to open houses perhaps you should ask the bum on the corner of your block. It's a good chance he may be an out of work Banker or Broker.

Wow, not only is dco bitter that he can't afford current market prices in the most desirable neighborhoods, he is clearly jealous of bankers and brokers.
As long as steve keeps sticking to his dumb stance regarding marginal and effective tax rates,which he knows is wrong and won't admit it, he will continue to have ZERO credibility.

LICComment- You mistake jealousy with sarcasm. Its got nothing to do with not being able to afford current market price and everything to do with current market price being grossly exaggerated in artificial market perpetrated by greedy bankers and brokers that would sell their own family something they can't really afford just to make the sale.

However you are right I couldn't afford to live in some areas and that's a fact not an insult.

Come to think of it, I couldn't afford to live in certain areas even with a 50% correction.

Dow 11,000. Who would have ever thought it?

dco, how can you afford anything on a $10 allowance?

JM- That was beneath you.

here's an idea for how to make money in this R/E market, steve -- sell the Fire Island coop
better yet, sell it last year
vacation properties are more vulnerable to downturns
get some cash and take advantage of falling prices in Chelsea
furthermore, "under water" may have more meaning than one for Fire Island real estate ... a matter of time -- not only rising ocean levels, erosion, but high winds

I actually think it's great that people speak up about the real estate market peaking out, while it's peaking out and before, but to follow your contrarian instincts, you need to be able to not get bogged down in the groupthink of the downturns too. Dow 11,000? Buy stocks.

In support of Steve's constant reminder of comparing rent cost to buy cost, in the '80s boom a mortgage broker and real estate broker both said to me that if your gross (not net after-tax; gross) out of pocket carrying costs after 20% downpayment and closing costs for a coop/condo were the same as the current market rent, then it is an absolute no-brainer -- pays to buy and is stupid not to.

But the tax benefit moves, the comparable rent moves (right now they're going down, over the long haul they go up much more than they ever go down), the interest rates move, etc.

I thought it would be stupid to pay $4,000 in carrying costs for a one-bedroom coop in Manhattan back in 2002. Within a few years, $4,000 didn't look so high to me. Then you subtract out the tax savings, etc. By 2007 $4,000 was not so unusual for a one-bed rental. Now it's too high.

Nobody seems to be looking at long-term horizons. Live in an apartment for 20 years and all of this stuff changes.

And when the market hits bottom, the crowd will all say, don't buy, it's the end of the world, our financial system is collapsing.

Look back on the 1987 stock market crash, the S&L crisis, etc., and our present mess is no worse.

lowry: "Look back on the 1987 stock market crash, the S&L crisis, etc., and our present mess is no worse."

I disagree. Back in the 80's Wall Street derivatives traders (87 crash) and residential bankers (S&L) worked for different companies. Today, they work for the same company (JPMChase, Citigroup).

"Nobody seems to be looking at long-term horizons. Live in an apartment for 20 years and all of this stuff changes." - Tell that to someone with a 5 or 7 year ARM issued 2003-2006. The reset is going to be hideous. The Fed has two fires (bank insolvency and inflation) and one hose. Expect rate increases within 6 months to 1 year.