NYC Rents are UP this summer

Who is this group that is "the bulls?"

Are they people who disagree with Eddie??

Isn't that a name for a 6th grader?

Steve,

Wasn't going to post anymore, but just can't help myself. You wanted to know how I can get a "steal" if I am cash-flow negative.

As per another one of your other posts, you are a home-owner, right? I assume you own in Manhattan? I would ask you for the details of the property (CC, RE taxes, rent...) but I can't expect you to post them in a public forum. So it makes my example difficult. But let me ask you this...

Would you sell me your place at a price that makes me $100/month cash-flow negative in the first month, given your last month's CC, RE tax and rent? Think about it, you would totally be ripping me off. I am buying right before the prices plummet. With the economy so terrible, I will be lucky if 2 years from now I can even get a tennant in there, let alone charge rent of half of what you are charging now, and my CC will be going up every year forever and ever. And to make up for the budget deficit, the city will jack up my RE taxes to ungodly levels. You should be thanking me for getting you rid of such a money pit. And lest we forget the opportunity cost of all the money you have in that hole, money you will NEVER see again if you don't take me up on my offer and sell immidiately.

I don't care where in Manhattan it is, what kind of property, how much you charge for rent... As long as your price makes me exactly $100/month cash-flow negative in the first month, I am a buyer. You in?

"Would you sell me your place at a price that makes me $100/month cash-flow negative in the first month, given your last month's CC, RE tax and rent?"

If I were selling, I wouldn't care about your profit or loss.

I rent in Manhattan, and it costs me precisely 1/2 what it would cost me to buy a similar unit.

"You should be thanking me for getting you rid of such a money pit."

If I bought more than 5 years ago, it wouldn't be a "money pit." Only people who bought at the overly inflated prices of the past 5 years will get burned.

You are in denial. Why would you hold on to an asset that will be losing value for the next few years. I will get raped by buying with a negative cash flow and right before a 30% decline of the market, rentals going down, quality of life going down, terrible economy. Therefore it must be a good deal for you, right? I don't care about your profit and loss either. For all I care, you bought it for 100k and selling it to me for 400k. It makes no difference to me. So, why wouldn't you sell it at that price?

"You are in denial."

Absolutely not?

"Why would you hold on to an asset that will be losing value for the next few years."

Because owner-occupied real estate is not an investment; it is a capitalized expense. If I sell the property I still need somewhere to live. If I purchased 5 years ago it is likely that I will lose money on paper, but not actual money, but if I'm happy where I am and can afford it, there is no reason to sell.

"I will get raped by buying with a negative cash flow and right before a 30% decline of the market, rentals going down, quality of life going down, terrible economy. Therefore it must be a good deal for you, right?"

Why would what happens to you in this fictional transaction be remotely of interest to me? That's like the argument that people price their properties "for what they need to get out of them." Properties are priced where the market says they are, not for what people need to get out of them, or for some sadomasochist fantasy you have that I would somehow get a rise out of this transaction.

You're weird.

I'm renting and would prefer to own. I want my own place in Manhattan and I'm tired of having my Landlord increase rent 5 to 10% a year. Moving from one apt to the next sucks. Having to deal with their crappy old appliances, Kitchen cabinets and cheap fixtures and molding also sucks. Sending out a rental check every month as opposed to building equity and getting tax deductions sucks as well. Getting frustrated at going to open houses and viewing these over priced apts equally sucks.
But reading stevejhx posts on rents dropping when there not (at least in my neighborhood) sucks the most!

steve, you make no sense. Why wouldn't you sell the property, rent for a few years, and then buy back in after the massive crash that you are certain will happen? You have no logical consistency with your statements.

houser, I was listening to a JP Morgan economist interviewed on Bloomberg this morning about the Case-Shiller numbers. He basically said that the NY area won't see such a big downturn as other parts of the country because during the past 5 years when real estate values have gone up, the Case-Shiller numbers for NY never got as extreme as in Florida, California and other parts of the country. This contradicts steve and is consistent with the data that has been out there, and shows how steve misapplies Case-Shiller and provides misleading, out-of-context information all the time to support his bitter desire for a NYC real estate crash. Of course, maybe the JP Morgan economist doesn't know anything and they should fire him and hire steve.

Thank you for proving my point. I just gave you an example of buying today with negative cash flow and ever-increasing costs.

And this is exactly why prices will never go down the 30-50% you guys dream about.

"I want my own place in Manhattan and I'm tired of having my Landlord increase rent 5 to 10% a year."

You're in luck - they don't because they can't. They can't increase rents more than incomes.

"Moving from one apt to the next sucks."

I've been happily ensconced for years.

"Having to deal with their crappy old appliances, Kitchen cabinets and cheap fixtures and molding also sucks."

I have brand new stainless steel appliances and granite countertops.

"Sending out a rental check every month as opposed to building equity and getting tax deductions sucks as well."

That tired old argument again? How do you build equity when prices fall?

"Getting frustrated at going to open houses and viewing these over priced apts equally sucks."

Haven't been to one in years.

"But reading stevejhx posts on rents dropping when there not (at least in my neighborhood) sucks the most!"

You and I both posted the figures. For half the city (including prime neighborhoods) prices did in fact fall. For the remainder, YOY, they did not increase faster than inflation or faster than regulated rents. Ergo, they are falling nominally or inflation-adjusted throughout the city.

"steve, you make no sense."

Because you don't understand.

"Why wouldn't you sell the property, rent for a few years, and then buy back in after the massive crash that you are certain will happen?"

That is a possible course of action, just not a necessary one. Let's say I bought 4 years ago, sell today, and prices fall to the level of 5 years ago. With taxes, rent, and transaction charges, I will be far behind where I would be if I were just to sit tight. Why take an unnecessary risk?

If I bought more recently than 5 years ago I may in fact make a profit, but it is far from assured since no one can accurately predict the exact time to buy or sell, especially an illiquid asset.

"You have no logical consistency with your statements."

You mean "there is no logical consistency to your statements"? There certainly is. I never advocated selling, renting, and buying back. Ever.

Steve,

"Because owner-occupied real estate is not an investment; it is a capitalized expense."

Wait, I thought you didn't live there... How is that owner-occupied? How is it not an investment? Also, why in the world would you live there in the foreseeable future? Your rent will go down next year, and will be even less the year after that. And the year after that... Slowing economy, remember?

"I've been happily ensconced for years."

Wow, you really took the owner of your rental for a ride there... I bet he is pissed that he has owned the unit for the last 5-8 years. He must be so under-water on it, it's not even funny.

"Haven't been to one [open house] in years."

But you post non-stop on a real-estate "blog" and know what you are talking about?

"Wait, I thought you didn't live there... How is that owner-occupied?"

The property I own is a vacation property on Fire Island. I live there from mid-April to mid-September every year, 4 to 5 days a week.

"How is it not an investment?"

It's not an "investment." It's a place to enjoy myself, and that's what I use it for.

"Also, why in the world would you live there in the foreseeable future? Your rent will go down next year, and will be even less the year after that."

My rent for the past 2 years has gone up modestly more than stabilized rent. This year it won't change.

"Haven't been to one [open house] in years. But you post non-stop on a real-estate "blog" and know what you are talking about?"

Since when is snooping around other people's property a requirement to comment on the economics of real estate?

Hasn't the owner of your rental heard about the Wall Street lay-offs and the 8.5B write-down MER took last night? I think you should ask for a 15% decrease in rent... Considering the quality of life in your neighborhood will take a significant hit and all...

As far as voicing an opinion, of course everyone should be welcome to. However, as someone famously said, opinions are like a-holes: everybody's got one. It's nothing personal, I just think it's funny how seriously you take yourself and how sure you are of your predictions considering that you haven't been involved in a real estate transaction of any kind "in years." Oh, and I don't say that just because I disagree with your opinions... I would say the same thing about someone whose "predictions" were similar to mine.

"I want my own place in Manhattan and I'm tired of having my Landlord increase rent 5 to 10% a year."

You're in luck - they don't because they can't. They can't increase rents more than incomes."

Guess what they have increased my rents for 2008

"Moving from one apt to the next sucks."

I've been happily ensconced for years.

Well that's because your a schmuck

"Having to deal with their crappy old appliances, Kitchen cabinets and cheap fixtures and molding also sucks."

I have brand new stainless steel appliances and granite countertops.

Yeah but I prefer to have to chose my own and not have to live with the landlords decor.

"Sending out a rental check every month as opposed to building equity and getting tax deductions sucks as well."

That tired old argument again? How do you build equity when prices fall?

Well my apt that I'm renting has appreciated for the past 8 years. Oh yeah I forgot you say they will go down this year well guess whta again it hasn't.

"Getting frustrated at going to open houses and viewing these over priced apts equally sucks."

Haven't been to one in years.

That's why you know very little about the RE market in certain Manhattan neigborhoods.

"I want my own place in Manhattan and I'm tired of having my Landlord increase rent 5 to 10% a year."

You're in luck - they don't because they can't. They can't increase rents more than incomes."--Stevejhx

Guess what they have increased my rents for 2008--

"Moving from one apt to the next sucks.

I've been happily ensconced for years.stevjhx

Well that's because your a schmuck-

"Having to deal with their crappy old appliances, Kitchen cabinets and cheap fixtures and molding also sucks."

I have brand new stainless steel appliances and granite countertops. -stevejhx

Yeah but I prefer to have to chose my own and not have to live with the landlords decor.--

"Sending out a rental check every month as opposed to building equity and getting tax deductions sucks as well."-

That tired old argument again? How do you build equity when prices fall?--stevejhx

Well my apt that I'm renting has appreciated for the past 8 years. Oh yeah I forgot you say they will go down this year well guess what again it hasn't.

"Getting frustrated at going to open houses and viewing these over priced apts equally sucks."

Haven't been to one in years.--stevejhx

That's why you know very little about the RE market in certain Manhattan neigborhoods.

"considering that you haven't been involved in a real estate transaction of any kind in years."

Is going to an open house a "real estate transaction"?

I did, in fact, buy an apartment just over 3 years ago.

Sold one in Miami the day before Hurricane Rita, and sold another one in Miami 9 months before that.

"Yeah but I prefer to have to chose my own and not have to live with the landlords decor."

So do most people - the question is, at what price?

"Well my apt that I'm renting has appreciated for the past 8 years."

And you probably won't lose all that appreciation, just half.

"Oh yeah I forgot you say they will go down this year well guess what again it hasn't."

Actually, there have been ample posts about declining asking prices and actual sales data that show a return to 2006 prices, lower when the transaction costs are added in.

You don't know what your property is worth until you try to sell it.

"That's why you know very little about the RE market in certain Manhattan neigborhoods."

You are correct - I know very little about certain Manhattan neighbors.

"You don't know what your property is worth until you try to sell it."

That's exactly my point. You haven't really tried to buy or sell anything in Manhattan, you haven't tried to rent out anything... How can you possibly know how weak or strong the market is now compared to 3 months ago or 2006 or 2004.

Try putting is some bids that are 40-50% below the asking price, even on the most ridiculously priced places and let me know how hard you get laughed at. Just don't tell the seller that he is "in denial", please... He might just laugh so hard, he might rupture something...

stevejhx has made up his own questions and has creatively misquoted other posts just so he can entertain himself with his silly responses. What a freaking jerk

"You haven't really tried to buy or sell anything in Manhattan, you haven't tried to rent out anything... How can you possibly know how weak or strong the market is now compared to 3 months ago or 2006 or 2004."

Because I did look to buy in Manhattan in 2004 and saw many properties which I thought were way overpriced even then (and they've gone up since), and they were holding open-outcry auctions of interested buyers and there were lines around the block for open houses, and I said no - this is a feeding frenzy, so I bought elsewhere where prices hadn't gone up a lot.

I am very familiar with the rental market because I have lived in a rental since then - nybits.com posts the prices of market rental buildings, which I have been inside of.

So you're wrong.

"Try putting is some bids that are 40-50% below the asking price, even on the most ridiculously priced places and let me know how hard you get laughed at."

They can laugh all they want, just like they laughed in every other market where prices soared astronomically and are now collapsing. Inventory will continue to rise, it's virtually impossible to get a nonconforming mortgage and interest rates on conforming jumbos hover around 8%, Wall Street is in meltdown mode (or did you miss that?) which constitutes 30% of Manhattan buyers who are no longer getting bonuses or if they get them they will be paid in restricted stock that doesn't vest for years, banks are counting only 30% of bonus income as income in any case and bonuses represent 80% of what bankers make.

So all in all, there is absolutely no reason to think that these current prices will stick.

"has creatively misquoted other posts"

Where?

"What a freaking jerk"

Dude - sticks and stones.

"houser, I was listening to a JP Morgan economist interviewed on Bloomberg this morning about the Case-Shiller numbers. He basically said that the NY area won't see such a big downturn as other parts of the country because during the past 5 years when real estate values have gone up, the Case-Shiller numbers for NY never got as extreme as in Florida, California and other parts of the country."

Amusing how LIC will use Case-Shiller when it works for him, but ignore it otherwise. As LIC himself has pointed at, it gets the entire metro. And outside Manhattan did not go up as much as Manhattan, true. So, the blend will not fall as much. Of course, Manhattan did, and following the logic, it will fall more than Case-Shiller (which is already approaching 10%)

"shows how steve misapplies Case-Shiller and provides misleading, out-of-context information "

Yeah, cause its STEVE doing that.

LOL.

If Case-Shiller is not an appropriate measure of the Manhattan market, then why does steve keep using it to support his argument that Manhattan real estate will crash? And why does Eddie keep repeating whatever steve says? Classic case of the blind leading the blind.

Who said its not an appropriate measure?

> Classic case of the blind leading the blind.

As opposed to the idiot leading his imaginary friends?

> "Try putting is some bids that are 40-50% below the asking price, even on the most ridiculously
> priced places and let me know how hard you get laughed at."
> They can laugh all they want, just like they laughed in every other market where prices soared
> astronomically and are now collapsing

I can introduce you to a lot of schmucks who also laughed when they were told that their pets.com stock wasn't worth what it had been priced at in the Internet bubble.

Hell, its not officially a crasy unless you have a bunch of idiots laughing at the top of the bubble, and cleaning my floors at the end...

So now the RE market is analogous to a internet stock 9 years ago? I mean, I get what you are trying to say, but it doesn't make it less ridiculous a statement/comparison. The differnces between the two are so many and so obvious and so vast that it would be pointless to discuss them if you can't see them for yourself...

I have owned 2 properties in Manhattan since November of 2001 and continue to own them. Looking to buy more in the coming months. They are not for sale, but, yes, I will laugh at you if you offer me 40-50% of their curent market price. And if you think that I will be cleaning your floors in 2 years, don't hold your breath...

> So now the RE market is analogous to a internet stock 9 years ago? I mean, I get
> what you are trying to say, but it doesn't make it less ridiculous a statement/comparison.

First off, if you're going to be a douche, be correct.

Second, no, I'm not comparing the markets, I'm comparing the response of PEOPLE to markets (and particularly market crashes). Someone laughing at someone else is not a sign of them being right, and in market crashes an early laugh is usually the sign of an idiot. Generally the biggest idiots are those who think that their particular time is the one time in the history of the world where market cycles simply didn't exist.

"If Case-Shiller is not an appropriate measure of the Manhattan market, then why does steve keep using it to support his argument that Manhattan real estate will crash?"

I was waiting for this, and since spunky has retired, it had to be from you.

Case-Shiller does not include significant data from Manhattan. However, you CAN compare what happened to Manhattan property prices - increase of 114% since 2002 - to what happened in, say Miami - increase of 114% from 2002 through 2007 - and predict what will happen in Manhattan.

"So now the RE market is analogous to a internet stock 9 years ago?"

Absolutely. Lay one chart over the other, get back to me.

Remember the "New Economy"? How p/e ratios could be infinite because there was no e, yet people kept on buying? Until they realized there was no "New Economy."

Well, now we're seeing property prices increasing at 20% per year for 5 years. Inventory is up, credit is dead, Wall Street is in tatters (and it's not over yet), and you expect prices to stay where they are?

What is that: the New Real-Estate Economy.

The only difference is that stocks are liquid and so more volatile. This will be a painful correction.

"Looking to buy more in the coming months."

G-d bless.

"I will laugh at you if you offer me 40-50% of their curent market price."

Laugh away. Then tell me what happened between 1988 and 1998.

"And if you think that I will be cleaning your floors in 2 years, don't hold your breath..."

I think you won't be able to cover your costs in 2 years, not even close, if you're planning to rent them out.

hahahahahahahahahahahahaha. ok, it's been a slow day, so i definitely posted more than I intended to. Yet this really is a waste of my time.

You, Steve, have not the slightest clue how to make money in real estate. For all the data you have gone through, for all the time you have spent researching, for how volatile and ripe with opportunity the NYC real estate market has been, your best idea this decade has been to buy In Fire Island and rent in Manhattan. Just saying that leaves me speachless.

I can't help but respond to you when you don't make sense or contradict myself, but it's a lost cause and a waste of time. So, ignore button it is... Good luck to you and don't forget to take full advantage of the crash next year.

I can see why Eddie couldn't hack it in Wall Street, beside his lack of skills - he can't handle when someone smarter than him points out his mistakes.

steve, how can you assume Miami and NYC will react the same way based on comparing only percentage price increases? Maybe the NYC increases were justified based on demand, whereas the Miami increases were not. Can you ever make a valid, complete argument?

"You, Steve, have not the slightest clue how to make money in real estate."

Actually, I've made in the 7 figures, but it wasn't my intention."

"For all the data you have gone through, for all the time you have spent researching, for how volatile and ripe with opportunity the NYC real estate market has been, your best idea this decade has been to buy In Fire Island and rent in Manhattan."

Made money there, too, but I NEVER looked at it as an "investment." It was and is a luxury.

"Just saying that leaves me speachless."

Thankfully.

"steve, how can you assume Miami and NYC will react the same way based on comparing only percentage price increases?"

Because over 350 years, owner-occupied residential real estate has always behaved the same way, and today is not different. Price is a function of incomes & leverage - always has been, always will be.

"Maybe the NYC increases were justified based on demand, whereas the Miami increases were not."

Impossible, oh grand Queens College economist. The prices in Miami HAD to have been based on demand. Else how could they have risen?

"Can you ever make a valid, complete argument?"

I did. I'm waiting for yours.

steve, the fact that you think supply has zero effect on price just shows how obtuse you are.

"I can see why Eddie couldn't hack it in Wall Street, beside his lack of skills - he can't handle when someone smarter than him points out his mistakes."

Om my lord, ROTFL. This schmuck is back again? LIC, when you finish 3rd grade and/or have an actual fact or statistic at your disposal, come talk to me.

Until then, you can call yourself smarter all you want, and pretend you made all these great points, but we have your words out there right in the open, that all say you're an idiot who can post nothing but insults.

Don't you have ANYTHING better to do with your life than to try and insult other people to make your worthless existence feel a little better?

> Can you ever make a valid, complete argument?

Oh jesus... why is it that the biggest idiots are always the biggest complainers about how *other* people don't have it right?

Not to mention, he's also the putz who couldn't afford Manhattan, yet thinks that somehow gives him the status to talk down to those who can. Couldn't get a wall street job either, but won't stop trying to put Wall Street down. Love it! Its always the biggest idiots who complain about the intelligence of others...

> "Can you ever make a valid, complete argument?"
> I did. I'm waiting for yours.

Right on. I've seen probably 100 posts from the putz, and not one even half-brained argument.

And, of course, after your post, all he comes back with is yet another insult. I'd say he's the kid who got beat up all the time in 3rd grade, but he's probably there now.

"Made money there, too, but I NEVER looked at it as an "investment." It was and is a luxury."

stevejhx, I think you've said time and again that that would be a "paper gain," so it's not really "making money" until you sell (and have a net gain), no?

"the fact that you think supply has zero effect on price just shows how obtuse you are."

I never said that. What I said was that the fact that there is limited land in Manhattan (what you call "supply") does not affect the price of real estate here in the long-term.

Completely different.

"I think you've said time and again that that would be a "paper gain," so it's not really "making money" until you sell (and have a net gain), no?"

I don't actually know what you mean, but I would draw a clear line of difference between investing in owner-occupied real estate and expecting it to rise in value like other asset classes, and the fact that real estate does oscillate in value over the long-term.

Owner-occupied real estate can't rise in value more than incomes and leverage allow it to. Other asset classes such as stocks can and do rise faster than incomes and leverage, because they take advantage of increases in productivity, innovation, and economies of scale, among other things.

"I would draw a clear line of difference between investing in owner-occupied real estate and expecting it to rise in value like other asset classes, and the fact that real estate does oscillate in value over the long-term."

Completely agree, but that's not what I'm talking about - if I understand correctly, you're saying you've "made money" on property you haven't sold, and probably aren't intending to sell, no? I'm not sure I see that as "making money."

steve, you just said: "Price is a function of incomes & leverage - always has been, always will be."

Where did you say that supply is a factor? You backpedal a lot, but this one is more blatant than usual.