Market Firming up threat 2020 version

I'm curious what people think of the Coronavirus and possible global turndown? If stock market takes a dump (I know it's up currently) what is the outlook for NYC real estate? Does it generally take a similar turn, or do investors flock to a "safe haven" and buoy prices?

I think we have to differentiate investors from primary users. I invest my money in stocks, cash in a Marcus account etc.

I purchased a home to live in and a place my family will enjoy and be safe in. It represents a relatively small portion of my net worth. I'm not watching the market (zestimate) on a weekly basis. I'm living here, enjoying it and making very good macchiatos in my new Gaggia fully automatic coffee machine ;)

I personally would not purchase a home if I did not think I would stay there at least 7 years, ideally 10.

Keith Burkhardt
TBG

That's not an answer to the question – that's just standard homebuyer advice. I'm not disagreeing with the advice, but that was not the question I posed.

Ovid: no one knows.

When it comes to asset prices, event based predictions are very hard beyond the asset directly impacted - as in Chinese stock market with Coronavirus. There are too many other factors.

So far 10,000 people have died from the flu in the United States. I'm trying to understand how the coronavirus is more of a threat than the flu that's currently going around the United States.

Keith

ovid, yesterday's news says china is also injecting excess cash into the system like the US, so after a minor discount, it is more likely to see a global turn-up

I think the concern is that so far, based on a relatively small sample size, this coronavirus appears to be about 44 times more deadly than the current flu virus (2.2% fatal vs 0.05% fatal). This is still significantly lower than SARS which was up around 10%.
The second factor is how contagious the virus is. The estimates on that appear to be all over the map.

Keith, It is the panic aspect as it is highly contagious vs flu and it can kill perfectly healthy people. Chinese govt shutdown businesses for a week. With what the current situation looks like, you can remove say 1 week of Chinese GDP. So Chinese GDP growth instead of being 5-6 percent will be 3-4 percent range. Panic has multiplier effect. Which is what you are seeing in Chinese stock market.

The flu definitely can kill healthy people, look at what the Spanish flu did in the 30's. I'm certainly not trying to play it down, I'm just more focused on the actual science than the headlines.

In the end I think SARS killed less than 800 people. Certainly devastating for the families that were affected, but not a significant number.

Most of the flu related deaths are in 65 and over. But Coronavirus deaths can be be very healthy people otherwise. Hence the reason for panic. I am not saying it is justified by the numbers but most panics are irrational in the extent of panic.

The Spanish Flu killed 20 million people. It wasn't "the flu", it was "the Spanish Flu" and that is exactly the kind of thing peopel are worried about with Coronavirus.. more lik 1-2 million (if it spread like Spanish Flu, I'm not saying it will)

"Spanish flu" simply a misnomer, and it was indeed a flu, H1N1 virus. Not of coronavirus. The Flu kills approximately 100,000 people a year. SARS killed about 800, Mers has killed about 800 people.

Get your flu vaccine.

The current flu vaccine is no good for coronavirus.

Yeah, that's why China has locked down 30 million people and the whole world is banning 1/7th of it's population from travelilng, because it's just like the Flu!

I'm not saying it will necessarily be terrible, but the comparisons to the Flu are ridiculous. Wuhan is not experiencng something like the Flu.

There was no vaccine for Spanish Flu at the time, and there's no vaccine for Coronavirus.

yes, get your flu vaccine -- this is good advice!

Here's a good comparison of the two viruses:

https://www.ynhhs.org/patient-care/urgent-care/flu-or-coronavirus

300 is wrong, most Coronavirus deaths are old people. There is only one death under 40 so far, who had complicate condition even before he got the virus

@stache understood flu vaccine does not work for this. It would appear the main reason governments are taking such drastic action, the fear of the unknown. We know for all intents and purposes that influenza comes in the fall and pretty much ends in March.

We don't know how this recent coronavirus will travel through the world, whether it will have a seasonal cycle etc. However I'm not going to buy into the panic that the media tries to stir up. They did the same thing with bird flu, SARS, MERS. I'll let the scientists do their work.

If it kills enough buyers and/or sellers then prices might be affected, although I would question the materiality of that price change, given all the other variables that affect prices. I think it depends on the transience of the virus' effects: How much did home prices fall because of SARS, and how sustained was the effect?

More interestingly, it may have a longer term effect on home design, given the increase in the number of people working from home in order to reduce exposure. (see, for example: https://www.bloomberg.com/news/articles/2020-02-02/coronavirus-forces-world-s-largest-work-from-home-experiment) This is real: I have 2 staff in HK who are WFH the rest of this week.

Will this drive up demand for 'real' 1 BRs over studios or 'work areas', since people who are stuck inside all day will want a different set of 4 walls to look at that their studio doesn't provide? Will it reduce the demand for shared building facilities (all those kids play rooms, gyms, steam rooms, movie theatres)?

In general, working from home or working in evenings from home is becoming more common. That means many people are looking a spare bedroom to use as office cum occasional guest room if they can afford it. That is exactly how we use our spare bedroom.

Aaron2,

How about the effect on all these new shared workspace environments from WeWork type spaces down to

spots which are like upscale coffee shops where you pay by the hour and don't even have a private desk.

Also, over the past 30 years there has been an enormous shift from what developers offer purchasers inside their own apartment vs what is in shares spaces ("Amenities") to the point that you can get just about anything you want, as long as it's not an extra square foot inside your apartment. IF people start discounting the value of all the amenities being offered (like the 100,000 square feet at 1 Manhattan Sq which includes an "Adult Greet House" and "Hamam with Cold Plunge Pool" among many others) in favor of private space, what can existing owners of those units offer buyers to induce them other than price reductions?

Sorry, didn't see bizarre auto correct of "Adult Tree House" to "Adult Greet House" before I hit reply.

300,
Aren't you an excellent example of someone who chose maximizing your own personal private space over what the building has to offer communally?

I do not want to pay for a doorman. So I am not typical. However, I would gladly pay for a common basic gym which is at least 750 sq ft for a 100 unit building. Common roof garden is also very desirable by many but I do not care I like to go outside for a walk.

I do like big open living/dining/kitchen with high ceilings - the kind mostly available in old lofts or high-end new construction. So I am not the typical Manhattan apartment buyer.

It might slow down some foreign corrupt money flowing into the RE market, but it might also accelerate it, who knows..

Companies are also moving to 'hot desks', (a concept which the consulting firms have been doing for some time), whereby the employee has no permanent desk, just a temporarily assigned desk for the times they are actually in the office and not working from home. From a commercial real estate view, this looks like a WeWork (without the bizarre management ethos), and ultimately reduces the demand for office space in the city, but from a residential view can a) increase renters/buyers desire for that 2nd bedroom or flex area, b) increase demand in the buildings for shared work space (something to do with the Tree House and Hammam areas once they figure out that nobody uses them more than twice, or b) reduce demand to be in the city at all.

How many developers are including 'work area' in the shared amenities? (I'll assert that the mere existence of Adult Tree Houses indicates the triumph of marketing over practicality.)

Shared work area - resident’s lounge set up with desks will be pretty useful but some people will just hog the space vs say a gym where there is only so much one can work out.

145 East 48th St was the first condo I remember seeing where one of very few Amenities was a conference room/business center when we picked up a couple of units in there almost 30 years ago.

Although we didn't call them "hot desks" Arthur Andersen had a "bullpen" for consultants who weren't currently assigned to clients.

"but some people will just hog the space vs say a gym where there is only so much one can work out"

I see certain people at the gym .every. .single. .day. I'm there (3-4x/wk): they're on the same treadmill or stair machine, and it's clear they've been there for a while before I got there, and they're still there when I leave an hour later. Fine: You paid for a membership and you're maximizing it. Glad you're doing something with your life other than sitting home fingering your phone. Or the 2 people who use the 6-person table on our roof deck *all the time* (at least every time I'm up there). Glad you get outdoors and get some sunshine.

I think it's more like shared laundry facilities: The washing or drying that was clearly finished an hour ago but has been left in the machine can be cleared out so that the next person can use it. A little knowledge and training in how shared resources are used (and for the slow learners, a couple times finding your stuff moved out of the way), and people will figure it out.

But if there is an outbreak in an east coast city, don't you think that would drive property values down? At least for apartments... who wants to live in close quarters with 40-400 other people during a contagion?

ovid, theoretically yes, but in reality the likelihood is extremely low. and don't forget we are in an undocumented QE right now

I don't know what QE means. I just signed a contract on a coop apartment (12-14 days ago) and now am very nervous, but AFAIK there's now way out without losing deposit. I hav no intention of backing out if that is the case, but if my contract signing were today, I probably would delay. :/

Also, the streeteasy interface for forums is crazy, is there no way to sort it so newest posts are on top? I have to scroll waaay down and press "more" every time I want to check this. What do y'all do?

This week's Open House Report from Fritz Frigan. The numbers better go back up this weekend so we can lay this off on it being Superbowl Weekend.
"Here are the numbers. Last weekend was the Super Bowl weekend, which means more open houses on Saturday and less on Sunday. The average attendance in NYC dropped almost 20%, from 5.23 the weekend prior to 4.20 per open house on the weekend of February 2nd. We received 255 replies last weekend.

24 open houses reported zero attendance, roughly 9.4%.

The most visited open house mention goes to Louise Phillips Forbes from Halstead. She reported 20 parties at her new exclusive at 545 West End Avenue. It is a 4BR for $3,325M – nice to see some strong attendance in the “cursed” $3M+ price range.

There were 5,240 open houses in NYC last weekend and roughly 5,825 prospective buyers were hopping from one to another. Here is the dataset. Let’s check what happened in each borough:

Manhattan – the average dropped to 3.79, from 4.90 the weekend before. This is the slowest so far this year. Central and West Village (5.10) above the average and so was Soho and Tribeca (9.25). UES surprisingly strong with 4.75 and UWS surprisingly weak with 3.72. Midtown West was surprisingly strong with 4.33 and Midtown East typically weak with 2.09. Last year on February 3, 2019, the average stood at 4.41. We received 195 replies from Manhattan.

Brooklyn – the average was a strong 6.92 in Brooklyn, still a dip from the weekend earlier when we recorded 9.73. Bay Ridge (9.50), Windsor Terrace (9.33), Park Slope (7.75) and Bed Stuy (7.80), all above the average. Williamsburg relatively slow with 4.00. See the rest below and beware of small sample sizes. Last year on February 3rd, we recorded 4.68 for Brooklyn.

Bronx – the average jumped to 3.17 from 18 open houses reported. See details below.

Queens – the average dropped to 3.33 from just three open houses that arrived from Queens.

Staten Island – 0

Size – 4BRs came on top with 8.83 and so did Multi-Unit buildings (6.50) and Townhouses (5.13). 3BRs are also worth mentioning with 4.85. Slow with studios (3.03).

Price - $3M+ on top this week with 6.42. Even without that one record open house with 20 attendees, $3M+ would have been 5.18, still stronger than the rest. Slow in under $500K and $2M-$3M price ranges. See details below.

Condition – properties labeled “very good, minor work needed” were most visited (4.59).

First Open House – 214% more traffic at first open houses this week, than at the “stale” ones.

By Appointment Only – 51% more traffic and “normal” open houses than at those labeled “by appointment only”."

I am still seeing listings under $1.5M going into contract at a regular clip. Given due diligence phase, these contracts probably were January showings, but there is no doubt in my mind that something was in the air in our neighborhood and its vicinity in January. Closing prices still need to be seen, but a significant percentage of listings I have been following have gone into contract this winter after dismally little activity in the fall.

Just to play Devil's Advocate, wouldn't that also be a potential indication that "seasonality" has shifted back to that beginning of year spike followed by a gradual trail off for the rest of the year?

Digs market pulse numbers continue to be better YOY so far. Let us see if YOY improvement continues as rents continue to be strong and mortgage rates are low.

@30yrs - Yes, I am crazy curious to see if the activity continues. Either way, it is wonderful to see all the listings move.

You won't believe this, but I'm hearing more and more agents tell me they have multiple offer situations they are dealing with for first time in years. Most are surprised themselves when telling me. Anecdotal I know, so let's see how things play out

A neighbor I always see when we are each walking our dogs high-fived me as she shared that she accepted an offer yesterday. (She knew we had accepted an offer a few weeks ago). Neighbor further shared that her agent told her this is the busiest January she has had in the past few years.

Disclaimer: this is my opinion about the current market please don't extrapolate this to a market-wide report.

Absolutely this was the busiest craziest January I've experienced in 30 years. we're also finding a lot of listings we're making inquiries about responding with "we've accepted an offer or we just signed a contract" (this morning this was 327 West 11th Street).

As February has started we continue with this busy pace which has included a few accepted offers and signed contracts. At the end of the quarter let's see what the data tells us about the market.

Keith

ovid, QE means printing excess amount of money. looks like you were not in the US few years ago, so you didn't see the last melt up of RE market caused by QE1~3.

The biggest risk of your contract is the COOP itself, not any virus out there. Many experts on this board warned people about COOPs in the past, but they were booed by the agents

https://therealdeal.com/2020/02/10/sizing-up-manhattans-condo-crunch-following-a-decade-of-boom-and-bust/

"To put that in perspective: There is $5.7 billion in existing inventory on the market and $2.2 billion in contract, according to a 2019 new development condo report from Halstead Development Marketing, which counted $13 billion in sales that have closed since 2018. Those figures combined still fall short of $33 billion worth of inventory lurking in the shadows, according to Halstead."

“Although the 10 biggest Manhattan condo projects on the market have hundreds of empty units among them, Miller said condos priced below $5 million were faring well. Commentators often speak about the condo market as a monolith, he said, but sales below $5 million make up 96 percent of it. That portion, he said, “is moving sideways or rising.””

Actually the above is partially true as Streeteasy resales condo index is down 6-7 percent from the peak of 2015-16. Yearly decline was 3 percentish for the last data available.

That's the problem with a lot of these quotes: my guess is that to put a positive on things he was talking about volume not prices.

And only of new construction sales so as far ask I know SE index wouldn't apply because it only applies to same unit resales? Or am I thinking of something else?

Agree with 30 yrs (as I think everyone else does as well) that it is important to talk in terms of both price and volume. While I am seeing positive movement in terms of volume, the listing prices I am seeing (still don't know closing prices) are flat to 2014 such that transaction costs and any renovation costs will result in overall loss on the property to seller. So I think there is consensus among everyone that the market is not doing great right now in terms of sellers taking profits (unless you are like my neighbor who shared with me that she accepted an offer yesterday - she purchased in 1985, so her gain is so high that she is in for some capital gains tax even after whatever exemption is allowed on sale of primary residence). My advice to anyone I know who wants to buy in NY is always the same: If you want to buy, look at your housing cost as part consumption and part savings; if you end up getting lucky and making money, so much the better, but don't count on it.

30, Street East condo index is relevant as we know higher priced $ per sq ft properties are down more than average. Since new development in most cases is higher priced per square foot, under $5mm price Manhattan new developments are on an average certainly down more than the Resale index vs initial contract prices in say 2015.

MCR,
I think you get my point. And especially if it's coupled with a change in seasonality as we previously discussed. So IF we have a big burst in sales volume which is short lived and only serves to clear out some existing inventory, but doesn't result in a price bump, and that inventory is quickly replaced by stuff that had previously been on the market and didn't sell, then what happens as the year goes on as inventory increases and demand decreases?

Note in the numbers from January which we see multiple anecdotes here about being uber hot: whether you look at either market wide or only resales the number of new listings in January is more than double the number of signed contracts (1,579 vs 741 or 1,277 vs 622). Given that there are probably 20,000 units taken off the market over the past few years (4,694 per 6 month period) waiting to come back on, in addition to whatever amount would naturally come on the market, in addition to an estimated 9,000 units of new construction which will be on the market at some point in time, it's going to take a tremendous amount of demand to absorb that. And even if demand is increased from the past few years, IF it is overwhelmed by supply how do prices go back up without repealing the law of supply and demand?

@30yrs - further to your point, the new inventory in the tiny segment I am following is aspirationally (not sure that is a word) priced. Fascinating. I haven’t watched the market this closely since being a buyer in 2013; can’t wait to see what happens next. NY real estate is a great spectator sport and all the commentary on here is part of that fun.

Can you tell what percentage was on the market before (with the current owner) vs first time on the market (with this owner)?

Isn't it as straightforward as volume has gone up, but pricing is likely flat or down? If that wasn't the case, I'd imagine there would be quite the market buzz about it.

Just to throw my own anecdote in the ring: most of the units I've seen close were outliers vs. other units in the building with regards to pricing, so their sales will potentially put more pressure on other units, not less.

thoth,
I don't have statistics to back this up, but looking at the townhouse market almost all the sales I remember being talked about were because of how much of hit they took or how low the price was (with the notable exception of 64 East 7th St).

Example:
Over a year ago when they were asking $10,995,000 I suggested that "if they get an offer with an 8 in front of it they should take the money and run."

https://streeteasy.com/talk/discussion/44162-what-will-this-sell-for

Now 73 Washington Pl has been asking "something with an 8 in front of it" for over 3 months and it still hasn't moved.
https://streeteasy.com/building/73-washington-place-new_york#tab_building_detail=1

@30yrs - Good question; I will
pay attention to whether “new inventory” is new/re-listing of old inventory going forward. Too lazy to check now.

30, What is the number of off-market listings historically for resales? Digs number show that even at the boom time in 2015 there were appx 2000 off market listings in Manhattan and the market size is bigger now say by 10-20 percent.

73 Washington has a huge real estate tax issue once they convert from current class to a single Family. You are looking at $200k in taxes vs say $60-80k for comparable properties. Also the neighbor lawsuit you mentioned.

Slight uptick in Condo index MOM but down YOY 2.5 percent. Bottom twenty percent on fire as there is really not much new supply.
https://streeteasy.com/blog/january-2020-market-reports/

Sorry YOY down 2.8 percent despite MOM tick up of 0.3 percent. This is September/October contract data.

Looks like open house traffic took a negative turn again. Although a handful of listings in Brooklyn saw a ridiculous amount of traffic!

Unfortunately more people are not participating.

The numbers are in from last weekend, but it’s kind of disappointing that the number of surveys received is in steady decline. 258 is the most we received this year on January 26, and it is getting slower since. How do we get all agents to participate? How do we get big firms to share their open house data?

The average attendance in NYC last weekend dropped to 4.19, from 4.85 recorded the weekend before. This is a 13% drop, not insignificant. We received 239 replies to our survey. Last year on February 17, 2019, the average stood at 4.12. I think it is obvious that traffic at open houses this January and February is stronger practically every weekend, compared to 2019. An uptick in buyers’ interest?

31 open houses reported zero traffic, many of them “by appointment only”. Please report all your numbers. Often I receive a comment like “I had zero traffic, hence nothing to report.” No!! Zero is a number too! The more data we get, the more accurate the index will be. If you do not participate when you had zero traffic, the average is artificially too high. If you advertised your open house on StreetEasy and to co-brokers, you should report the number, even if it is a zero.

The record open house mention this time goes to three open houses! They all reported 40 parties attending: again this week on top were Judy Liebman and Dawn Silverstein of Corcoran (last week I did not mention Judy in my report, my apology) for their open house at 231 Park Place (which is in Prospect Heights, and not in Park Slope as I reported last weekend and one of you noticed). Also, on top, with 40 attendees came Sandra Dowling of Brooklyn Heights Real Estate, Inc. at her open house at 114 Clinton Street in Brooklyn Heights, as well as Greg Mire of Compass, who reported 40 attendees at his open house at 134 Boerum Place in Cobble Hill. Brooklyn was on fire last weekend, it seems!

See my comment from 13 days ago: this is (VERY slightly) lower than Super Bowl Weekend. A possible indicator we are just experiencing a "Bonus Bump" rather than a resurging Market.

Time will tell. We remain very busy in our little world.

Keith,
Would you be willing to concede that it's possible that what you are seeing is more a shift towards your business model than a general resurgence in the market? Especially given that I think it's hard to argue that Buyers aren't being much more cost conscious than a few years ago?

So Pending Sales up 29 percent in Resales Urbandigs is all Keith?

Like I said every time I comment about what we're experiencing in the market, take it with a grain of salt. however I will say our attorneys and bankers are all saying business has improved over the last few months. I'm also hearing a lot of"a contract out or we have an accepted offer" when we inquire about properties for clients.

Our business model doesn't create a market, but yes as a company we've been very blessed and successful. And I tell my clients the same thing, just because we're very busy, doesn't necessarily mean just sentiment in the market has shifted significantly. But we are seeing some improvements, will it hold or continue to improve? Time will tell.

I turned 56 this year, I know better than anyone markets don't just go up. In my opinion the real estate markets been weakening since the end of 2015. So it will find a bottom, stabilize and at some point begin moving up again. That is the nature of the beast as they say, anyone that can predict these cycles with some degree of accuracy will become very very wealthy.

As I've also said before, I was so bearish in 2006, 2007 I quit a firm where I made a decent living, to create a company offering discounted rental commissions as I thought it was not such a great time to buy. Also in the past I've had more of a bias towards being a renter, for a number of reasons. However my opinion about that has changed, especially since now I own a few pieces of real estate. I think owning your primary home is not only a good financial idea but can provide a great degree of emotional happiness. I just personally think you should buy below your means, have good reserves of cash and plow everything else into the s&p 500(if you're young enough).

I think now is a reasonable time to be a buyer, are we at the bottom of the cycle, I'm not sure. But I think if you're going to hold 7 to 10 years, find a place it's going to bring you a lot of emotional happiness and you can reasonbly afford, it's a very good time to be a buyer. Ridiculously cheap money also shapes my opinion.

@30 you've been a bear as long as I've known you through streeteasy. So that guarantees at some point you'll be right:)

Keith Burkhardt
TBG

Ha. 30 is proud of being a bear. We need both bulls and bears for the markets to function - and of course on this board to have a range of opinions. What is crazy is economy is strong and 10y at 1.5 percent? So very hard to forecast the future beyond the next 6 months indeed. Unless of course it is ultra-luxury (more than 4K per sq ft) where 300 remains bearish despite 15-25 percent decline from the peak trades/ask due to excessive supply relative to demand.

I accept what is. Interestingly, I follow a market timer regarding my financial portfolio (Dan Sullivan/The Chartist). He's not perfect, but he's been pretty darn good over the 20 years I've been following!

Setting aside the predictions of where the market will go, the data seem to indicate that there is a definite increase in transactions happening, but most of them are at worst likely setting new lows or at best flat in terms of pricing. Does anyone disagree with this assessment?

Streeteasy condo index has been trickling down for the last 2-3 years (decline from recent peak a few years back 6.5-7 percent) with the last data being October/November contracts. So up to that time, your assessment would be correct. We will only know about the current / last month contract price level in 2-3 months when Streeteasy condo index gets published in April or May.

To avoid any confusion, this thread is Manhattan centric. Also there are areas in Manhattan notably Mid Town East and Fidi which have performed much worst than the index. And UWS and Village resales seems to have gone down less in price than the index. Then there is lower end appx $1mm whichay

To avoid any confusion, this thread is Manhattan centric. Also there are areas in Manhattan notably Mid Town East and Fidi which have performed much worst than the index. And UWS and Village resales seem to have gone down less in price than the index. Then there is lower end below $1mm which may actually be up. And above $10mm and $2k plus per sq ft resales which are probably down 15 percent (double the index) on an average if not more.

Thoth,
"Prices going down don't prove prices are going down." LOL.

For many, homeownership has been good economically. But I think the longer term rent vs buy calculus will change as politics changes. The heaps of abuse doled out by landlords to tenants over many years, the affordability crisis, and the total disconnect between replacement cost and home prices in urban areas have led to a big shift in Albany that I see accelerating with Democratic socialists doing so well. Universal rent control will become a thing, as will bans on broker fees, a pied-a-terre tax, and possibly even hard caps on absolute rents such as we see in some European capitals, which are thriving despite the caps (or maybe because of them). The elimination of SALT (property taxes) and lower mortgage deduction further tilt the balance towards renting. The result in many years will be more real estate occupied by real people and lower housing prices, and that's a good thing for most voters. In the meantime, the reasons to buy may become fewer.

Note that I have stated multiple times over the past couple of years that all this market turmoil has been occuring during a booming economy with record highs in the stock market and record lows in both unemployment and mortgage rates (i.e. what should be optimal conditions for the Real Estate market) but without any "event" which would shock the system. People have asked what kind of event I was talking about. Well **IF** the coronavirus turns out to be a real pandemic (as opposed to just a good news story), shows up in NYC and results in thousands of deaths and the type of mass closings supposedly going in in cities in China, then that could be such an event which would be a trigger.

Did I make that **IF** pronounced enough?

Has Anton taken over 30's account?

Everything is fair game to justify one’s views but readers are supposed to be smart enough to believe or not believe - fundamental principle of freedom of press.

After the Plague many of the survivors benefited due to inheritance which helped spur the Renaissance. So even with 30's musings there would be a silver lining.

I picture 30yrs drafting his posts with Leanord Cohen’s “You want it darker” playing in the background. Aside fro
the fact that I value his insight, I love 30yrs’ participation in the discussions because I come off as a Pollyanna in comparison, and that is not the role I get to play elsewhere!

Sorry if this article has already been posted here somewhere:

https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-01-06/manhattan-s-flood-of-new-condos-could-take-six-years-to-sell

"Manhattan’s Flood of New Condos Could Take Six Years to Sell
By Oshrat Carmiel
January 6, 2020, 1:48 PM EST

About 85% of newly built units haven’t been formally listed
Large ‘shadow inventory’ is a drag on struggling sales market

Manhattan is glutted with even more luxury condos than most apartment-shoppers realize.

The borough has 7,050 unsold, newly built units, according to a report by Halstead Development Marketing. The bulk of those -- almost 6,000 -- haven’t been formally listed for sale, creating an under-the-radar “shadow inventory.”

The secret supply is a heavy weight on a market in which sales, especially of higher-end properties, have slowed to a crawl. It would take take 74 months -- more than 6 years -- to clear all of Manhattan’s unsold units at the pace of contracts in 2019, the report shows.

The glut is a product of a post-recession construction boom aimed at globe-trotting investors, who now show little interest in collecting lavish Manhattan homes. And most newly built apartments are out of reach for the majority of New Yorkers.

The shadow inventory is largest in the area that includes the Financial District. Those 967 apartments are on top of 96 units that are actively being marketed, the report shows."

BTW, Urban Digs shows 65 new development condo units on the market, 3 pending sales and zero contract activity in January (as well as no closed sales in November). So if there are actually 1063 units including shadow inventory, at the current rate of sales does that mean the sellout period for just that neighborhood is over 80 years?

@mcr that was very funny!! I'm going to go with Metallica's 'enter sandman'.

30, I think you caught Digs while it was updating. Well over a 1k on the market.

Ahh. I see you were only taking about FiDi.

Yes, I should have been more clear about that. Sorry.

Equities to open down while 2-3% today. Here we go again, let's see if this has legs. Watch credit spreads

Equities to open down while 2-3% today. Here we go again, let's see if this has legs. Watch credit spreads

During QE 1-3, a lot of funds, investors, and organizations quietly pocketed tons of shadow listings. Not sure if the same would happen soon.

Digs, I think your new development data for "two bridges" is off as 1 Manhattan square alone has more than "1" listing in contract.

Damn, 30 was bang-on on that coronavirus crash prediction.

He probably shorted SPX!!!

And now people can get 2.25 percent 10y arm.

Just saw that on Citi. Park a million in an account there and it goes to an even 2. Mrs George is incredibly tempted at the moment. 30, what do you think? Time to catch the falling knife?

300 - we exclude listings in contract greater than 6 months without closing. That's why. If you search, I see 8 in contract in that sector

Thank you for clarifying. For new development, that does not make sense as the closings routinely can take more take 6 months.

Also Streeteasy shows appx 20 in contract for 1 Manhattan Square.