Is it time to panic yet?

Usually you can get 25-50 bps off these quoted rates by direct deposit of your salary, moving some assets which could even be $100k cash deposit and some other discounts based on your job. So 2 percent 10/1 arm is doable if 2.5 is online rate.

Bond market dislocation was due to margin call driven selling of some vol minimizing leveraged quant strategies which were long equities and bonds. Most of that is likely behind us - next few days will be a test.

https://www.crainsnewyork.com/real-estate/pandemic-roils-citys-multibillion-dollar-commercial-real-estate-market

“No one is going to be able to do anything with investment sales for at least 30 days,” said Martin Burger, the CEO of Silverstein Properties. “Everyone is going to have to wait for the dust to settle and reassess where everything is because there’s a bit of panic right now, which is never a good thing for markets.”

Name every time we went from a Bull to a Bear stock market and we didn't have a Real Estate market correction. I remember when Black Monday in 1987 had all these talking heads saying that Real Estate was a different market and 100 other reasons why the market wasn't going to crash. What did we see? Sellers held tight for about 2 years of reduced transaction volumes and then prices started to crack. Over the next 3 years (1990 thru 1992) we saw a bloodbath.
What is different from then? Rental prices had gone down slightly (could also happen as a result of Coronavirus/Credit Crisis/Recession/etc but it's too early to tell) and significant number of Coop owners were carrying units at a loss, plus after 2 years many had exhausted their 2 year Coop sublet policy so then the monthly loss became 100%. Add to that many units had been purchased before the 1986 tax change disallowing passive losses from Real Estate being deducted from ordinary income.
Around this time I worked with Citibank to institute what was AFAIK the first short sale program where the allowed the mortgagor to enter into a conditional contract at whatever they thought "market" price was, and then brought me in to value the property to insure they were doing a market sale. If the price was reasonable, the bank would allow the sale and forgive half the deficiency and let the debtor pay the other half off under a payment plan.

Back on track here: as I have been saying for about ?2 years? the Real Estate market in NYC has been overvalued / "wanting to recede" even though all the normal market indicators were positive (general economy, low unemployment, extremely low interest rates, etc). But even in the face of those positives we have seen both volume and prices decline and I've been pointing out that all we needed was some "event" to push things over the edge. The amount by which supply is exceeding demand is overrunning any traction from low rates.
Then even before the stock market started to slide I postulated that Coronavirus outbreak could very well represent such an event.
And now if prices do exactly what I have been saying they would do I'm sure the people who have been saying I'm wrong will say I just got lucky, no one could have predicted a pandemic, etc, etc, etc rather than simply saying "Wow, he was right."
Or perhaps the government will triple down on mortgaging our future and stimulate the economy by printing money, cutting taxes, throwing multi-trillion dollar bailouts to various industries and driving us further into this crushing debt which we will never recover from just to postpone the inevitable a little longer. And then the market will dead cat bounce somewhat quickly, at least in NY - just like 2008 - even though in large swaths of the country prices still have not rebounded to pre-2008 levels.

https://therealdeal.com/2020/03/13/elliman-shuts-offices-compass-sends-staff-home-as-coronavirus-cases-mount-in-new-york/

"Starting Monday, Compass’ New York regional employees are going to be working from home for at least two weeks, according to memos emailed to staff and agents by regional president Rory Golod on Thursday. A Compass spokesperson noted that agents with key cards will still be able to enter the offices.
...
Elliman closed all its offices — including New Jersey, Florida and California — Friday for cleaning. A spokesperson for the firm said the move was just a precaution and there had been no cases of the virus at its sites."

https://therealdeal.com/2020/03/13/carl-icahns-biggest-short-commercial-real-estate/

Carl Icahn’s biggest short? Commercial real estate
“It’s like selling insurance to someone who’s going to go to the electric chair,” activist investor says

30, How does your 87 narrative look with overlay of rates?
https://fred.stlouisfed.org/series/DGS10

Real estate market will stay overvalued because there is a flood of stimulus and central bank liquidity. With rates nearing zero, hard assets naturally get inflated. It is cause and effect. Ever since Central banks started unprecedented easing, hard asset classes have been inflated. And that relationship will not change. There simply is no yield in cash.

No yield but my moneymarket acct yield is so low I am going to the bank Mon. and see if they have 5k in cash lying around which I will take home and hoard. Wondering if it time for me to get a tin foil hat(?).

Knewbie, That is the simplest reason. With NYC resales, it results into favorable buy vs rent if you are going to live in your apartment for a while. I am in my apartment for 9 years, and since it is a coop, transaction costs are pretty low including the rebate I got when buying. Average mortgage rate has been well below 3 percent during my ownership.

Before this crisis ,I used to roll 3 moth treasuries with a yield of 1.5%. Being NYC/NYS, you get also get a little bump in exemption. Now that 3 month is 50 bp's, where do I go ?. There is no future in cash.
Not every mkt crash results in a recession, 1987 avoided it. Pick your moment but s+p index yields 2%. Yes there is risk, equity market is pricing in a recession. Fed is backing you into a corner and telling you to get out ouf cash.

https://youtu.be/ZmInkxbvlCs

I would buy the bullish stimulus-driven view if the supply and demand dynamics of NY housing were stronger. Instead you have a weak market with falling prices for 4+ years already. Simulus is trying to stoke demand to catch up to the huge oversupply of high end housing here. Meanwhile taxes are rising (inevitably) because fiscal policy at the local, state, and Federal level has been hugely stimulative during the good times already. If the only cause for bullishness is interest rates 50 bps lower than a month ago, call me a bear.

George,
Your high-end new development oversupply point is valid one. Even zero rates are not going to cure oversupply of $4-8k per sq ft ultra-luxury. Only a further reduction in price of 30 percent from already down 20-35 percent will.

Separately, if you had 20-40 percent of your assets in cash and treasury bonds, what would you do with that? I am not talking about 70 percent cash /eqt investors as they probably will never take much risk.

30, You poor black knight!!

I've been more than 30% cash and high quality bonds since the Dow crossed 25000. There is a price at which every bear gets drawn from his cave. Well priced assets sell in every market. But I can imagine it's hard for sellers to accept, even if they are stirring on literally millions in capital gains.

I am sure Mrs. George is eyeing that cash/ eqt to buy a nice home.

Marcus bank was paying 2.25% about 6 months ago. Now I'm getting 1.7%.... wonder how much longer that will last? I've been 50% cash for about 6 months or so, now 75%... Also own my home along with one investment property.

https://halsteadopenhouseindex.blogspot.com/2020/03/halstead-open-house-index-report-from_12.html?m=1

"Let’s put this number 4.10 into perspective. On February 23rd (before the virus news) the average was 5.62 per open house. Followed by the drop of 15% to 4.77 per open house on the weekend of March 1 (after the news about the virus in NYC broke out). This followed by another 14% drop in traffic, from 4.77 to 4.10 this past weekend. 4.10 per open house represents the slowest weekend in the first quarter of 2020. The true indicator will be to watch the traffic at the rest of the weekends in March and early April. "

I was quite surprised we actually have a number of bookings for our open house by appointments for two listings. Currently we have four for one and three for the other...

Last week we started receiving questionnaires from listing agents for us and our clients to complete regarding places we visited, along with any symptoms of being ill. We're also using the same questionnaire.

Here's an article about how mortgage rates shot back up almost as soon as they came down, despite the low Treasury yields. Buyers may be surprised when they go for their loans.

https://www.bankrate.com/mortgages/why-mortgage-rates-and-treasury-yields-arent-following-the-usual-pattern/

Mortgage spreads will settle down. Hard to say where 10y will settle in a month’s time. I get a feeling that close to 1 percent if corona virus is under control (will still be there but manageable).

A good website for up to date Corona statistics. I think one can reasonably assume that both deaths and infections in China are double what is reported by the govt and hence this website, and US will double once enough test kits are available in a few days.

https://www.worldometers.info/coronavirus/

By age for China where a lot of older men smoke.

https://www.worldometers.info/coronavirus/coronavirus-age-sex-demographics/

I remember mortgage rates moving in an opposite direction of the 10-year Treasury. That's when I learned that MBS sets the tone for actual mortgage interest rates.

I found this to be a helpful article, correct me if I'm wrong.

https://www.thebalance.com/how-are-mortgage-rates-determined-1798392

That is correct. and it does seem that at a certain point, lenders max out on the number of loans they write/limited capital to lend due to MBS mkt. I believe if Fed really wanted to drive rates lower, they would have to go into the MBS market and do some major buying. They have done that in the past but really driving it down would be a major balance sheet expansion. Running out of bullets

Balance sheet officially expanded. Quantitative easing no longer undocumented?

What do you think knewbie?

I believe Anton and 300-mercer think this will help; I want to know whether 30yrs and George think this latest move will help? As one who doesn’t understand the mechanics, I have to rely on others and would like nothing more than consensus.

We are in a crisis of businesses small and large ceasing or greatly curtailing economic activity due to a virus, for an indeterminate period of time, with no sense of when the economy will be back open. Changing interest rates won't spur more activity when businesses are forced to close.

Feds going to buy big in treasury and MBS mkt. Powell had to do this. Waiting would have just made things worse. I always thought Powell was ahead of the curve much better then past fed chiefs. Equity mkts will have to decide whether to plunge Monday. Virus vs Fed. You normally do not fight the fed, but these are difficult times.

Dow futures are at "limit down" = off 1100 points or 5%. This will not be pretty. Fed can't reopen restaurants and get planes in the sky. Not sure anyone can.

Yeah I was just speaking with someone, my thoughts are the markets are going to take off based on all the juicing. Or else going the other direction out of fear that the powers-that-be have just stated the obvious, we're screwed.

So far the futures are down big. But that could certainly change on a dime as people have time to digest this.

With the latest rate cut, Fed has made cash worthless again. We will have zero growth in Q2 due to the current panic. 10y may be in low 1 percent range even after panic has reduced. It is only a matter of time before all asset classes if not sectors are strongly bid.

I would love to believe you 300. How does anyone price anything in a global health pandemic?

Economists forecasting 3-5 percent contraction in Q2. Likely if Coronavirus gets very bad as in 25k cases in the US in next week.

Jas, No one knows which is why equities are down 20 percent plus. However, the facts are Chinese deaths are 3k. With understatement probably 6k. Korea managed to contain it. China seems to have managed to contain it. Of course H1 2020 global GDP growth likely to be zero and markets may move 10x that of NPV based valuation models will suggest on upside as well as downside.

All things being equal and with the known unknowns, if you give me cheap money, I will use it to take more risk. Its not a matter of if this passes, more like when.
Futures are limit down so its a mystery how bad the open will get. But implied volatility tells you pretty clearly that this mkt can turn on dimes
Re mortgages, ARM's are usually based on Libor and Libor outside of 2008/09 has tracked fed rates pretty closely. Feds cant save the world but his move will put $'s in a fair number of consumer pockets. Of course the counter is your savings just lost a huge chunk of income. Again, fed is telling investors to stay away from cash and take some risk.

So it was Dalio
“Bond market dislocation was due to margin call driven selling of some vol minimizing leveraged quant strategies which were long equities and bonds. Most of that is likely behind us - next few days will be a test.“

After the last financial crisis the Fed jumped in and became pretty much the only buyer in the MBS market (because they quickly became considered Kryptonite). That not only continued well after the crisis passed, but increased over the next decade:
https://fred.stlouisfed.org/series/MBST

The problem is that we could easily see the same thing happen as in 2008. If people have no income, or even if the government does what some consumer advocates are starting to suggest - a moratorium on mortgage payments - there will be nothing coming into the income stream to pass through to MBS holders. So once again the Fed would become the only buyer in that market. AFAIK that's currently a $7.5 trillion market and I don't know if the Fed can take the entirety of that on its shoulders without some unforseen consequences.
https://www.ft.com/content/a8d5607c-6571-11ea-b3f3-fe4680ea68b5

In addition, what do you do with underwriting these loans? With the likelihood of of a severe turndown in Real Estate prices looming (and privately everyone knows this is happening no matter what they are saying in public to attempt to keep it from happening, but it's "thoughts and prayers" even though the tsunami is already visibly in sight) how do you give loans at more than 65% LTV? And what do you tell underwriters to use for "income" when you know people aren't going to be getting any?

At SOME point the government's promises are potentially going to back it into a position of printing so much money that it will result in a hyperinflationary Weimar Republic.

"However, the facts are Chinese deaths are 3k. With understatement probably 6k. Korea managed to contain it. China seems to have managed to contain it. Of course H1 2020 global GDP growth likely to be zero"

300- the point is not that people under 70 don't die and might not even show a lot of symptoms. It's not about Chinese or Korean deaths or how those countries eventually contained it, or what you may consider a low mortality rate. The point is that anyone who has any conscience is staying home to avoid the spread of a disease that to some may seem like the flu but in reality has a mortality rate multiples of the flu. To avoid spreading it to the elderly who may die. I'm sorry but it's really naive to think global GDP growth is going to be flat. If H1 is zero that's only because we eked out some modest growth in Q1 before this hit. the world economy is probably going into recession, and quite likely a severe one. Something can always can always change unexpectedly, but the base case has to be a real, significant recesssion. Please explain if you disagree. Flights and travel are largely shut down. Schools are closing. Social gatherings are shut down. Commodity consumption is down. Any and all cyclical industries are suffering.

Until recently I agreed w/ you that the wealth effect and low rates would underpin NYC RE prices despite what looked like stretched valuations otherwise. Now, I don't know how rates can do much of anything in the near-to-medium term. MBS spreads have not tightened in the same way treasuries have. It's not so simple to say the Fed is cutting to zero so anyone can get an historically low mortgage rate. Happy to be proven wrong here if it's happening in the past couple weeks.

Bottom line-- if you are a long term holder of equities or RE you will make positive nominal returns in the long-term. But to suggest that there's currently some opportunity to capitalize on a quick economic bounceback and a low cost of capital from the Fed -- well that is very shaky ground.

AVM, I am not in the camp of real significant US recession 2008 equivalent. I can understand why some people feel that way and I respect opinions of bears (perhaps not of permabears). There is a reason VIX is well over 50 and almost touched close to 2008/9 levels. We will know more in the next two weeks as the test kits are becoming widely available and we will know the true extent of US infections.

For anecdotal comparison, I went to a famous East Village sushi restaurant in early 2009 on Friday evening at 7.30pm. There was only one more party till 9.30pm. Now people are sitting at their homes and doing take outs. Is the shutdown real. Yes. Will it last many months? I really do not think so. Will it last two weeks at least? Yes.

Lastly, even Dalio got humbled. I am just a lowly former finance professional who was in the flow of market information back in the day. I can only try to interpret market behavior but do not have actual non-public info.

Different note. Wonder if anyone remembers MJ “Dirty Chiana” video and Stevie Stevens.

https://www.nytimes.com/2020/03/15/nyregion/coronavirus-nyc-shutdown.html

Restaurants and schools being shut down.

Next 2-3 weeks will tell the tale. Will the tsunami of deaths and overloaded hospitals occur ?. Charts seem to point to that. I get it that this is not the seasonal flu and it no doubt is more deadly for specific demographics and more easily transmittable and may also last well past spring. But if you look
purely on numbers , the 2017/18 flu season was one of the deadliest with 80k deaths. There were no lockdowns or slowing of the economy/recession. Death toll so far for Corona is 63 ? For now this economic maelstrom does not make sense to me.

I think the shutdown now is good to prevent further transmission and panic (there is no logic to panic) but if corona is well contained after 2 weeks, the stuff should be opened back up slowly. I do feel very bad for restaurants and construction workers. They work hard to make a living and usually do not have back up plans.

I think South Korea has probably handled this better than anyone else.
https://www.bloomberg.com/news/articles/2020-03-15/south-korea-wants-to-share-its-tips-on-tackling-the-coronavirus

https://therealdeal.com/2020/03/15/its-a-moral-obligation-compass-leonard-steinberg-calls-for-two-week-ban-on-showings/

“It’s a moral obligation”: Compass’ Leonard Steinberg calls for two-week ban on showings
Resi firms are pushing work-from-home and embracing video tours

I haven't seen this reported anywhere, but tonight I attempted to order groceries from multiple websites (Amazon Fresh, H-Mart, etc) and it looks like they have suspended deliveries. I'm curious if it's just me or are others getting through?

I should have included this in my earlier post:
Powell indicated that the Fed would purchase $200 billion in MBS. That's about 2.6% of the $7.5 trillion market. How much liquidity is that really going to provide if everyone else stops buying?

BTW "Mortgage Originations Hit Post-Crisis High in 2019
January 23, 2020John Bancroft
Lenders generated a hefty $2.375 trillion of first-lien home loans last year, the strongest the market’s been since 2006. Volume was up 8% from the third to the fourth quarter, but not all lenders took advantage of the refi wave."
So $200 billion represents about 1 month of new mortgage generations. Is the Fed prepared to do this every month?

Perhaps the Fed can pay me 1% to borrow $1 trillion. I guess I can find something to do with it. I'll even offer a personal guarantee.

Peter Cooper Village & Stuyvesant Town sent out an email this evening that they are closing all playgrounds. With schools in NYC being closed this is going to get "interesting."

multicityresident, go F**K yourself

30yrs' analysis sounds reasonable. Indeed, since 2017 we had heard some experts kept predicting the new round of QEs cannot be avoided; and most of them had said it shall happen in 2019 or 2020. Given the fact that QE1~QE3 postponed the last financial crisis, the current situation is somehow expected.

Just add some interesting observation, Marcus 11-month no-penalty CD first dropped from 1.9 to 1.6, then being discontinued, all these happened within a week.

Everyone is recalibrating their risk tolerance at the exact same time. Duh. No one gets on the other side of this with the same appetites that they had previously.

No one knows anything, and there are no grown-ups. We'll muddle through this eventually, after all of our institutional failures have been laid bare. The Fed is ill-equipped, and never used their mandate to stop the nonsense that is now blowing up in their faces. The federal government is run by a Alzheimers-addled narcissistic sociopath. A good portion of the Congress is focused on fattening their campaign coffers with the donations of the fact-allergic evangelical cultists, duty be damned. Here in NYC, in my Manhattan precinct (the 1st), grand larceny is up 60%. Bill De Blasio is probably still going to the gym. He's marveling at how much faster he can get there now, without all the traffic.

Good time to take a walk outdoors, at a socially safe distance. Or boot up some nature videos.

I'm pretty sure that I've already said that it wasn't Stop and Frisk that brought down crime, but the economy. Similarly, I think I've also noted that despite government statistics to the contrary the economy wasn't as rosy as it was being painted because crime was going back up (this may not have been apparent if you looked at CompStat numbers because NYPD has been cooking those books for years).

Olshan shows 21 contracts, all in the $4-10M range, nothing at the very top of the market. I wonder how many of the contracts were run-of-the-mill rich New Yorkers who were emotionally committed to act before the markets tanked.

Every day this virus seems to be inflicting a massive toll on the economy, and it seems likely to get worse before it gets better, since our government isn't authoritarian enough to stop it the way China and Singapore did. (If you are ordered quarantined in Singapore, you have to leave the GPS on your phone running and you get random messages during the day that demand you immediately turn on your camera and show the surrounding area to prove that you're at home. I wonder how this works if you're busy with, um, #2.)

Side note - Has anyone other than me noticed that Anton’s English has improved significantly?

Perhaps is from eating American moose and sqvirrel?

Having read and tried to digest everything that I can, I am putting my money on this scenario from one of 30yrs' posts above:
"Or perhaps the government will triple down on mortgaging our future and stimulate the economy by printing money, cutting taxes, throwing multi-trillion dollar bailouts to various industries and driving us further into this crushing debt which we will never recover from just to postpone the inevitable a little longer. And then the market will dead cat bounce somewhat quickly, at least in NY - just like 2008 - even though in large swaths of the country prices still have not rebounded to pre-2008 levels."
If my coop is any indication, "we" are going to keep kicking the can down the road until it becomes unsustainable, and while it will become unsustainable at some point, it's not going to be before those responsible are long gone - there is still so much room to borrow! The next generation be damned.

Me too

BTW If Powell sticks to his stance of "no negative interest rates" where is there to go next except printing money?

我 建议我们都学习中文。
300_mercer may well be ahead of the curve on this one.

Mcr, I wish I had any idea say 5-10y or longer down the line into future as to how all the excess debt would end. Current thinking on rates seems to be where is inflation despite printing money like crazy by most central banks and what is the harm in keeping the rates low as people (institutions / central banks and Chinese govt) are still buying treasuries. US discovered oil and Bezos built Amazon to conquer inflation.

And the investing wisdom MAY be, if some one wants to buy a home to live in, get a cheap mortgage you can comfortably afford rather than investing some of your money into treasuries with low yield and put some more money in equities due to corona sell-off. So the portfolio allocation may look like long real estate you live in and equities, enough cash for liquidity/contingencies, and short bond via mortgage - note the missing treasury bonds.

With the US gov officially returning to its racism path like few centuries ago , there is only one way to go for the market.

France banned rent, taxes, utilities. Landlords are screwed

At the end of all this, every building will have a landlord. But many will be missing their restaurants. I feel bad for one but not the other.

There are a lot of small buildings which won't be able to service their debt without the income from the restaurant (which can often be 60% of the Rent Roll).

Some rich dude will still own the buildings. Call it schadenfreude, but after seeing rents rise so dramatically, I'm not at all sorry for any landlord. If you own a building in NYC, you're rich, and you don't get much sympathy from me.

My wife and I were just reminiscing about what made New York so great (in the past), all the small and eclectic restaurants, shops etc.

She takes a very anti landlord, they're all greedy position. I'm more pragmatic, it's a sort of evolution of the city and the owners simply want to maximize roi.... nothing personal. Perhaps all this will initiate a small reset that will actually improve the quality of life for many New Yorkers?

On another note, I think we need to get through the next 2 weeks and hope for some good news, and be released from this panic/dread that's hanging over everyone. After a closing today you could see the panic in everyone's eyes as they were about to enter the elevator....

I will wait for some to suggest that local governments should advance 3 month worth of real estate taxes not just postponing the collection of taxes with Fed giving the local govts a credit line at Fed Fund rates. But do not think the local govts can make it happen administratively.

Some = someone

George, we've tried systems that claim to eliminate "the rich", but they didnt work well for the rich or the poor.

I have no desire to eliminate the rich, since by most measures I am rich, but I also have little if any sympathy to spare them. If NY real estate prices do what 30 predicts, it will be good for almost everyone. And I would support emergency measures to create rent holidays for all renters or universal rent control. Although far from perfect, such measures are one reason that Paris has preserved its charm while Union Square loses its best restaurants to become bank branches.

George your mindset is that of a typical leftist. These restaurants that you speak of make a killing in NYC and passthrough practically all their profits to owners/investors while treating their staff like crap. While many of them have the money to buy the real estate outright they rather put the money in their pockets. This goes for other businesses as well such as gyms, nail salons, barber shops etc.

Restauranteurs feed me 2 and sometimes 3 meals a day. Landlords don't do squat for me. NYC landlords in particular tend to be the least professional in the country, typically people whose parents bought decades ago, did little, and rode the wave up while they decamped to Miami and appointed cousin Bruno to collect the rents. No sympathy for them.

And while restauranteurs are the worst perpetuators of the racist tipping system (you do tip a minimum of 30%, right?), at least their investors took a big risk and their mangers and employess bust their a$$es every day serving rude and capricious New Yorkers in a low-margin business where most of them fail within a year or two even in the good times.

Landlords provide shelter at 2.5-3 percent cap rate in NYC. I have nothing against restaurant owners. They provide employment to those most needing it. Food you can cook yourself cheaper.

I would expect many landlords to not being able to collect the rent and some may voluntarily postpone collection if they have liquidity.
The leftist mentality of not wanting to pay rent forgets that landlords pay a lot in real estate taxes which is a function of rents collected. Landlords are only making 2.5-3 percent return on their capital. For people who want their rent cheaper, there are options further away cheaper and the subway ride costs the same.

I'm getting more cash next week. This is going to get nasty.

If many small restaurants are gone, the 30yrs dotard's prediction of 30% down might become true this time?

Gotham decided that cost of remaining in business in this environment is not worth it. They closed.

There will be many, many restaurants that reach the same conclusion that it is better to go out of business than hemorrhage cash through rent payments. Perhaps some landlords will restructure/delay.

The same goes for any small business bound by a lease. Retailers. Start-ups. You name it.

All that a moratorium on rents does is pick winners and losers. A moratorium on rents would simply move the bankruptcy bubble from tenants to landlords.

The economic situation we are about to enter is massively deflationary, especially in NYC. Overnight we have seen the global aggregate demand curve shift left in its entirety. You can draw the graph.

The obvious solution is what the Treasury is considering now: helicopter money. Overnight, there has been such an enormous hole created in wealth that a targeted handout couldn't possibly be big enough to be inflationary. All countries will need to do it.

As for NYC real estate - people will need to leave the city. Simple as that. With liquid net worths for many falling >25%, those common charges, maintenance costs and mortgage payments are albatrosses. Not to mention, they will need liquidity! Rental prices can and will adjust quickly - people who can't afford their rent will not renew, or walk away from, those leases - they will go to cheaper apartments, or they will leave the city.

There is also a major spook factor here. Like after 9/11, living in a city seems much riskier now than before. How much of an impact this has is anybody's guess.

Let's just say that NYC's pre-coronavirus reality is no longer a reality.

We've only been at this for a few weeks. Time will tell if some paramount shift takes place. For now I find it hard to believe we are literally economically shooting ourselves in the head while the Covid US death toll stands today at 115 and globally 9,000. Where's the cost benefit analysis of economic suicide ? I get it that the curve and charts say disaster around the corner, we shall see. I am thinking and hoping they are dead wrong. NIH released a report on Tues detailing 355 Italian Covid deaths...average age 79.5.

Some insight into how agents think:
Apparently a number of agents are asking their firm's owners if pressure can be put on Zillow, StreetEasy, etc to reset "days on market" either to zero or to not include any days currently adding on during Coronavirus crisis.

Grasping at straws

I am seriously concerned about crime in this city given the number of restaurant, retail, hospitality, entertainment and other small business employees who will be out of work. A lot of them live hand to mouth and the next rent check could break them. This is entirely unlike the financial crisis, when businesses suffered but remained open, and tourism to NYC continued relatively unabated.

Tourism to NYC will not be returning soon.

https://www.nytimes.com/2020/03/16/nyregion/Coronavirus-nyc-economy-.html

https://therealdeal.com/2020/03/18/we-are-not-close-to-the-bottom-in-the-us-hotels-suffer-declining-revenues-mass-layoffs/

“We are not close to the bottom in the US”: Hotels suffer declining revenues, mass layoffs
Nationwide, the coronavirus has cut deeply into occupancy and root rates

In New York City, occupancy was nearly halved from the week earlier to a rate of about 49 percent, according to STR. Some hotel owners have said occupancy in their properties is as low as 15 percent.

Revenue per available room in New York fell by nearly 55 percent to just about $88 per room.

Several hotels in New York are closing down as reservations have disappeared. The 1,878-room Hilton hotel in Midtown, one of the largest in the city, is closing later this week.

The New York Hotel Trades Council said roughly half of its 40,000 members have been laid off.

“This is a very dark moment not just for the hotel industry,” union president Peter Ward told the New York Times. “It’s a dark moment for the retail industry, for the restaurant and bar business, for Broadway.”

I would caution that it's early days. I'm terrified -- I'm a freelancer married to a freelancer--and yet I was rather surprised that one corporate-job friend's response was, "well, just walk away from your office lease." Um no, I prepaid my office lease, because I want my landlord to be able to ride this out. If 9/11 is our comparison, remember that residential properties downtown went down in price closer to 10 percent than 50 percent, and the dip was pretty short. So maybe a depression is coming and we all have to live in a truck... but it's really, really too early to tell. In the meanwhile thank heaven for FaceTime.

Go back and look at the first 5 Olshan Reports just for shits and giggles:
https://olshan.com/marketreport_archive.php

The sentiment right now is very negative and rightly so due to service industry job losses and equities in bear market. As hard as it is, stay positive everyone. Go for a power walk and get some blood flow going. I just did that after wiping my building elevator buttons and door knobs with Lysol and a couple of miles walk felt great.

Equities can turn on a dime and so far the deaths in the US are very small. Daily new cases will increase for a few days before hopefully starting to decline next week (total cases will keep going up) as we finally have the test kits. We all just have to make peace with 1 month of shut down. It is nothing any of us has dealt with but we are strong, can do nation, and Congress can hopefully put politics aside during this time of national crisis.

BTW at this point in time I'm reasonably satisfied with my strategy of liquidating most of my holdings and being in cash even though the returns were close to zero. I'm just upset at myself for not shorting as much as I told myself I was going to and procrastinating pulling the trigger on loading up on Real Estate stock puts on a number of companies which have gone down significantly. But having a cushion of 10+ years living expenses liquid is helping me cope with the stress of wondering if I'm going to be alive in a year.

Nothing wrong with being in cash. I always keep a lot of cash earning nothing as it gives me peace of mind. Kudos to people who keep a large percentage of their assets in equities and have the mind set of staying invested for the long run - I can’t do it. Ideally one should be adding to their long term longs in equities.

At this moment.

https://commercialobserver.com/2020/03/city-halts-rezoning-process-while-politicians-call-to-stop-construction-projects/#.XnJaMuI78pY.facebook

https://therealdeal.com/2020/03/19/cuomo-exempts-construction-certain-residential-services-from-virus-order/

Cuomo exempts construction, certain residential services from virus order
The state is expected to release a full list of essential businesses on Thursday

Went to my credit union's only Manhattan office Wed to make a deposit only to discover that branch had closed without so much as a how do you do. After a Yelp complaint (long story) somebody emailed me to explain only Long Island drive through branches remain open. Don't bank with Bethpage Federal. They had a good money market rate last year when I opened my account.

My husband to me a few minutes ago: "Now is the time to panic buy or panic sell. Hmmm, I can't decide. Here's what we're going to do instead: We are going to put our hands up in the air and just run around the house screaming."

We actually thought about it, but decided to just continue parallel working on our computers because were we to indulge the arms-raised-run-around-screaming impulse, it would likely upset the dogs, who are impervious to the stress of the pandemic and seem happier and more relaxed than ever to have the man and the woman around 24/7.

I have helped financial firms develop business continuity and emergency plans for many years. A client once handed me a first draft, which has long been my favorite:

"When in darkness,
When in doubt:
Run in circles,
Scream and shout."