Closing

I'm curious too. Seems like many people would cancel their contract if they could get their deposit back, but no one (as far as I know) has yet pressed the issue and gone before a judge (I don't even know if a judge is available right now -- courts are closed?) for a ruling. As the crisis gets worse and worse, it seems crazy to be "forced" to close on an apartment in NYC.

Is it a condo co-op or townhome?

Mid April is near estimated peak of death curve so I doubt it.

See this thread for discussion of virtual closings: https://streeteasy.com/talk/discussion/45643-virtual-closings

The short answer is that yes, it is still possible but with some accommodations.

"forced" to close? Please. You signed a contract. Imagine if the opposite scenario of where the seller is trying to back out. Don't play victim.

I put "forced" in quotes, please learn how to write English before quoting my quotes. And in case you're as ignorant as you sound there is a concept in law known as "frustration of purpose" which theoretically applies to just such a situation as signing a contract in January, when you would have no reasonable expectation of your health being adversely affected by moving into a building or complex, for example. Now, New York contract law is pretty strict and this usually applies to things like fires or an apartment that perhaps has flooding from unit above, etc, so it hasn't been applied in NYC to coronavirus – yet. But it's not insane for a buyer, like OP, to want to back out, or at the very least push the closing until the crisis is gone. Why would he care at all about the seller? This is business, not charity.

Most likely all parties will agree to postpone by a month, things should return to normal by mid-May

For people who have done deals outside of New York, they usually see our closings as totally insane. Perhaps if this goes on long enough that the players get the process down, we will end up with a permanent change in streamlining closings.

It has been posited in the past that the only reason New York closings are so much more complicated was to give more people an opportunity to stick their hands out and collect fees.

Love the English argument in online forums

"Normal by mid-May." Good luck!

We will be very lucky to be back to normal anytime in June. Odds are that some restrictions will be in place for another year until we finally have a vaccine. Remember, "shift the curve" means a much longer time dealing with this, compared to letting it run its course.

The Real Deal: Homeland Security says real estate is “essential business”.
https://therealdeal.com/2020/03/31/homeland-security-says-real-estate-is-essential-business/

Update 4/1 Real Estate is now essential business

https://www.nysar.com/covid-19-resources/nysar-updates/esd-deems-specific-activities-essential/

Oy! If the buildings won't let us get apartments painted , and won't let customers in, our business won't restart... I'm sure NYSAR thought they were "helping" but all this is going to do is make it harder for us to get small business relief.

We can start showing again.
https://therealdeal.com/2020/04/01/home-showings-allowed-to-resume-by-cuomo-administration/

Be careful what you wish for. All of these exceptions for this-and-that special interest create more means for the virus to propagate, thus extending the time it is around, and thus extending the present economic catastrophe. Several European and Asian nations have completely shut down everything, including all real estate: no closings, no new leases, no moving, no terminating old leases, no inspections, no utility maintenance, no repairs. Here we can do just about all of these things - Home Depot is doing great business lately. Other nations with a more severe approach may well get through this more quickly than we do, and be more likely to reap the benefits of the great pent-up demand that is supposedly waiting out there.

I think allowing showings is a horrible idea. If I was still on my building's board, I wouldn't allow them to happen.

As long as renting/buying/moving is considered an "essential service", it makes sense that showings would be allowable (advisable is another matter).

Let me be clear: I don't *want* showings to happen if it means putting my friends who are doctors at one bit more risk than they already are. If we need to stay inside for awhile, we'll stay inside for awhile.

and it looks like the new clarification is that showings must be "virtual."

I have no intention of showing anything for the foreseeable future until we have a lot more clarity on a lot of issues.

At closing, is it reasonable for a buyer to want a coop to disclose whether or not there are coronavirus infections in a building? a complex? amongst staff?

Closing is not the time to be doing due diligence.

What are you going to do when you are told "we do not disclose the health information of our owners and tenants"?

The State clarified that home showings be virtual only.

ovid that would be a Hippa violation and subject to lawsuit.

Stache: well, building residents are being told if there are infections in their buildings. At least I know of a few people who have been notified that there are infections in their buildings. HIPAA violation would be telling you who in your building is infected, as far as I understand it.

Aaron2, it's not "due diligence" if the contract was signed when there was no thought of a pandemic in NYC (or even Europe). If a building had a toxic gas leak that sprung up would you say "closing is not the time to due diligence"? As far as you're concerned anything that happens to the building after contract signing is just tough luck. The arrogant stupidity of that position is ridiculous. People are literally dying because of lack of testing and information and you are blathering on about "due diligence". It's frankly, moronic. The point is they do "disclose to owners and tenants" you moron. But they won't disclose to potential owners. I think this is ripe for litigation and I'm sure you'll see a lot of lawsuits in the next 6-12 months.

Ovid, from my point of view (I'm a broker, not an attorney), the existence of a COVID-19 case in a co-op is a material fact that seller should disclose. I can imagine a world where sellers don't tell their listing brokers so the listing broker doesn't know, but if buyer's attorney asked seller's managing agent as part of their due diligence, then I would think it would be incumbent on the managing agent to respond.
But I honestly think looking at the numbers you just have to assume that "someone" in every building you walk into has it, and the responses to that should be to not walk into more buildings than you have to, and to wash your hands before eating, touching your face, etc.

Ovid - Contracts allocate risks. You were unhappy with the deal you made before the pandemic, and you are grasping at straws. I would bet money that you have no out, but only a lawyer who has your specific contract in hand will be able to advise you. You are a sitting duck for a lawyer to make money pursuing a hopeless case, in which case you will be stuck not only with your purchase, but also legal fees on top. Your machinations are exactly why sellers require deposits with contracts.

Ovid I think your question is a pretty dumb one to ask. Why doesn’t your lawyer also ask the managing agent if there are any other diseases in the building like ebola, lyne, zika, etc? Like front porch said, you have to assume every building will have had a positive covid infection whether reported or not. This is a global pandemic not just local to nyc. And I love how you attack people on this thread that disagree with you. Loser

No one in my current residence has covid, it is a small building, why should I move to a large building that according to all you real-estate-robots "must have an infection"? That certainly was not in my thinking when I signed the contract.

It's okay that you think I'm "grasping at straws", I never said I wasn't. I have never claimed there is a current legal framework for getting out of a contract because of Covid, only that perhaps there should be.

What I see on streeteasy is a bunch of people with their heads in the sand. I was asking questions about Covid way back in early February and people like you all were saying "it isn't going to be a problem", "the market will rebound", "you can't get out of a contract", "We're not Italy", "we have testing capability", "we've closed the borders."

So forgive me if you feel insulted when I say mostly you all seem full of shit. That doesn't change the fact that I currently have no legal rationale out of a contract. Just because there is no legal way out of something, doesn't make it right. That is what frustrates me about it – everyone on this sub (and other real estate forums) is so short-sightedly caught up in your own myopic little world, you don't see the way your "business as usual" attitude is part of the problem. As far as I'm concerned, not moving is the best thing I can do and I am not planing on moving anytime soon. If you all think I "should pay the price" for not moving, so be it. I humbly suggest you're all fucking stupid.

bpcbuyerconfused. I'm sure if there was an ebola outbreak in a building, people would be notified.

Zika and Lyme disease aren't infectious like Covid.

It is just this stupid "it's just the flu" attitude that is why over 500 people died in NYC on Friday. Stop worrying about your bottomline and start worrying about your city and your country.

front_porch. Thank you for having a relatively sane response.

I guess the question is if a coop says "we don't know of any covid cases" and then the buyer moves in and comes down with Covid and finds out that residents knew there were cases and the coop knew, would it be litigable?

I know it's a lot of hypotheticals, but from my point of view the real-estate industry and the state are actively trying to prop up the real-estate market at the potential cost of people's lives. I think that is an interesting legal position to be in. Buyer's have to sign waivers and warning about lead paint, asbestos, and carbon monoxide sensors, and that's all fine. This seems potentially a similar legal position. Clearly, if you do any reading at all about viruses, bigger buildings are more risky than smaller buildings. Also more risky: elevators, laundry rooms, bathroom vents.

To pretend that all apartment buildings are the same seems foolish to me.

Ovid, Your contract specifies all your rights and contingencies. Disclosures are typically only as per law I do not think there is any law yet forcing disclosure of corona cases in a building to a buyer. Walk through is meant for the apartment. I will be curious what your lawyer says are point in your contract which can let you terminate your contract and get your deposit back.

@300_mercer - It sounds like Ovid’s lawyer has told him he has no out, but that he could pursue a creative, but unlikely to succeed, novel argument. Ovid is on here testing public support for such an argument and finding such support woefully lacking. He appears to be under extreme stress, so I am cutting him some slack despite how offensive I find his posts.

I have sympathy for him too. If I were to be in his position, I will try to negotiate down the price a bit and see if the seller bites. If I were to be the seller, I will say if you bought SPX in Jan, will the SPX seller give you the money back? I have known a case in 2009 where the buyer walked away from the deposit as they they think market is down more than 10 percent deposit amount - and the apartment sold for roughly the original contract price in 6 months.

And a friend (seller) in SanFran closed a week back on a nice painted lady where the deposit was only 3 percent.

300_mercer. I know I am likely not able to cancel my contract, that doesn't make me wrong for wanting to. My ire directed at these forums is mostly because by merely suggesting that idea, I am met with constant name calling and rejection, as if I am making things up. And I have been raising this issue for months now (on this forum, on other forums, with my lawyer and agent, etc). This is not the first time I've raised the issue, and each time I am met with stronger and stronger insults. This is NYC, so if someone calls me stupid, I'm gonna call them an asshole. What really offends me is the lack of scientific thinking in the real-estate industry. I truly hope NYC turns the corner and things get better soon, but I see no reason I must risk my health to keep your faith in a positive outcome.

It is my understanding that if a building has an underlying issue that was not revealed at contract-signing or inspection, that is still grounds for canceling a contract. For example, if a toxic chemical was discovered, or if the foundation of the building were found to be a risk of failure – reasons the buyer could claim "uninhabitability". I do not think Covid19 is exactly like those kinds of things, but I (not a lawyer) see a possible similarity. In my own personal view, the added health risk of moving – in particular to a large building with lots of people sharing common spaces – during a period of time when the federal, state, and city governments are recommending and enforcing various "stay at home" policies seems like grounds for cancelation. Why should I have to move into a environment that is less safe than my current environment? The answers I've received are not adequate in my view – they rely on bogus science like "well everyone has it" or "all spaces are the same". Any casual reading about Covid19 over the past few months, and any deeper reading about viruses in general, will make it abundantly clear that buildings where hundreds of people share lobbies and elevators are infection vectors. To me it is obvious that large buildings are not places I would choose to live anymore if I could avoid it. Does the law agree that it is a reasonable objection? Currently, no. Am I frustrated by this? Fuck yes, I'm frustrated. That's normal as far as I'm concerned. I have no problem with reasonable arguments against my point of view – what is annoying is people who seem to think I'm crazy or "grasping at straws" as if it is funny that I might get sick or die because I signed something months ago.

Isn’t it about time for Anton to chime in to perfect this thread?

Ha. It is true. And this form is free for all to express themselves hopefully politely using NYC standards.

“This is NYC, so if someone calls me stupid, I'm gonna call them an asshole.”

I do not blame you for trying to get out regardless of the legal opinion and expressing your frustration. Tough times with Corona for every one. Others are just calling you out on this. All fair.

Personally, in the last couple of apartments I have sold, I had a delay penalty of 8-10 percent per year beyond the stipulated closing date if the delay is not from my side and rebate if they close early. In an apartment I purchased last year, the sponsor had the same penalty but no rebate.

(C)ovid said: "It is my understanding that if a building has an underlying issue that was not revealed at contract-signing or inspection, that is still grounds for canceling a contract"

No. Read the contract you signed. It will clearly lay out the reasons for cancellation and penalities for breach by you. It will also lay out the seller's representations and warranties. It then says that the contract is the entire agreement. A court won't read into the contact anything that isn't written.

New York is a caveat emptor state. Sellers must disclose certain things defined by law; the only required infestation disclosure is bedbugs. If the known presence of infectious diseases was a concern to you, you should have written it in the contract. But you didn't. Under the law, you are the loser... at least to the extent of your earnest money. Once you get on the other side, you'll then have the upper hand as the seller.

@George - Exactly. The more Ovid says, the weaker his case becomes. The part that I find particularly offensive about his posts is how he is accusing everyone else about worrying about their bottom line to the exclusion of others’ health, whereas my reading of all the posts is that he is the only interested party expressing an opinion, which opinion is motivated purely by his personal bottom line and not by concern for his own or anyone else’s health.

The story could very easily be told from the seller's perspective. Seller goes into contract at X. Someone comes along and offers 2X. If the seller breaches, in NY, the gazumped buyer can sue for specific performance, ie a court order to sell to the original buyer at the original price.

Alternatively, you could do like they do in England and Wales where there is no contract until the closing. Then, regardless of your agreements, either buyer or seller can back out at any time for any reason before closing.

https://en.m.wikipedia.org/wiki/Gazumping

George. I'm not quite sure what you're talking about. I don't know why my position that it is risky to move into a large building is "offensive". It's just science and math. You're confusing the law with science. I have never claimed the law is on my side, only that health and science are on my side of the issue. It is obviously risky for me to move – for myself particularly, but also for the residents of the building, the office staff and the movers who have to help me. You can bitch and moan about contracts all you want, but it is objectively safer for me to stay put – which is in fact what I am doing.

sorry above was meant for multicityresident, not george.

George. It is my understanding from talking to about 4 different lawyers that there is ample case law for cancelling a contract for unforeseen problems, such as toxic gas, flood, fire, foundation problems, etc. All of these lawyers also felt that Covid doesn't rise to that level.

Caveat Empor applies to things you could have discovered when you signed the contract, not to unforeseeable events. There is something called "frustration of purpose" that has been used in New York / NYC for exactly the sorts of things I mentioned above – unforeseeable events that change the habitability. But, no lawyer has applied it to Covid19 or thinks it can be applied to Covid19 as it doesn't rise to the "inhabitability" bar . I am fully aware of that.

Nothing offends me about this whole situation except the fake-morality espoused on this forum – as if my desire to change the conditions of my contract is somehow morally objectionable. The reaction is a bit hilarious, honestly.

ovid,
My suggestion to you is to do your own analysis as to how much it is worth to you to get out of this contract. I know of a guy who last June walked away from several million in contract deposits on small apartment buildings in Queens after the Rent Stabilization laws changed and he determined that the loss from closing on these deals would be much greater than losing the deposits.

A week ago Jacob Chetrit walked away from a $35 million deposit on The Daily News building:
https://therealdeal.com/2020/03/25/jacob-chetrit-pulls-out-of-815m-daily-news-building-deal-sl-green-keeps-his-35m-deposit/

If your attorney is any good they can probably cut a deal for a partial refund of the contract deposit based on the nuisance value of the lawsuit you'd be threatening. Considering you'd be spending money on that litigation as well, your net would probably be greater.

But I think you need to disabuse yourself of any notions that there is any magic bullet which gets you out of your deal without some non-insignificant costs.

And just to nitpick, when you include flood, fire, etc. in reasons to cancel the standard Coop and Condo contracts include some very specific language in the "Risk of Loss" section.

30yrs_RE_20_in_REO. I appreciate your answer. I'm considering it for sure.

And just my opinion, but I believe if you walk away and take a loss, if you keep a sharp eye on the market some time within the next 3 years you'll be able to buy a similar unit or one which you'll be happier with because it meets your new criteria for enough of a discount that will more than make up for whatever your losses are on this transaction. So just to poke my finger in the eye of certain people here who want to characterize my positions as "never buy Real Estate" even though I've personally purchased orders of magnitude more than they have, what I've actually been saying is keep your powder dry and you will be rewarded. And at this point I think there is close to zero evidence that I have been totally vindicated as to that position.

Ovid - Nobody believes your disingenuous protestations about science, health or safety. It has been pretty clear from your posts on various threads that all you care about is your personal bottom line. That is why it is bizarre that you are accusing others of taking some false moral high ground.

Multicity, I don't know what your'e talking about. I sincerely fucking don't want to move into a building with hundreds of other people during a indefinitely long viral crisis. You're being a cynical simpleton.

Then stop being nasty, Covid, accept that you made a deal you no longer wish to be a part of, call the seller, tell them the deal is off, say goodbye to your deposit, and be glad you didn't actually close.

With regard to trying to get some of the deposit back, beware that if you sue the seller, it will be public record, and this could be discovered by future sellers and coop boards who might reject you for being too litigious. A good seller's agent does a public records search on the prospective buyer to look for stuff like that.

@Ovid - Sure, I believe you now.

"This clearly is a tradeoff," he said, "between privacy rights and the public health of the community." Spector said "privacy rights" are not absolute. If someone were to refuse to provide consent, the board would then have to decide what to do, he noted.

"This would be on a case-by-case basis," Spector said.

As for the argument that HIPPA (Health Insurance Portability and Accountability Act) bars release of the information, Spector said HIPPA only applies to medical providers. It does not apply to community associations, he said.

Spector noted that the board has a responsibility to ensure that it is as safe as possible to reside at Addison Reserve. "That is all we are trying to do," he said.

https://www.palmbeachpost.com/news/20200404/coronavirus-florida-dilemma-of-gated-communities---reveal-identities-of-those-with-positive-tests

It is my suspicion that OP is a troll, more specifically a sock puppet for ovid. I'm questioning if (s)he is actually in contract. (S)he has been pretty strident from the get go and I think his/her goal is to get us riled up, which has been fairly well accomplished. I witnessed this kind of behavior by another troll on planetout right after 9/11. The rudeness, the lashing out etc. So my suggestion is that we no longer feed this person, let him/her see the consequences of whatever decision (s)he makes. It is pointless to further pursue this topic since ovid is convinced of his/her opinion and is unwilling to look at his/her situation from different angles. We have bigger things to worry about right now. To be very blunt, ovid's problem (real or not) is not our problem.

The silver lining of this thread for me is 30yrs advice to “keep your powder dry” to buy down the road. Being relatively committed to Manhattan, I am glad that 30yrs sees a future where it will make sense to buy. I would be significantly more pessimistic if his view was “take your capital forever elsewhere b/c NY is going to zero!”

Unfortunately ovid's powder isn't dry, it's tied up contractually as a down payment on a co-op. It would be one thing if the contract wasn't signed yet, I would absolutely advise re-negotiating or walking away and waiting. As I mentioned previously our advice to clients currently; lets wait 1 to 2 months and then reassess the situation. Unless of course you find a seller willing to accept a significant discount on a property you truly love.

I would really need to know the specific circumstances of a deal before I would advise anyone to walk away from a deposit of 10% on a home they may live in for 7 to 10 years. Whether the market will be up or down in 3 years, there are no guarantees. This situation is different, but many on this board thought the market would continue to crater in 2009, and offered similar advice to walk away from deposits. In hindsight, in most cases that wasn't good advice. And if anyone tells you they can guarantee one or the other, run, don't walk.

The big uncertainty right now is when will we get this in our rearview mirror and the wheels of the economy start to spin again. Until we have clarity on that all bets are off. But scientists and researchers are making good progress and one way or the other we will beat this.

And I certainly agree that when we get to that place in time, there will be a significant price reset from where we were last month. Exactly what it will be, I don't know. Many large financial institutions including Goldman Sachs believe the recovery will be a swift one once the virus is behind us. I hope they're right, because I don't want to see anybody suffer any longer. most people on this forum are probably in pretty good shape, but there are a lot of people flooding food banks that never thought that would ever be a possibility in their lives!

The economy collapsed because of a virus that no one was prepared for.

Best of luck to everyone and hope you're all hanging in there! This crisis is certainly brought out the best in a lot of people, a lot of inspiring stories out there. Wish there would have been another mechanism for finding the best in each and every one of us!

Keith
TBG

Wells Fargo is no longer doing jumbo loans.
Don't know your specific situation but if you are getting a jumbo loan to close, it probably won't happen.

Yeah, I definitely think ovid was getting 90% financing because that's all the money he had in the world to put up the contract deposit. At least he wouldn't be throwing good money after bad by throwing more money into the deal to close.

Right now, Goldman Sachs is predicting the stock market will melt down further.

Jeffrey Gundlach:
https://www.cnbc.com/2020/03/31/jeffrey-gundlach-says-the-coronavirus-sell-off-will-worsen-again-in-april-taking-out-the-march-low.html

@streetsmart - how does that work if buyer had a lock on a rate already for a specific apartment and is scheduled to close within specified period?

Just tried to find answer myself. This WSJ article suggests they are still doing jumbos for new purchases but not refinances? https://www.wsj.com/articles/wells-fargo-curtails-jumbo-loans-amid-market-turmoil-11586037701

I know streetsmart is in the business, so I defer to her, and I suppose any particular case would come down to specific documents that form entire agreement between the parties, but a bank's pulling mortgage that buyer was counting on could be devastating, partiuclarly where buyer has waived financing contingency.

@streetsmart I was referring to the trajectory of the recovery (when that happens).

Yes I know you were, but now many people are not so sure that will happen.

@MCR
Yes the article specifically says refinances, but it seems that the credit markets are in flux. Also Wells said they would no longer buy mortgages from third party mortgage banks which could be purchase loans.

For now I will have to assume according to this article which I believe came out over the weekend that they are still doing jumbo purchases, but I would have to check with my lenders on Monday and also if any underwriting procedures have changed.

During the financial crisis people who signed contracts to buy in new developments and put a down payment of least $100K and got a mortgage commitment were told by their lenders including all the major banks that they were reneging and purchasers lost their down payment.
I would have to check it this was for all loans. But I will as it is relevant. But then again the banks were in bad shape. I would think it was probably for jumbo loan as investors were probably backing out.
Now I also read that the Federal Reserve is buying MBS. But have to check how that is effecting the market.

I myself was thinking of signing a contract to buy pre construction at Riverhouse in BPC.
What a mistake that would have been.

@MCR I would have to check on the rate lock issue.
I am literally get swamped with notices from lenders as to policy changes.
A few lenders are no longer doing HELOCS even if they have the first mortgage.

Looks like FHA mortgage lenders have an out even where there was a lock per this article, with pertinent excerpt below: https://www.forbes.com/sites/alyyale/2020/04/03/thanks-to-covid-19-fha-mortgage-lending-gets-stricter/#6eb9733c3d26

"The result is a mortgage market that essentially shuts out buyers (and existing homeowners) who don’t have sterling credit. It also throws off in-progress loans like Paulino’s. (He was even told that some already-closed loans would no longer be funded due to the change—though his loan officer declined to confirm this).

“Folks like me—who are simply waiting to close on their home loans—are being dropped out of the blue because investors don’t want to pay,” Paulino said. “I understand that a lot of people are going to miss payments and investors have a right to be concerned, but I thought the fact that this was an FHA loan, that this would serve as a safety net for investors in the event that I or anyone would default due to the current situation. I guess not.”

Take a look back at how many people lost their deposits in just one building in Chelsea because they were unable to close (and I'm using that "take a look" term very loosely because I don't know where you would "look" but I know several personally who walked away from some pretty large deposits)
https://streeteasy.com/building/100-11-avenue-new_york

And remember financing new construction purchases with much longer closing timeframes is a different animal than relatively short resale purchases.

agreed 30 years, but some signed contacts with loans were also canceled with the same timeframe as a standard purchase.

@MCR, have to get back on the FHA issue, have received many updates on FHA loans.

>> Many large financial institutions including Goldman Sachs believe the recovery will be a swift one once the virus is behind us.

I think the trouble is when it’ll be behind us. The measures put in place in NYC have dealt with the exponential growth problem. We are running at ~4K confirmed cases per day. The medical system cannot really handle a higher rate (it is barely able to handle this rate). So you take the lid off the measures, you get into big trouble.

So how long does it take to get to a vaccine and start getting herd immunity? A year-ish. How long does it take to go through 4K cases a day until the entire population has gotten it, with some non-catastrophic degree of health care? Assuming 4K confirmed cases means (say) 20K cases unconfirmed / asymptomatic / naturally immune, that still works out to a year-ish.

We’ll get better at testing, the degree of measures for the degree of cases, Immunity, etc. It’ll ebb and flow, but no matter without a magic bullet on the horizon, it’s looking to be a long slog before we are “back to normal”.

The “30 Day” story from the White House is what is necessary for this month, but it also serves to acclimate everyone for what’s likely ahead.

This is a good article on the Fed buying MBS.
But it was written on March 23 which these days is a very long time ago.

Article seems to indicate it may not be enough.

https://www.barrons.com/articles/mortgage-backed-securities-get-hammered-feds-move-may-not-be-enough-51584980932

streetsmart,
What are you seeing with cash-out refis right now? I ask because I think that's where the biggest risk is right now (i.e. that they are really unintended sales to banks if the system isn't careful).

@Inonada - So great to see you back here. I just told my husband that you were back and he said, "hey, what's that guy doing with his portfolio - let's just do that." I said I'd ask.

So, any advice welcome (though to be perfectly honest, we probably don't have the guts to take it; we are just putting our heads in the sand and hoping our conservative portfolio maintains some value at the end of the day).

For the record, Wells is still doing jumbo refis, but they have been pulling back from the market by hiking rates faster than others and tightening the UW box. They wouldn't be my go-to choice at the moment unless I had a relationship with them.

Some other banks are quietly tightening up. One bank is lowering their NY LTV max by 5-10% in NYC because they expect a big drop in property prices here.

Agree Nada, hence "The big uncertainty right now is when will we get this in our rearview mirror and the wheels of the economy start to spin again. Until we have clarity on that all bets are off. "

I still don't understand how they can print the amount of money that appears is going to be necessary and yet cause zero inflation.

"Chef David Chang estimates that “90 percent of restaurants” will not reopen when this passes; he surmises the food world will return to the pre-internet days of the 1990s, before diversity was introduced into food."

https://www.vulture.com/_pages/ck8ivxorc0000yeyerntsmxxj.html

Please write more on inflation, someone! Let's say that a buyer has been in contract to purchase a coop in cash since January. No mortgage. Closing date has come and gone. Not buyer's fault. Not really seller's fault, either, but more so. Should the buyer continue with the purchase or get out of it? On the one hand, there's risk of falling home prices. On the other, there's risk of inflation.

Keith, I should have been more clear. I was questioning the premise of the “swift recovery” prediction from GS et. al. If this is virus is behind us come (say) May, then I can see the swift recovery. It’s only a couple of months of reduced GDP with enough stimulus to keep everything afloat. Make that a year, and the feedback effects do so much economic damage that it makes it very hard for anything to happen swiftly. It’ll all eventually come back, but it won’t be swift.

Nada, What low are you calling in SPX in the next 3 months?

MCR, I sure wouldn’t recommend you doing anything based on my random thoughts and motivations in life, so I don’t have any advice. However, I am happy to share my personal actions & thoughts.

After being heavily invested all decade, we sold all our stock holdings in 2018 and haven’t been invested in stocks since. Most of the motivation was because valuations seemed rich, with a bit of boost from the fact that the sale was effectively tax-free due to a charitable element of what we were doing. Currently, we are ~55% alternatives & ~45% cash. The cash build-up has been intentional, waiting to be invested at a time when some investment opportunity looked more attractive.

So are things attractive to me with S&P 500 at ~2500? Somewhat: I think that’s a decent price based on long-term valuations. All else being equal, I shouldn’t be at 0% stocks at that level; some of that cash should have moved over. However, given the situation I am waiting for a better price, something like ~2000, because I think there’s a decent chance we’ll see it. It may not happen, but so be it. If I’m staring at 2500 several months from now, I can pull the trigger then. If I’m staring at 3000, it’ll feel rich and I won’t invest.

At the end of the day, these aren’t predictions about where the market is headed. I can neither predict nor control that. I can, however, control how much of my cash is put into the market when different valuations are presented. The cheaper the price, the more I should be invested; the more expensive, the less.

300, I have no idea beyond what the market says. VIX is saying ~3% daily volatility. What is the expected / most likely minimum a random walk would see with 3 months of 3% daily volatility?

Thanks. I think you answered my question in your previous post. SPX 2000.

I just ran the calc. Using 3-month VIX at 45, Mr. Market’s says expected value of minimum over next 3 months is ~2100. So my saying “decent chance of 2000” isn’t really me calling a market low, it’s the market’s opinion about the market low.

Ha. I think automatic calculator is built into your brain.

Nada - Thks for the info. And again, so glad you and 300_mercer are at it again because never listening to two people who “get” financial markets speak among themselves never ceases to intrigue me. I am a linguist by hobby and am not a complete analytical dummy, but for the life of me, I just don’t understand. My husband was laughing at me as I tried, and said “has the phrase ‘inverted yield curve’ come out? That’s when I usually tune out of any conversation between those types when they really get going.”

And w/r/t alternatives, we get pitched those frequently but generally steer clear because we just don’t “get” what is being pitched to us and have no way of knowing whether the individual on the other end of the pitch is Bernie Madoff-like or David Einhorn-like. Further to my point of not trusting that stuff, the shareholder in our building who makes me the most uncomfortable is a CLO fund manager who has no problem leveraging the building to the hilt. As much as I try to understand those things, they just scare me. From what I read, depending on the skill and luck of the manager, this crisis will either render the manager private-island-rich or bankrupt. Rooting for our fellow shareholder because he controls a large number of shares, but going back to legal discrimination, truth be told, I’d rather not have the building’s financial stability tied to this guy.

Thanks for the commentary and clarification nada. What the actual recovery in equity markets looks like, personally I have no clue. I'm pretty much a dummy when it comes to investing. However I've been taking cues from Dan Sullivan (The Chartist Newsletter) for the last approximately 15 years. Nothing's perfect but I've done well heeding his advice. pulling all of my personal money out of the market about 7 months ago, was more of an emotional decision, loosely based on your more analytical decision, lol. I had a good run for the last eight or nine years and didn't feel I needed to be fully invested. My sleep index went up significantly!

Nada,

Curious if you think there are any segments of the market that have become investable (cheap) at this point? Oil (Chevron, exo), REITs, auto(f)..

ovid, maybe the real-estate-robots can give you better advice if you can tell us more about your deal, was it near asking or at -30% discount etc?

ovid, just curious, did you foresee this (C)ovid situation 10 years ago?

MCR, I broadly agree with your sentiment on alternatives.

Keith, 7 months ago? You sold too soon (look up quote from Baruch & others to understand). There are probably segments that are better, but I haven’t really been studying up. If / when the time comes, I’ll do some studying but I feel my time is better spent on my day job & life until then.

multi, conservative is the way to go right now. I'm down a little over 20% right now and consider myself lucky.
Searching the dim recesses of my mind I think it was ovid that had a stabilized penthouse in NoMad and was in contract for a condo in NJ. Much dithering and drama. So it's either a regular poster here (doubtful), some lurker that used to post here (possible) or some nutjob from Curbed etc. from whence there are aplenty.

I kept my retirement funds fully invested which is more of a significant part of my savings. However when my guy went 75% cash, I also did, maybe down around 7% now?? We're not talking about a great deal of money here on the personal side! However I had a good nine year run.

I've been in agreement with those who believed we would re-test the lows, perhaps this month. But who knows with Mr. Market, he can be a very fickle and unpredictable character.

As usual, there's quite a divergent number of opinions out there regarding which way things are going to go. I found somebody with a methodology that has worked for me and has been working for him since about 1969. So I prefer to focus on my work and my life and let someone else assist me with my finances.

Was just curious about the oil sector, more coffee talk than actual investment advice.

Keith

I just got off the phone with the professional who actively manages a portion of our investments and gave him the green light to go to town on whatever he wants to do (we are buying gold! but as portion of some commodity fund that gives exposure to more than just gold). We like to compare his performance with our VBIAX holding, and so far the fees we have spent on active manager have been a wash. Nevertheless, we like having a check on our passive investment strategy and enjoy hearing the macro economic analysis that comes out of the firm. My favorite part of every call is when the guy asks me if I have any questions. I just say no because I never understand enough of what he has said to even ask an intelligent question.

On the alternatives front, we have only ever done one, and that one hit it out of the park - too good to be true (we only did small amount, so hitting it out of the park did not result in great amount of money in absolute terms). I keep those gains sectioned off because that investment has still not wound down after 17 years, and I am just waiting for the day I read the news that the manager has been arrested for a giant ponzi scheme, and they are clawing back distributions wherever they can find them.

These are two noteworthy articles:

https://www.cnbc.com/2020/04/06/coronavirus-update-a-v-shaped-economic-recovery-getting-less-likely.html

https://www.politico.com/news/2020/04/06/economic-warnings-mount-coronavirus-damage-169217

Anton. Whatever do you mean?

So, we are in the midst of trying to close a sale that went into contract pre-Corona. The hold-up has been the board interview because our board couldn’t decide between Zoom or waiting for in person. As the sellers, we have no problem putting the whole thing on hold, but the buyers are anxious to close for reasons that escape me (because it’s not like they can move in until building lifts those restrictions), and I don’t think they are homeless in the interim based on their board package. But all of that aside, interview has now been scheduled pending review of updated financials, so it seems to me that any buyer who wanted out could submit updated financials that paint a bleak picture to tank their own deal. Were our buyers to take that route, I’d be zen about it because I’d rather not have someone in the building who really does not want to be there. I suspect my reaction would be different were we not staying in the building.