When will we hit bottom?

We don't all know we are heading for a 20-30% decline. Many say a greater decline. And it won't happen very soon -- "wishing and hoping and thinking and praying" is the nature of these down markets in real estate. I won't put a date to it, but note that the 1990 Manhattan bust (inspired by the 1987 stock market crash) didn't start turning around again until 2000.

Alan - Is that really true? One of the first (and I believe, only) books I bought on real estate before I started investing was a compendium of "Living In" reports from the Times published in book form. If I recall correctly, it was put together in the late 90s or very early '00s and contained snippets of the "Living In" section for several years prior. Again, if memory serves, in virtually every neighborhood in the NYC metro region, it talked about how prices had gone up markedly in recent years. My recollection is that already in the late 90s prices had skyrocketed - not, obviously to the level they would in the 10 years hence, but still substantially higher than they had been a decade earlier.

We all know nothing....alanhart is right we just don't know...i'd be happy with a 10-15% decline if it ever happens. i keep seeing new listings (one bedroom) priced very high and they're selling quickly.

Julia, 10-15% has happened. Check this site you will find up to 22% declines in the last 4 days.

We apparently had 17% median decline in the high end... and that was just through JUNE...

http://www.streeteasy.com/nyc/talk/discussion/5309-luxury-manhattan-apartments-slipped-17-percent

SomewhoKnows -- perhaps you're right. The history I stated is what I recall, but I can't find charts that bear it out. Certainly the ones I just looked at on millersamuel don't.

Someone - yes the late 90s had a large run up. I had a studio in the prime village with a doorman- in the early 90s it was worth 50K. It ran up and I sold it in 2000 for 200K a 35% premium of any studio in the building. Honestly we thought he run would have a rest. Currently it would go for around 400K but not for long. I didn't rebuy into the market bc we thought in 2000 that it was already overpriced. How wrong we were. Oh well- hope I get my chance a gain in 2 years

Someone - yes the late 90s had a large run up. I had a studio in the prime village with a doorman- in the early 90s it was worth 50K. It ran up and I sold it in 2000 for 200K a 35% premium of any studio in the building. Honestly we thought he run would have a rest. Currently it would go for around 400K but not for long. I didn't rebuy into the market bc we thought in 2000 that it was already overpriced. How wrong we were. Oh well- hope I get my chance a gain in 2 years

"My recollection is that already in the late 90s prices had skyrocketed - not, obviously to the level they would in the 10 years hence, but still substantially higher than they had been a decade earlier."

You're half right Someone...except by 1998 prices had recovered, nominally, to their 1988 levels. I know because I bought a 2-bedroom 1-bathroom Greenwich Village apartment in 1998 for $215,000, and that was the lowest price ever paid for that apartment since it went co-op in 1983. Now the price would be $1.3 million.

Right.

The price increase (doubled) from 1998 to 2003 did nothing but get prices back into line with 1988 inflation-adjusted prices. Prices then doubled (again) between 2003 and 2008.

You need to look at it in context of where prices had been to get a clear idea of where they are going.

Down.

The "it took ten years for prices to recover" was something I heard often in the late 90s. If we get anything like that, figure breaking even by 2020 is the new goal...

Riding out losses doesn't make them any less of a loss...

Oh the memories...
It's supply and demand folks, in slow motion. This is a one industry town and that industry has just laid the biggest egg in recorded history. They don't make enough wine swigging euro waving real estate buying turists to save the day. The big dinero wall street jobs and the jobs that serve them will shrink dramaticly over the next three years. Money will remain scarce and only available to those with deep liquid pockets and perfect credit.Do I have a crystal ball? No. Just an elementary economic education and the capacity to do research and analysis. The bottom...My guess...Summer 2010. It then stays down at equalibrium untill economic fortunes return. If your credit is not stellar, better get a move on.If your not hauling around a chunky chunk of change you might miss the greatest Manhattan real estate sale since the 1970s. Remember my friends, one man gathers what another man spills.

The "bottom" and "full rebound" are different. Obviously buyers care want to buy near the former and sellers want to sell closer to the latter.

Prices in NY peaked in 1988, fell dramatically from 1988-1992, trickled down a bit more in 1993 (but only a fraction-they were more or less flat, and began to increase in 1994, and returned to 1988 levels in 1998.

So prices did not decline for 10 years straight - they only fell for about 3-4 years (10% per year or so) - it's just that they did not reach their 1988 levels for 10 years.

I guess if you are a buyer that would imply prices will "bottom" by 2010 to 2011, if you believe, like I do, that prices have been flat to falling since the second half of 2007 (despite the mumbo jumbo real estate agents spin, the market started to turn last year), although I think 2009 will see a much bigger fall than 2008.

GoingDown is the new posting name for which well-know ultra-frequent poster?

"We all know we are heading for a 20%-30% decline in residential real estate market values in Manhattan, and it looks like that will happen very soon"

Where did you buy your crystal ball at. I need to go to the race track with you.

Hey spunky... Who needs a crystal ball. All you have to do is be able to read. Check this site. There are already sellers who have dropped their asking prices by 25%. And when they realize the well of buyer have dried up.... they will panic and go to 30% and possibly lower. Who needs a crystal ball when common sense is available. I wish you luck at the track alone.

lol--asking prices that are stupid to begin with. Any evidence of exact apt that sold a year or more ago and is now selling for less. Please provide examples of apts in Manhattan that sold for less in 2008 then in 2006. Mostly interested in West Village, GV, or Tribeca. I would like more than a dozen or so listing examples. Thanks in advance and looking forward to those examples.

Actually all you have to do is provide me with examples of listing today that are listed for less than what they sold for in 2007 or before. Must be exactly same apts not what you think are very similar.

zorter
1 day ago
ignore this person What Steve, DCO and others on this board have hoped for has finally come to pass. The fall of the real estate market took a sudden and abrupt turn though. I can hold my real estate for 10-15 years with a tennant paying my mortgage.My rental apartments aren't going out of business because some asshole wants do lend money to people who can't wipe their own ass. The funny thing is my tennants are in place for another year so I have lost nothing on my real estate holdings. I do not plan to sell for 7-10 years and every year I need one tennant to rent my apartments in white glove buildings. Thats not to say that rents can come skyrocketing down but I am fine today and will look at the rental market 1 year from now. All the bears got what they wished for except it bit them in the ass.How a financial expert like Steve could possibly lose money on stocks and me the idiot landlord lost nothing so far is beyond me.It will be a cold day in hell for me to turn away from real estate and put my money with a bunch of fools on Wall street to lose for me, be careful what you wish for.

On 7/21/08 the median price per square foot (asking price) for all Manhattan residences with an address was $1178. Today, the median price per square foot (asking price) for all Manhattan residences with an address is $1181. GoingDown, can you explain to me how you figure that prices have gone down 10-15%? Please people, don't start with the "mix issue" explanation. This is median price per square foot not median price.

Who cares what they are asking? Its what they are GETTING. Even the brokers have noted a whole lot of flexibility.

Also, the REBNY numbers said we were down 9% median through July. So, even if the numbers held still through July, thats still basically a 10% decline up to there...

Ask your grandma "When will we hit bottom" and stop crying!

"Julia, 10-15% has happened. Check this site you will find up to 22% declines in the last 4 days."

EWnyc10022, I was responding to this quote from GoingDown. In discussing 22% declines in 4 days, he is talking about asking prices. Further, why is it that you believe a 9% median DECREASE from REBNY but when there was an increase you said the median prices were skewed because of mix issues? Which one is it EWnyc10022? Why is that number credible now?