Concern for 2009 as Manhattan Real Estate Market Slows

key word sky is falling number 5 is erode--not crash...the market will certainly go down but the question is how much and for how long...i am guessing 10-20% over the next year or two in luxury condo market then flat for a few years and then up again OR flat then down 10-20% then up again...there is still too many people who want to buy in the manhattan luxury condos market for there to be a crash, in my opinion

"there is still too many people who want to buy in the manhattan luxury condos market for there to be a crash, in my opinion"

Cheetah - is this just a finger in the air opinion, or based on some salient facts/observations? Serious question.

"there [are] still too many people who want to buy in the manhattan luxury condos market for there to be a crash."

Right. Just, at what price?

"i am guessing 10-20% over the next year or two in luxury condo market then flat for a few years and then up again OR flat then down 10-20% then up again"

Based on what do you guess this?

there are also many people that will want to sell due to job insecurity, economic uncertainty, and individual distress

"key word sky is falling number 5 is erode--not crash"

what do you expect him to say?? his coffers are lined by prudential douglas elliman and he's an appraiser - clearly an unbiased party!!

Here's the part of the prediction I agree with the most:

“You will start to see a softening in prices over the next two quarters, but it’s not going to be dramatic,” said Pamela Liebman, chief executive of the Corcoran Group. “The predictions of a full-scale drop in New York will not happen.”

Anytime Pammy predicts something, I invest in it. She's a oracle.

OK, probably a dumb question, but where's the StreetEasy report referenced in the NYT atricle?

"Some buyers have grown so concerned that they started to back out of deals. In September, the number of New Yorkers who canceled contracts jumped by nearly 40 percent, affecting 130 contracts, according to the real estate Web site StreetEasy.com, which also released a report."

Brokers care more about volume than prices. The shortage of transactions hurts more than a drop in prices.

every crash starts with "erosion." wishful thinking.

As a cross-check with the stock market, SLG (big NYC office owner) stock is down to late-2004 levels. This is about as good a proxy I can think of for NYC commercial prices.

i aint a broker. I just am waiting like everyone else to see what happens and will likely buy in the next year or two. However, when I buy I am going to stay there for about 7 years minimum because I am not looking at real estate even in NYC as a short term investment.

I just don't think a crash is likely. My opinion is based on the fact that structurally things are different then back in 1987/1989 and that will still be the case 2 years from now. NYC is VERY VERY different than what it was 20 years ago. In fact where I am living now, union square, was still considered a dangerous area! East Village was extremely dirty, unsafe, etc. The city wasn't not being run the way it has the last 10 years. Finally, inventory is not expected to rise as dramatically as in the early 1990s. Things are just very different.

Steve - I cannot tell if you were being serious or sarcastic about Pam Liebman. Do you find her analysis usefule or not so much?

"Steve - I cannot tell if you were being serious or sarcastic about Pam Liebman."

going to go out on a limb here and say there was some pretty heavy sarcasm.

Quick question: the article points to a Corcoran reference of inventory at 10,761 in Manhattan. How do I reconcile that with the 8,000+ number I've seen on the inventory threads here that are based on streeteasy data? Does anyone know which is more correct and which one I should pay attention to?

Ha! That's what I thought. I just wanted to make sure I wasn't losing my mind.

"How do I reconcile that with the 8,000+ number I've seen on the inventory threads here that are based on streeteasy data? Does anyone know which is more correct and which one I should pay attention to?"

Special_K, Urbandigs has a inventory widget on the front page of his site that is powered by streeteasy. It eliminates duplicate and crap listings among other things. I think it is the most accurate. The 10761 number is way off.

> ...i am guessing 10-20% over the next year

We're already at 12% with months to go THIS year, so I think that might be a little bit of wishful thinking...

"Pam Liebman"

Never believe what a salesperson has to say. Didn't they just predict no effect on downtown prices because the Martians were swooping in?

Or maybe it was the Dutch and Belgians, whose beloved Fortis just went under.

Or the Irish, who just guaranteed all their bank deposits.

Or the Spanish, whose property prices are plummeting.

Or the Germans, who just seized a mortgage lender and a major bank.

Or the British, who ditto.

Or the French, whose president is calling an emergency meeting over the weekend to discuss the banking system.

Or the Chinese, whose stock market is down 65% in a year.

All I can say is - PLEEZE.

Take a look at 20 pine. Want to see a "prime" downtown building getting its ass kicked?

You can rent those things out for like pennies on the (buying) dollar...

> I just don't think a crash is likely. My opinion is based on the fact that structurally things are
> different then back in 1987/1989 and that will still be the case 2 years from now. NYC is VERY VERY
> different than what it was 20 years ago.

Absolutely. But prices are VERY VERY VERY different. You don't need a return to 1987 to get 2001 prices.... particularly with Wall Street in the shitter. Thats how markets work. You don't need something to go to BAD to lose value. Going from great to pretty good can mean a substantial decline if something doesn't meet expectations. Same reason companies can announce a loss but prices go up because loss was less than expected... or why a big profit can reduce stock price because even more profit was expected.

> Finally, inventory is not expected to rise as dramatically as in the early 1990s.

Much of the inventory rise were co-op conversions. Basically, it was almost meaningless as it applies to this discussion. Long-term renters became owners. It wasn't a billion new apartments built, it was apartments primarily just changing specs.

Also, back to the original point, even if actual inventory doesn't rise as much, it doesn't have to. We are nowhere near 1990 prices. If we went just halfway there, that would destroy returns... hell, 20% of the way.

nyc1 whatever...again i am not talking about the past year prices wise i am talking about now going forward. Again I think it will go down 10-20% over the nexct year or two from where we are now...end of 3rd quarter. not from where we were way back in January 2008. To me that is irrelevant if one is going to buy now or in the next year or two. Presumably if you buy now you build in the benefit of the decrease in the market up until now correct?

NY is very different now - a lot more people want to live here- but I don't think it can be discounted that there are SO many nice neighborhoods now to pick from. In that sense alone, there is a lot more inventory.

Also, as somebody else said, NY was a nice place in 2001-2002 .... and prices were lower then ... on what fundamentals have they gone up? For a while, it was a wall street boom .. but that's over, as is the ability to get cheap financing as is the ability for foreign buyers to buy (look at other economies and where the euro, pound, etc. have gone).

Rents are higher now than they were in 2000-2002 - an agressive estimate would be 30% increase in rents... but prices have doubled .... far outpacing the increase in rental prices. Plus, I could easily envision rental prices falling further; NY time indicated that they've already fallen 5% or so ...

> Again I think it will go down 10-20% over the nexct year or two from where we are now...end of 3rd > quarter. not from where we were way back in January 2008

OK, so you're saying about 20-30% drop off peak. I think I'm in the same boat as you. I'm pretty sure we'll hit 20% (if we haven't already), then its a matter of how long till we're out of the economic mess... but, in any case, I think we have at least a year before prices stop declining.

"a lot more people want to live here"

at what price?