Inventory increases over 20% in a little over one month?

Hit up the 3 month chart once you get to the below link to see the late September (7,000) to today's (8,499) inventory numbers, quite astounding:
http://www.urbandigs./charts.html

hmmm - try this one:
http://www.urbandigs.com/charts.html

I believe there is a normal seasonal pop in autumn listings versus summer listings.

Late spring is normally the biggest listing/selling season followed by the autumn.

I think the more relevant increase is versus numbers prevailing in May/June in which case listings are up ~10%. Nice increase in inventory - but not spectacular.

Too bad UD doesn't show 12-month figures currently as that would probably be the more relevant figure. I'm guessing they are building up their data base.

I will..working on it..I have data back to last NOV but Im not using my last programmer. I have a better guy who is busy for next 3-4 weeks but will enhance charts later

yes there is seasonal uptick but not as sig as what we expereinced if you go back past 5 years

"I believe there is a normal seasonal pop in autumn listings versus summer listings."

Not the 6-month figure. The 12-month figure is even worse - I believe inventory was around 5,500 this time last year, which would be a 54% increase if I'm correct.

Reports say JPM bonuses down 30%-50% - for those who still have a job. 3,000 of LEH's staff getting the ax; the ones who got the ax before aren't getting their promised severance as they are being included as unsecured creditors in the bankruptcy estate. Most of Wachovia's investment banking operations will be closed because WFC doesn't want to own an investment bank. BAC's purchase of MER will decimate staff levels, move lots of them to cheaper Charlotte (no need to have a trading desk here). Goldman and Morgan Stanley are cutting, cutting, cutting.

And the type of inventory available is all aimed at the same market - investment bankers with big bonuses.

Bernake finally caught on how investment bankers make money - creating a bubble, then popping it. Let's see: Asian currency, dot.com, housing, CDS's. Only this time they got caught up in the bubble because they thought they'd transferred the risk through securitization, but didn't.

Dudes - never again will this happen. If the country goes into a recession, NYC is going to go into a depression.

Topper - to put it into context, at historic rates 8,500 is a one-year supply of apartments. There is plenty more under development and plenty more developed but not released. Demand has stopped dead in its tracks. IMHO ou are looking at a 2-year supply of apartments at today's absorption rates.

believe its actually 21.4%. Is that a big deal?

so the answer to you dmag is no..it's not a big deal

"so the answer to you dmag is no..it's not a big deal"

1-year+ supply. Not a big deal.

Ok.

JM - "Inventory is now greater than last year, but lower than 2 years ago.

from urbandigs conference.....J Miller of Miller Samuel

ya Stevejhx (see below) now THAT! is a big f'n deal my negative, pessimist.

http://www.millersamuel.com/charts/gallery-view.php?ViewNode=1132752161iuzhS&Record=6

steveF, that chart you link to is not inventory. It is total number of new units entering the market, and the recent figures are "estimates."

The listing figure at the end of the 3rd quarter 2007 was 5,204 according to Miller Samuel. According to Miller Samuel it was 7,003 at the 3rd quarter 2008, which is approximately a 35% YOY increase. And Miller Samuel is a real-estate appraisal company and the survey is paid for by Douglas Elliman. I trust streeteasy's numbers more.

Two years ago the figure was 7,600.

Now then - let's look at:

a) likely absorption rates
b) the cost and availability of credit
c) overall incomes
d) new development not listed or not yet ready.

Those are forward-looking indicators, and they are GRIM.

Spin Doctor steve..you trust newcomer Streeteasy more than established firm Miller Samuel?? what are you nuts??...and your numbers point that it is NOT a big deal...LOOK AT THOSE NUMBER OF NEW UNITS ENTERING THE MARKET!! 25k-30k for 3 YEARS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! sorry i had to yell but some people are just so ridiculous.

"sorry i had to yell but some people are just so ridiculous."

i agree, some people are ridiculous but i don't think its sjhx. how can you say that a 1 year inventory is not a big deal? and that a 20%+ increase in the last 6 weeks is not a big deal? that's a huge increase if it was yoy and it was in 6 weeks! to give some perspective, overall us inventory has been hovering between 10-11 months and we all know where pricing is going nationwide. my guess is manhattan could reach 10,000 inventory possibly by thanksgiving and definitely by year-end.

listen, i understand you are probalby long real estate and certainly a bull. as long as you don't care about the mark-to-market and can afford your place, maybe you don't want to sell. fine. but at least make that decision without blinders on. when an ostrich puts his head in the sand, the lion hunting him doesn't go away.

steve, "Goldman and Morgan Stanley are cutting, cutting, cutting."

You forgot to add the layoffs at Citi that were just announced.
Also, see page one of New York Law Journal, Wednesday, Oct 15, '08.
Headline looks mild enough, but read the entire article.
I'm only pointing this out to you as opposed to others, because
you like this kind of stuff, whereas optimists don't want to
hear it.

steveF

Seems to me that that Miller Samuel chart is pretty ancient - looks like it might have been created in 2006. So "estimates" for 2007 and 2008 are probably reasonably inaccurate.

What has disturbed me about the chart which I've seen before is how low the new supply "seems" to be versus the new supply we saw coming on line in the late eighties. I'm guessing that most of the eighties "supply" was actually not "new" supply but rather simply conversions. I'm guessing that the market dynamics for "conversions" are much different from actual new "construction."

Thanks for the stats on Q7 2007, Steve. That's pretty striking.

"Goldman and Morgan Stanley are cutting, cutting, cutting."

I have seen no evidence of this, in fact MS has said quite the opposite.

unnamed, you are dead wrong. MS has been quietly cutting and/or relocating departments all this year. Nothing huge and attention-getting - yet.

MS is adding specific high performance people from other firms, cutting everybody else.

"LOOK AT THOSE NUMBER OF NEW UNITS ENTERING THE MARKET!! 25k-30k for 3 YEARS!"

SteveF, Topper is right: you don't know what you're talking about. The bulk of those units in the 80's were co-op conversions - the units were listed for sale whether or not the rent-regulated tenant took up the offer. I posted the number of co-op conversions in those years on another thread months ago.

The fact is that we now have more than a one-year supply of apartments on the market, rising inventories, falling incomes, locked-up credit.

50% fall in prices.

stevejhx..and Topper your wrong...but that's your problem....we are a 1000X more likely to be 5-10% higher in a year or 2 than 50% lower...this credit crunch has been going on for 15 months..that's 15 months and counting of sideline buyers waiting to pounce...plus all the bank hoarded, Fed provided massive liquidity soon to be loaned out will fire up sales and inflation...remember inflation is good for real estate.

Credit markets Libor and Ted spread are already loosening up pretty quickly...that's the first step.....

http://www.cnbc.com/id/27236827

credit markets...

Stevef:

Given your confidence you may want to go long New York (admittedly "metro area") housing futures on the CME. The two-year market is trading at about a 15% "discount" to current prices. This could be a great opportunity for you to pick up some residential real estate on the cheap - and with nice leverage!

Topper...why roll the dice to some half-as-ed futures market when I am building wealth owning with no work, other than just collecting rent checks. Which is direct deposited anyway.

Brilliant!

steveF, you're so out of your league:

Boom looms for co-op conversion
Real Estate Weekly, Feb 11, 1998 by Lois Weiss

"In 1987, during the heyday of the last cycle, the New York State Attorney General's office accepted 1,361 [conversion] plans statewide. In 1997, they accepted 154.

"In Manhattan, the only county for which a breakout was available, 50 plans were accepted in 1987. Last year, only eight plans were accepted - and they were all condominiums.

"According to Dept. of Finance records, however, there were 28 more cooperative buildings on the 1999 tentative assessment roll than the year before, bringing the number citywide to 2,352 cooperative buildings. (That number does not include approximately 1,800 two- to 10-unit co-op, condo and cond-op buildings, or the approximately 43,000 condominium units.)

"Finance records also show 28 more cooperatives in Manhattan, nine more co-ops in The Bronx, 10 more in Brooklyn and 11 more in Queens.

"But if certain changes aren't made in Albany [see sidebar] the newest cooperators could find themselves tackling issues that are still plaguing the 1980s' pioneers.

"Still, with only 15 percent of the apartments required to buy in order to effectuate a non-eviction plan, savvy owners would be able to convert, and then choose to rent at market rents or sell those other units that later become vacant."

http://findarticles.com/p/articles/mi_m3601/is_/ai_20476366

Homeownership At Record Level For New Yorkers

By THOMAS J. LUECK
Published: June 10, 1991

"The report confirms other studies by the city and state showing that the biggest surge came in ownership of apartments, both co-ops and condominiums, in new buildings as well as those converted from rentals. Construction and conversion reached a peak between 1984 and 1988, then ground to a virtual standstill as the city's economy slumped in the wake of the 1987 stock market collapse."

http://query.nytimes.com/gst/fullpage.html?res=9D0CEFD91E3AF933A25755C0A967958260&sec=&spon=&pagewanted=all

I could go on and on and on and on. Yes there was a lot of new construction because of subsidies, but there were tens of thousands of co-ops converted, of which only 15% of residents needed to agree to approve a noneviction plan.

Facts are facts: we're facing the exact same thing now:

New Building Applications Spike in '08--Sign of Development Apocalypse?
by Dana Rubinstein | June 3, 2008

Doom-and-gloom credit crisis notwithstanding, developers requested city approval to build substantially more new buildings in the first four months of this year than in the same period last year, according to Department of Buildings statistics.

We know. It’s a little startling, given the Bear Stearns bailout, rising construction costs and the difficulty in getting credit.

Yet during the first four months of 2008, there were 98 applications for new Manhattan building permits, a 46 percent increase over the same period in 2007, when there were 67.

http://www.observer.com/2008/new-building-applications-spike-08-sign-development-apocalypse

Brilliant!
yes...so easy all you need is time....Warren Buffet would be proud.

So, 50 conversion plans in 1987, 98 building permit applications in 2008.

Deja-vu all over again.

Thanks for the interesting references, Steve. You are quite the collector.

Topper, they're just so easy to find!

What, no rebuttal from steveF, with the appropriate references? No LICC to tell me I'm wrong? Petrfitz? (Oh, they're blocked anyhow!)

Topper...your welcome....you've brought up some fine points also.

The market is heavily inflated, if you are in the market to sell and have a willing buyer, set a realistic price and pull the trigger. The supply will far out weigh demand for the next 6 - 12 months.

"we are a 1000X more likely to be 5-10% higher in a year or 2 than 50% lower"

SteveF, I'll take that bet. If in 2 years prices are up 5% from 2007 peak, I owe you $500. If they are down 50%, you owe me $500,000. If neither happens, no money changes hands. Deal?

I know there's nuances in measuring the drop or increase, but if you agree on the bet in concept, I am sure we can agree on methodology.

Bets?

Where's weasel-boy malraux?

steveF - you see the figures from the 80's. Contradict with facts, if you can. Because for the most part, since they were co-op conversions, only 15% of those units were actually "for sale."

We're right there, but worse, given the extraordinary run-up in prices over the past 5 years, the lack of credit, & mostly the lack of anybody who makes enough money to buy these units.

LICC, Sneaky, help me here!

Don't forget that at the time, 1996-2001 seemed like an extraordinary run-up in prices too.
Barring some tentativeness post 9.11 it's been an uninterrupted climb for a dozen years.

newbuyer... you are either wishing really hard because of your new purchase OR you don't have a tv or access to a newspaper. good luck

Hey GoingDown, I think you got it wrong, newbuyer seems to think the market is going down, hence his bet that the market goes down by 50%.

hey newbuyer waiting since '99 to buy...the median for 3Q 2008 is already higher by 5% yoy from 2007. So you've already lost that bet. I luv how stevejhx throws out 50% fall, ya know what I say....50% higher in 5 years!....... You negative, paralyzed by fear, pathetic people who are hoping for a crash to vindicate yourselves are....well....sorry to say...L-O-S-E-R-S. You guys are on these boards huddling together in your false hope for a crash when you should be hanging around positive, entreprenure types who are doers. This nation was built on doers not doomsayers. Hope this helps convert some of you, misery luvs company, types to W-I-N-N-E-R-S. You'll live longer and better..:)

"pathetic people who are hoping for a crash to vindicate yourselves are....well....sorry to say...L-O-S-E-R-S"

That's a useful post. Now, steveF, why don't you address the questions, instead of posting this.

"Don't forget that at the time, 1996-2001 seemed like an extraordinary run-up in prices too."

It wasn't, though, because the ratio of rents to housing prices remained within the historical band. Only in 2003 did it start to rise astronomically. I posted a chart the other day.

steveF, I think you're missing something. When stevehjx throws out 50% falls, or 30% or 15%, it's not that he's paralyzed with fear. That's where he believes his entrepreneurial, winning opportunity will lie. My only quibble with that attitude towards life is that it presupposes the one possessing that contrarian spirit is going to be the JP Morgan type who has weathered the expected crash unlike what s/he perceives to be the losers. In other words, "I won't be a loser; other people will." Think of it as being a mirror image of yourself.

"Nattering nabobs of negativism," eh, SteveF?

http://online.barrons.com/article/SB122428347584046237.html?mod=b_hpp_9_0002_b_online_exclusives_weekend

steveF, I said in 2 years, i.e. october 2010. You in or not?

SteveF, you scared lil bunny, wouldja answer my questions already? Stop yer dodging!

1 - You DID buy within the last 12 months, didn't you? Tell the truth. Or do I have you confused with someone else (petrfitz or houser maybe).

2 - How long Manhattan real estate are you, by the way?

After you've answered my questions SteveF, I will also take bet you based on the odds you posted above. In other words, if you end up putting your money where your mouth is and bet newbuyer99, I want a piece.

If you don't put your money where your mouth is, well SteveF, you're probably just another broker or someone who bought recently, as I suspect, or just nothing at all.

> You guys are on these boards huddling together in your false hope for a crash when you should be
> hanging around positive, entreprenure types who are doers. This nation was built on doers not
> doomsayers

Dunno about you, but buying low and selling high is positive and builds wealth.

Buying high and then shitting yourself, then attacking everyone who has data that proves you wrong, is nothing to brag about either...

"I won't be a loser; other people will."

I already admitted to my losses, lowery - in the stock market. I do think I'll gain them back, but I admit they occurred.

"I already admitted to my losses, lowery - in the stock market. I do think I'll gain them back, but I admit they occurred."

The unnecessary losses that should never have occurred.

I saw there was some confusion about the math, but stevejhx it said you were now at $250K and previously you were at $5MM. How the hell would you get back to that level?

"The unnecessary losses that should never have occurred."

If I were omniscient, they wouldn't have occurred. But I'm not, so let it go. If you own stocks and didn't make losses recently, then you are in a very small minority.

"stevejhx it said you were now at $250K and previously you were at $5MM"

I was never worth $5 million, and never said I was. I am worth more than $250k however. Somewhere in between.

so back to your statement about how you are doing the same amount of work, getting the same amount of work earnings as usual, unaffected by the credit crisis, and how you know plenty of other people in the same boat..............

I think that is more or less one of the arguments made by people who disagree with your real estate down-spiral predictions, that there will still be plenty of other professions/professionals in Manhattan after Wall Street layoffs, and that Manhattan real estate will do just fine because of that.

And you've still lost on me on the "I'm in favor of a health Wall Street scene" statement as well. You mean as you've posted repeatedly in the past year that "Wall Street is in triage" you were doing so out of sympathy, not to support your argument that real estate is headed for a down cycle? What I was pointing out to you was that elected politicians are very sympathetic to Wall Street financial firms, and that includes our local Democratic senators. The whole world may be buzzing with "re-regulation" talk, but don't be so convinced that a Democratic Congess and White House necessarily stands for the massive overhauling of Wall Street that either most of them say today or that you and many paid talking heads envision. These are the same people who thought privatizing Social Security might not be such a bad idea, after all, and it wouldn't be difficult to convince a New York Senator of the wisdom of anything that puts more money in Wall Street financial firms' pockets, since it goes into their campaign funds and that campaign money makes them open to the notion that huge, spectacular profits on Wall Street are good for their less-wealthy New York constituents.

"I think that is more or less one of the arguments made by people who disagree with your real estate down-spiral predictions, that there will still be plenty of other professions/professionals in Manhattan after Wall Street layoffs, and that Manhattan real estate will do just fine because of that."

That is just wishful thinking. First off, Wall Street represents 1/3 of all city income *directly*. Indirectly, it could be 40-50% (city estimates 1-2 additional city jobs per wall street job).

But just think of what the next biggest employers are after wall street... there isn't a lot left that isn't hurting itself...

Lawyers - guess who paid their bills, layoffs started 6 months ago
Goverment - guess who paid *their* bills, they are going through multiple rounds of budget cuts
Arts - guess who did all the arts funding
Publishing - was in the crapper before the recession, getting decimated now. Tons of magazine closings, and the book industry is a shadow of its former self
Advertising - ad spending was down going back months
Healthcare - will do better than others, but government chops are going to go right there...
Education - public is government funded, private schools have had endowment hits and less government support
Small business - absolutely hurting from the credit crisis, corporate bankruptcies have *tripled*...

If it was Wall Street alone, we'd have huge problems. But the economy overall is toast...

Is it just me or is inventory growth accelerating? The charts on urbandigs are downright scary.

well, that too. Besides the fact that sales have slowed dramatically, 2008 is actually the peak residential building year, and 2009 will unfortunately be pretty close. The race to get started before the tax break expired is going to keep things bad gor a while (as will the crisis).

lowery, you sound so angry.

"how you are doing the same amount of work, getting the same amount of work earnings as usual, unaffected by the credit crisis, and how you know plenty of other people in the same boat"

Here's your fallacy, as succinctly as I can put it.

TOTAL INCOME = WHAT I MAKE + WHAT YOU MAKE + WHAT WALL STREET MAKES.

Wall Streets ceases making. Then:

TOTAL INCOME = WHAT I MAKE + WHAT YOU MAKE.

Nowhere in that equation is "What Wall Street Makes" compensated for. That's the problem. You and I are not suddenly going to start making more because Wall Street is making less. In the short- to medium-term, total income falls.

And as nyc10022 rightly points out, although you and I may not be directly affected by Wall Street incomes, others are, and will see their incomes fall as a result.

I don't know why that's so hard to understand.

Folks, no doubt that the economy is in the tank, but from what I can see, inventory is still relatively low compared to population, and as urbandigs points out, to what it is relative to a couple of years back. Given all the bad news, inventory will probably continue to tick up the next few months but gradual price decreases will start bringing it back down again by next summer.

We're going to bleed some population and some rich folks, but given that both Barclays, Wells Fargo and BOA are expanding in the area, and JPMorgan Chase will start growing again in the near future, I think any slump will be relatively short lived, but by shortlived I mean 6 months to a year.

So it's probably a good buyers market and will remain such for another year, but don't expect any major slashes in listed prices. It's going to be gradual and probably things will start moving back upwards in Spring 2010.

From what I can tell, you are seeing about 4 new listings come on the market every day for every 1 that goes into contract, on average. That seems to be translating to about 100 to 200 apartments per week day, less on the weekend. At that rate, inventory is increasing at about 10% per week, at these levels, and in about two months, should be double what it is today. That's a pretty big "tick up," assuming that the rate stays the same or higher.

I don't know that a 10% reduction in offering prices would actually stimulate ANY demand at this moment in time. Those who are waiting know they can offer 10% lower right now and get it. But they aren't.

Is today a better time to buy than yesterday? Absolutely. But I still don't see how you can justify buying right now knowing what is currently coming down the pipeline.

Wait - correction - Based on Urbandigs inventory numbers, the last 7 days has seen 5.45 new listings for every on that goes into contract, and 4.85 new listings to new contracts for the last 30 days. So, on top of everything, the acceleration in inventory build seems to be increasing at a rate of 12.4%, based on the last weeks and prior 30 days numbers.

steve, "You and I are not suddenly going to start making more because Wall Street is making less. In the short- to medium-term, total income falls."

I think you have been having a conversation with who you assume I am, without any basis for it.

I don't believe any of the things you have attributed to me.

I have said simply that you should not assume that a Democratic majority in Congress plus a Dem President equals exactly the prediction you're making.

You answered it with some oblique comment about liking or not liking Wall Street.

You have posted incessantly about the prices of New York residential income being tied to Wall Street incomes. I am suggesting to you that the counter argument many people have made to you is that Wall Street incomes do not alone determine the local economy or NYC real estate, and that you have essentially stated that very premise yourself. "I'm doing great, and so is everyone else I know."

I personally could not care less whether you make the same, less or the same. I do not care if Wall Street employees continue to make huge bonuses or go on welfare. I do think that New York real estate is linked to those big Wall Street bonuses, especially in Manhattan coops and new construction condos in and near Manhattan. I am pointing out to you that your predictions are based on one set of premises, and then you seem to contradict those premises. And then there's the odd thing about having predicted that all Wall Street firms will meet their doom and then for some reason Lehman's demise seems to have hurt your pocket somehow, which makes no sense.

I am not angry at you, nor at the stock market, nor at real estate. I am open minded about the future and think we are in a lousy period at present, so that most people will focus on the bad things going on, probably long past the point that they should.

"I am pointing out to you that your predictions are based on one set of premises, and then you seem to contradict those premises."

I have never contradicted those premises, but if you wish that I have, I shall let you believe such.

"And then there's the odd thing about having predicted that all Wall Street firms will meet their doom and then for some reason Lehman's demise seems to have hurt your pocket somehow, which makes no sense."

Failure is one thing, bankruptcy is another. There is a huge difference between what the government did with LEH and BSC. It is common knowledge that you can't let a bank go bankrupt because of all the counterparty risk involved. There are billions of dollars of money in Lehman in London that clients don't have access to, yet they have to post collateral on margin calls for money they don't have. The failure of Lehman did me harm, but that's not the problem. The problem is that it seriously aggravated a delicate economic situation, and may lead to a global recession.

"Inventory is still relatively low compared to population"

It doesn't matter what it is compared to population; it matters what it is compared to historical sales and current absorption rates, both of which indicate that there is over a year's supply on the market today.

"The failure of Lehman did me harm, but that's not the problem. The problem is that it seriously aggravated a delicate economic situation, and may lead to a global recession."

If it harmed you, then your predictions of disasters at large financial firms such as Lehman came true. Isn't this a little like the joke about the little boy who finally got kreplach and spit it out and said, "Ew! Kreplach!"??

I should probably answer how you framed our disagreement. If I am reading it correctly, what you are saying is that your income and mine and others' remains the same while Wall Street i-banks collapse and their incomes contract, and therefore the amount of money in the economy, ergo potentially buying real estate, decreases.

To answer it directly for you, I do not believe most people's incomes will remain constant. I certainly don't believe many people's incomes will actually INCREASE because of i-bankers' problems. Some very brilliant people will profit from it, but I am not in their league, and neither are you. Where you and I do part ways here is that I do not believe your income is immune. I don't believe my income is immune. I don't think most people's incomes are immune. If the shakeout from failing WS firms has no significant collateral damage on others not directly employed in WS firms, then that shakeout was not such a big deal. If that is truly the case, which is where you and I differ, then you are not going to get any significant decline in real estate prices, especially in Chelsea. If your premise that plenty of professionals go right on unscathed is true, then prices will stay level, at worst.

I won't attempt to convince you that your neck is next in this cycle, and I hope I would not do that to anyone, because it's malicious. But I do find it rather unseemly that someone who dwells so much on the disasters of the financial system and how they're going to bring down real estate prices would repeatedly remind/reassure himself publicly that "Well, this disaster hasn't hurt me..."

If you like to quiz restaurant owners/employees, dry cleaners, and cab drivers about "how ya doin'" as I do, I think you may find that they're not doin' so great these days, and that things started turning sour about a year ago. The reason certain people profit big-time in a crash scenario is precisely because a true crash is merciless, and takes nearly everyone down with it. Good luck with that.

I don't know if this is meant for me or not:

<"Inventory is still relatively low compared to population"
It doesn't matter what it is compared to population;>

It is not absorbing at all. Buyers have gone on strike. However, if I might DARE to suggest a counterargument to this, why do you and so many others automatically assume that from where we sit today we have only one direction to go, which is higher interest rates and increased difficulty qualifying and less capital? Oh, I know this is a laughable question to certain people here, but this is my point: any fool can see the Titanic is going to sink after it's already taken on too much water. Why has it never occurred to anyone that the Magical DC Solution To Our Mortgage Mess might be a new government program, for first-time homebuyers to buy properties with easy-to-get government secured mortgages at low rates with little money down?

Because that's what Fannie and Freddie were and they failed?

So what? Listen to the scared people in Washington and what they are saying. "The only solution is to turn the housing market around."

They might just throw yet MORE money into propping up the market.

ok, back to the point, does anybody not agree that inventory will double in 3 months if it keeps currently growing at 100-200 per day, and that rate of inventory growth is increasing by 12% per month? Does anyone think that this can cause prices to not decline by 30%?

lowery, I can't anymore. Sorry, but I can't. You've worn me out.

dmag, yes, I think we are still going to see rising inventory for the next three months, but it will slow down as we enter the holiday season. People don't list apts. from mid-Nov. until mid-January unless they absolutely have to.

stevejx you are not being geniune, you have stated you were worth $5MM and you achieved that by getting your 60% returns every year for 10 years and you started with $5MM.

Didn't you also throw out the $230K number?

Maybe it is time to take a bit of a breather in terms of advice. No, advice in one area isn't correlated to advice in another, but given your horrid performance in equities, I mean your losses of 95%, maybe get your own house in order before you tell others whether or not to buy or to rent?

stevejhx
5 minutes ago
ignore this person
report abuse lowery, I can't anymore. Sorry, but I can't. You've worn me out.

that's a joke, seriously!?! usually you quit when you can't support yourself.

If you are taking some time off, which I really think you owe streeteasy, then I truly wish you well

If on the other hand you are going to be instigator of 5 dozen posts in the next 24 hours, well, then finish up with lowery now or otherwise don't expect that your credibility ratings will improve.

"you have stated you were worth $5MM"

Never said that. You're confusing me with petrfitz.

"60% returns every year for 10 years"

That was true till this year. It will take time to recover.

"and you started with $5MM."

Never said that. My mother didn't graduate from high school, and my father grew up in the projects. All my family together - first, second, and third cousins - never had that much money. We invested in Tupperware.

"Didn't you also throw out the $230K number?"

Not that I remember.

dmag, i don't think inventory will double in 3 months. some of the rise in inventory we are seeing is seasonal as people list apartments after august vacation. however, seems most of it is cyclical given all the obvious turmoil. i agree w/ kas that listing growth should slow seasonally as we enter the holiday period, but my guess is that it will still grow sizeably. my gut feel is that 10k manhattan inventory leads to 10-15% price declines from here. 12-13k leads to 20-25%. this assumes that volume sits on the market for a bit so that sellers accept reality.

"lowery, I can't anymore. Sorry, but I can't. You've worn me out."

Truly, the most amazing thing I've ever read on this board. Congrats, lowery.

"You've worn me out. Truly, the most amazing thing I've ever read on this board."

Not for the reason you think, bjw. Because he keeps on ascribing things to me that I've never written, so I won't defend myself any further.

"Because he keeps on ascribing things to me that I've never written, so I won't defend myself any further."

Annoying, ain't it? I can relate though. God forbid I should express any doubt that RE is going down 50% in nominal terms, and immidiately the argument turns into how I think that RE can only go UP AND UP AND UP. Should I argue any point with any "bear" (for lack of a better term), then I am DEFINITELY saying: "buy now or be priced out FOREVERRRRRR!" or "foreigners will save us."

There can absolutely be no middle ground on this board.

BGaria..yes, there is a middle ground of common sense. Prices to be higher around 5-10% in 1 or 2 years.

BGaria: There's plenty of middle ground. Unfortunately, as with most topics, fringe elements tend to shout the loudest.

Though I'm a bear, I would never attempt to call the percentage the market is likely to drop - partly because I don't think there's such a thing as "the market". There's no reliable proxy index like the S&P or Wilshire (the existing indices are hobbled by sampling variations from quarter to quarter), and the individual assets aren't fungible like shares of stock. Typical prices might fall 50% from their peak ASKING levels - in some wacky cases, they already have. But the bid/ask spread on most of those listings was huge, so price cuts don't signify actual market movement.

What is currently happening, in terms of typical EXECUTION pricing, is very difficult to discern. What will happen in the future is even more obscure. We do know that inventory is rising, transaction volume has fallen sharply, and liquidity has dried up. Many of the pillars that pushed prices up so quickly have collapsed; and while some pillars are still standing, there are no new ones, and distressed sellers are in a tough spot. So the makings of a steep, swift drop are in place; that's as far as I would go, and I don't see much basis for disputing that basic bearish view.

steve, I didn't interpret it that way, but was just poking fun at the fact that you tired of the argument for a change. No bad intentions there - sorry if it sounded that way.

West81st, well said. I can't help but cringe sometimes when I see some posts here saying "the market's down 12%, so you've already lost that much equity in your home!" Some might point to Shiller as a reliable index, but as most of us know here, it doesn't really work in a city dominated by co-op and condo apartment buildings.

West81st...fungible...wow, i like that..you really are an aristocrat..what are you doing wasting your fungible time with us common folk? heh? I luv your line below....

So the makings of a steep, swift drop are in place; that's as far as I would go, and I don't see much basis for disputing that basic bearish view.

that's a far as i would go??..:)...dude, you took the reader to the last stop..funny.

"They might just throw yet MORE money into propping up the market."

Well, at least we've got an admission that the only thing that can possibly hold up the housing market is direct govt intervention. Barring this, look out below...

"fungible time"

Time is not fungible. It expires, yet is permanent.

Pretty philosophical, ha?

"distressed sellers are in a tough spot. So the makings of a steep, swift drop are in place"

Exactly correct; once the rate at which prices are falling begins to accelerate, sellers will start to panic, those who have been contemplating selling will rush to put their properties on the market, inventory will spike up, buyers will disappear (not wanting to catch the falling knife) and you will see prices plummet to well below what the "fundamentals" would seem to dictate. It happens with every bubble. You will see this unfold over the next year and a half.

steveF: OK, I'll play. Which of the following premises would you dispute:

1) Inventory is rising;
2) Transaction volume has fallen sharply;
3) Liquidity has dried up;
4) Many of the pillars that pushed prices up so quickly have collapsed;
5) While some pillars are still standing, there are no new ones;
6) Distressed sellers are in a tough spot.

Or do you accept all six premises, but disagree that they constitute the makings of a swift, steep drop? And if you disagree with that conclusion, why?

"I can't help but cringe sometimes when I see some posts here saying "the market's down 12%, so you've already lost that much equity in your home!" Some might point to Shiller as a reliable index, but as most of us know here, it doesn't really work in a city dominated by co-op and condo apartment buildings."

Except for the fact that it was clearly noted that the 12% stat was:
1) Miller-Samuel, not Case Shiller
2) Manhattan median (not metro as CS)
3) Primariy Co-ops and Condos

You might cringe less if you actually knew what the data was.
;-)

"Well, at least we've got an admission that the only thing that can possibly hold up the housing market is direct govt intervention. Barring this, look out below..."

Do you mean an admission from me? I don't think real estate in the Tri State area is headed anywhere but down or, at very best, flat in certain areas. But what I was referring to by the scared people in DC, what THEY are frightened of is the national picture, the homes in suburbs out in California, Florida, Nevada, etc. that are already down huge amounts. No one needs to admit that; it's been all over the news for a long time.

West,
# 1, and 2 where is your benchmark that your are basing your rising and falling on, that would help.
#3 liquidity is rapidly liquifying(nice huh)
and #4, 5 and 6 look pretty unfungible or disfungible to me. How can I debate something so fungless.

"Except for the fact that it was clearly noted that the 12% stat was:
1) Miller-Samuel, not Case Shiller
2) Manhattan median (not metro as CS)
3) Primariy Co-ops and Condos

You might cringe less if you actually knew what the data was."

nyc10022, I was NOT saying that the 12% data was from Case Shiller. Not sure how you conflated the two points there. Furthermore, in the rent comps thread, I pointed out to you that the StreetEasy AND Corcoran report do not show a 12% drop (and the StreetEasy report actually has median price UP over the last 2 quarters). That doesn't jive with your MO, I know, but that's what's out there, so let's not bandy that 12% figure as fact.

SteveF: Do you actually disagree with any of those six points, or are you just saying they can't be conclusively proven? (That's the last refuge of a beaten debater, and a familiar trick in the climate-change denial business.)

With regard to #3, I'm not aware of any evidence that fresh liquidity has reached the mortgage markets. If you're talking about the federal bailout money, the portion that might fund mortgages in NYC is a drop in the bucket compared to the liquidity that disappeared when securitization died.

West81st -

SteveF is incapable of debating your points. You will probably not hear from him again on this thread.