Anybody thinking that it's actually time to buy?

nope
January 2011

at the very earliest

the market could rebound by then? how much do you think prices in nyc will drop at the bottom?

I want to sell but not sure if now or later is better

I actually asked this question earlier in the week, as my lease is up in April of 09. I want to buy in the West Village, but I'm on the fence as to whether or not to renew my lease.

All things considered, I'm probably going to end up waiting one more year because:

1) Wall Street will still receieve the benefit of their '08 production. Headcount reductions (for those still employed) will occur at year end, and average packages will probably call for 3 months severance. That's too soon for real employment desperation to kick in, and too soon for the real estate market to absorb.

2) I want the reality of Morgan Stanley's / Goldman Sachs' newfound status as a bank holding companies to be priced into the market, and I actually think that it will take one full business cycle - complete with "normal" bonuses - for brokers and sellers to get it.

3) Divorces. With trying economic times, lots of couples are still in "we can live on love" mode, but that will likely come to an end when hubby starts to question wifey's expenditures. I figure with counseling and kids, people can hold it together with a Band-Aid for about 8 months tops. After that, they'll capitulate and unload their apartments at fire sale prices just to get away from each other.

4) I want to see how the crime dynamic plays out in NYC during a recession and budgetary cutbacks.

wow, what a sweetheart. did you leave out #5, you're waiting for a terrorist attack, out of decency or you just forgot?

Hmmm Patrick, strange speculation about the crash and divorce...

Inflation will get us out off this hole.

Ha ha. Just looking at it from a detached standpoint, and trying to anticpate the correction's timing, what could influence it, and all of the peripheral catalysts for the correction. Divorce will play a role in the NYC correction, as many people who live here got married under the "for better, or for even better" premise. With that said, if a couple's marriage is approaching the 6 year mark, is devoid of spontaneity, entails the presence of a large (big boned) wife, and a man no longer pulling mid-six figures, divorce is necessarily on the horizon.

sell sell sell

Thanks Patrick, you made me laugh. To answer the question, only buy if, you know you want to live in the place for several years, you have job security, and you found the place of your dreams. If that is true, then go in with a really low ball offer to test how desperate the seller is. If they counter, negotiate a very hard bargain, and if you are paying in cash, pretend like you need a mortgage contingency, and then remove that from the table for even more price concessions. This is a buyer's market, and will continue to be one for at least the next two to three years.

John Mack (Morgan Stanley CEO) is about a straight shooter as they come. This week, he stated that he sees a severe recession in 2009 and 2010. It's difficult to believe that an apt in a city whose economic fortunes are deeply reliant on the financial services industry can withstand this scenario. As mh23 stated, take your sweet time an negotiate hard.

If you look at the Manhattan commercial RE market, the stock market has reduced those valuations by over 50% in 1.5 years. That's a pretty scary adjustment is a very short period of time (the stock market adjusts to economic realities at blazing speeds vs residential). BTW, commercial & residential markets appreciated in parallel from the late 1990s - the first quarter 2007. Some more food for thought. :)

I am going to wait it out another six months. Check out the enormous price drops on this unit and there are many others like this popping up everyday. http://www.streeteasy.com/nyc/sale/347697-coop-500-west-111th-street-morningside-heights-new-york

Why would anybody buy now when prices haven't even begun to fall? After the 1987 stock market crash it took 10 years for properties to fall and recover their pre-1987 prices. There was a slight decrease after the dot.com bubble burst, but that bubble was quickly replaced with a new one - housing!

There's more shock to come than just what's happening today on Wall Street. Best I can tell Obama is going to win a landslide victory, and the Democrats will have a filibuster-proof majority in the Senate and an increased majority in the House. That will mean significantly more regulation of Wall Street, which didn't occur after the 1987 crash. There are no more investment banks. Bonuses are down 40% this year, awarded to a smaller number of people, and a lot of these jobs will be shipped to Charlotte.

I believe the stock market will recover quickly as it is vastly oversold. I don't believe the global recession/depression story because my business - very expensive and very economically sensitive - is humming along at a record pace, and everyone I know says the same thing about their businesses. The only depression there will be is in New York City: the engine that drives the economy is temporarily dead and permanently impaired. Rather than cut spending they are considering raising already high taxes on millionaires who no longer exist. It will do nothing but drive people and businesses out of the city, just as happened in the 60's and 70's.

couple of devil's advocate points, steve:

Why do you (and others) assume that being a Democratic automatically goes hand and hand with anti-Wall-Street regulation? I seem to recall NY politicians being very open to the idea of privatizing Social Security a few years ago, although it was an idea most actively advocated by Republicans.

Assuming your business is doing famously, as well as the business of others, why shouldn't some of that unscathed business activity have a countering effect to the negative effects of layoffs from the investment banks and their lawyers?

for shame, "a Democrat," not "a Democratic."

"automatically goes hand and hand with anti-Wall-Street regulation?"

What makes you think regulation is anti-Wall Street? It's my opinion that regulation of risk is good for Wall Street - when this crisis is over, they will have wiped out all the profit they reported over the past 10 years.

"why shouldn't some of that unscathed business activity have a countering effect to the negative effects of layoffs from the investment banks and their lawyers?"

Two reasons: 1) there's a big difference in what I make versus what Wall Street bankers were making; and 2) I'm not making more money than I was before; therefore, I don't add anything to the economy, since I'm already contributing it.

sorry, steve, you've lost me again, not because the logic of your post is so complex, but that taken in combination with your other posts, it is confusing, to put it nicely.

mrsblogs...if your thinking of buying now, so is the guy down the hall and the woman across the street, and the couple downtown....etc and probably dmag, stevejhx and newbuyer99 too. People move in herds, they have waited 15 months for credit crisis to pass, they will pounce when they feel the time is right. You are the perfect example of what's brewing in buyers minds.......I'd be a buyer as a matter of fact I'm getting ready to add to my collection....

Seems like a great time to lowball with an all-cash deal in an established, well-located building with good light and views.

By January '09, this rare window of opportunity may be closed because with more certainty in Washington, economic stability could be just around the corner.

I'm not thinking that real estate prices will see the 20% returns that we all got so used to, but I do think that nicer pre-war apartments that are FAIRLY PRICED may go from "Rarely Available" to "Impossible to find" by the time we all see that there is in fact a light at the end of the tunnel with respect to the economy.

But of course mrsblogs you think that way because you're a realtor. Whereas Steve F's adding to his collection of real estate properties at this time and in this market doesn't even merit a comment.

> People are fearful,

Stock market, yes. Nationally, yes?

Manhattan RE? No, not at all. Not even close.

There are still folks who don't even get that there is a crisis (some still even on this board denying that we are in a decline). We are definitely not at capitulation, we're at the point where the bad news is just *starting* to get out (and is still met by bulls trying to explain it away... "seasonality" was used just this wee to explain the 12% decline).

RE markets work much slower. The rest of the country started its decline TWO YEARS AGO. We've got at least that...

holliston, I meant that the prime NYC RE market will begin to find its nadir (down 40-50% from high) around January 2011. So that would be my earliest buytime, for those who don't mind some peaceful stagnation . . . many more years after that before prices regain their 2007 levels. And essentially never to return to sustained yearly gains such as we had 2000-07.

"taken in combination with your other posts, it is confusing, to put it nicely."

How so?

> By January '09, this rare window of opportunity may be closed because with more certainty in
> Washington, economic stability could be just around the corner.

I think mrsblogs has confused national economic stability with the stability of the NYC RE market. The national economy has been in the crapper for 2 years. New York's problems have only just begun.

mh23, thanks for your helpful game plan. Just one question that has bugged me every time I have contemplated making an offer on a co-op: to make an offer, a buyer has to reveal so much about his/her finances that it really defuses any negotiation points based upon ability to pay, mortgage contingencies, etc. I grew up and, until the late 1980s, lived in the midwest, and we never revealed such info, both because one just didn't talk about one's finances and because it was a bad negotiation technique. Here in the Manhattan co-op market, those sentiments are out the window. I am just hoping to learn about negotiating in such a market.

I just realized something....

I had brokers telling me week ago that there was no economic crisis.

Now, 30 days later, we have to be careful we don't miss the recovery:
> By January '09, this rare window of opportunity may be closed because with more certainty in
> Washington, economic stability could be just around the corner.

Let me pose the question to any broker... is there ANY time in the business cycle that isn't a "great time to buy"?

"How so?"

I think your sounding the alarm about declining Wall Street incomes has been linked to the expected re-regulation industrywide. It sounds as though you are of course exempting yourself from this, though you allude to your livelihood being linked to the financial industry in some fashion.

I don't believe one can expect Democratic elected officials to be 100% pro-re-regulation any more than one can expect Republicans to be 100% pro-re-de-regulation, though the latter is more likely than the former. You have equated the expected Democratic Party hegemony in DC (which I think will probably happen) to an inevitable unchallenged greatly heralded for the past year regulation spree. It sounds to me as though you are hedging your prediction on that (on your part) presumed massive re-regulation with declining compensation packages, which you seem to equate strictly with the degree of leverage used by the profit centers. I think that if the re-regulation you're expecting, which you're now linking to the Democratic Party, is not going to create greater revenues with less leverage but lower bonus packages. I think you're just spinning your wheels.

If revenues and profits go down, which seems very likely, that will crimp compensation. If your livelihood is immune and you keep on making the same income you've always made, and if these colleagues you refer to continue to keep chugging along doing as well as they ever have, then that will be a sign that things aren't so desperate as you are stating they will be. What you are saying is that there are plenty of people who are unaffected by this credit crisis. But in other posts you are also saying that the nuclear fallout from the credit crisis, tanking hedge funds and investment banks, is so toxic that New York real estate will be devastated.

I think what you say, put in the simplest terms, is that only other people are screwed, never you.

Hi:

I'm a broker and am seeing alot of people on the side lines, many are afraid to buy in an uncertain market. I am working with some buyers who want to take advantage of an anxious seller who needs to sell
or a condominium that will negotiate to pay off bank loans. Most brokers don't telegraph the need to sell at a reduced price, though with cash or excellent credit it is a time to get yourself a "good" deal. If your borker can't negotiate the price you want, move on and find the right situation for you to have as a home or investment to rent out. jkatz

Wati, jkatz - Why wouldn't you suggest maybe waiting until the full impact of what is currently occuring to take its effect on the prices of real estate? Why don't you think that the longer that this situation that we are in persists, the more desperate sellers will get and the lower prices will get? Do you feel that all of the employees who were laid off will quickly find new jobs, and a surprise good bonus season will provide fresh funds to purchase nyc apartments at currently overpriced levels? Why would it be impossible for you, someone who is closer to real estate as a broker than most of us, to not be able to analyze the situation and provide a truly non-biased opinion? Why do you have be such a cliche?

> I'm a broker and am seeing alot of people on the side lines, many are afraid to buy in an uncertain
> market.

Yes, and when the declines get deeper, they will be more than outnumbered by the folks who were in the market moving to the sidelines. Are you honestly trying to tell us that when a crash starts, there are MORE buyers?

Yes, there are a few folks waiting, but they might be waiting for 40%. But there a hell of a lot more folks who will freak. Take a look at the stock market... declines just bring about FURTHER declines.

So, right back to the original question (which unsurprisingly was AVOIDED):

"Let me pose the question to any broker... is there ANY time in the business cycle that isn't a "great time to buy"?"

i guess the answeris no....

> Wati, jkatz - Why wouldn't you suggest maybe waiting until the full impact of what is currently
> occuring to take its effect on the prices of real estate?

Because that wouldn't support her selfish interests.

> Why would it be impossible for you, someone who is closer to real estate as a broker than most of us,
> to not be able to analyze the situation and provide a truly non-biased opinion? Why do you have be
> such a cliche?

Because the qualifications of a broker are a salesperson who can keep a straight face, not any market intelligence.

Hell, if she WERE smart about markets, why would she be a broker in the middle of a crash in the first place?

is it just me or does ths stevejhx guy seem to be a real downer? Last time I checked, there were people who did not work in finance in manhattan. Duh, of course the prices will correct themselves but if you want a new home and you have money, there is definitely get a good deal now if you are patient and careful. Just dont expect to flip it anytime soon.

commonsensense, the really funny thing is, you have no common sense. "Nuff said.

A bargain about to become a bigger bargain is no bargain at all...

The only depreciating asset any man should have in his portfolio is his "wife."
http://blog.adamnash.com/2007/10/05/craigslist-what-am-i-doing-wrong/

My friend just pulled his bid from FIDI. His bid was about 18% off list - they accepted it after rejecting it and then he countered lower but that was not accepted. He's sitting back and waiting.

what building?

nope - wait for the new condos to go bust, when they cant rollover their construction loans.

YES - Time to buy stocks!

Yes, it is a good time but negotiate, negotiate, negotiate. Especially about closing costs.

99

okay, let me rephrase the question...
Is it a good time to buy an apartment in Manhattan that will be used as a primary residence for an empty nester couple that has the following:

--mint condition
--fixed up with all of the latest bells and whistles (new kitchen, appliances, baths, floors, mouldings, wainscotting, etc.)
--established pre-war building with a doorman
--established neighborhood
--views
--good light
--reasonable maintenance costs

There is no intention of making a huge profit on the unit in the near term. I'm thinking that it may be the perfect time for empty nesters to jump in to a beautiful top-of-the-line classic 6 for under $2 million and enjoy Manhattan living at an affordable price for years (maybe decades to come). I'm also thinking that in 15 years, or so, apartments like this will be worth significantly more than what we pay now.

Do people agree, or will Manhattan morph into an unlivable hell-hole with EVERYONE running for the exits?

Btw, Tropiloco, I'm not a broker.

why would an empty nester need a classic 6 and how can under 2 million be considered reasonable for that.

MrsBlogs, if your finances allow and you're certain of the purchase, go out and look. I think you'll be pleased if you wait a while longer, but if you see something you love and are in it for the long haul and don't mind being tied to the city if services decline and crime possibly goes up, well, then you're the best judge of what's right for you. Just my 2 cents.

> Last time I checked, there were people who did not work in finance in manhattan.

And did they make the money and have the savings to support purchasing a house at $1200 per square foot?

Or maybe they don't work in finance but have one of the 3 jobs dependent on finance for every job in finance- law, advertising, entertainment, restaurants, real estate brokers :)

> Is it a good time to buy an apartment in Manhattan that will be used as a primary residence

I'm sure I speak for all the fellow bears here when I say it doesn't make any sense that it is time to buy now because:

1) because of illquidity, the real estate market lags the stock market and the economy by some quarters (and it just happened again- Manhattan collapsed this summer 9 months after the stock market);

2) this downturn is more directly related to real estate and affects Manhattan real estate than the 1990-1991 problems- larger hit to financial market profits and employee bonuses, a lack of credit availability to finance purchases, higher interest rates to those who can be extended credit (they rose 50+ basis points in the last week alone);

3) on top of those jet fuel drivers going in reverse is the human condition of momentum - part of what drove the market up to 25x rent was a belief in rises beget further rises and resulted in ever more speculation every year- now as the September collapse becomes more apparent in the actual sales numbers and the earlier deals on preconstruction disappear- those declines will net scare buyers away, not attract them, because net there will be more people fearing declines than bottom-fishing.

Because of the risk the downturn becomes huge (25% 35% or even 50%) price declines, smart people here are saying don't buy until a bottom is established and prices start going up again. Many leading indicators are still going in the wrong direction- weekly figures in new listings, new signings, contracts broken are all worsening supply/demand short-term.

BTW mrsblogs you're sooo obviously a realtor! You're on record in another trend saying that as soon as profit minded investors exit the NYC RE market prices will soar again, and you sounded almost giddy. You're 100% a realtor.