NY prices will never go down

I hear Billy Joel is re-recording the song "Allentown" and renaming it "Williamsburgtown".

And they're taking all the condos from the ground, and the developers moved away, ay, ay ay, ay, living here in Williamsburgtown.

anonymous, you're probably being facetious, but in case you really are that delusional, just look at all the price chops at 15 central park west, plaza, and countless other luxury properties, and get back to me on that!

15 cpw and the plaza are their own little markets. All the major market-reporters split them out when reporting numbers because nobody reasonable considers those transactions to be indicative of the market as a whole.

I'm not saying the market isn't down. I'm certainly not saying it'll never go down. I'm just saying 15 cpw and the plaza are stupid examples to use when trying to show a downturn.

rufus, I don't consider it a price chop when people put their apts back on the market mere months after closing for nearly double what they paid, and then "chop" off $100k or so from the price.

I agree. In times of deflation, house prices usually perform quite well. I would buy and utilize an exotic loan product, a low rate, and loose lending standards to put the banks money on the line! Whats the worst that can happen?

As I've stated before, I wish there was an efficient vehicle available to short the Manhattan residential RE market.

The commercial NYC market is easy through SLG (SL Green) and VNO (Vornado). These two stocks are in what one would mildly describe, a free fall. I believe the price/sq foot valuation has plunged from a peak of $1.350 1Q 2007 to $400. Ouch!

"I agree. In times of deflation, house prices usually perform quite well. I would buy and utilize an exotic loan product, a low rate, and loose lending standards to put the banks money on the line! Whats the worst that can happen?"

umm... I'll tell you what the worst that can happen is... a credit crunch and financial crisis that results in a stupid thread like this to waste our time being created.

welp, the worst has indeed happened!! =p

Take a look at the markets. Tons of bankers are or will be out of jobs in the near future - the layoffs are just starting. Tons of hedgies are or will be out of jobs in the near future - the runs on funds are just starting. None are optimistic about near term employment, trust me. Many in this group are "new new" money (meaning last few years) with overleveraged lifestyles (mortgages on 2+ homes, cars, pvt schools for children). If they had any savings, it has dwindled along with the rest of the market. Most were expecting large bonuses into perpetuity, while the bankers assumed deferred compensation was enough savings for the future. People will have to sell. I know several couples who are struggling with the decision to downscale apartments / leave manhattan entirely, and it's sad. I'm not a doomsday personality screaming about 50% reductions, but it's shocking to see the denial of the few remaining bulls. Wall Street has been in a major tailspin, and it will get worse. This will have a tangible effect on real estate.

I have to figure OP was being sarcastic, considering we *are* down.... and this isn't the first time.

And I think buster is on the right tip. There is actually a good amount of chatter on my local alumni list about folks leaving NYC...

Bottom line is, NYC real estate is the safest investment you can make.
You are ALL bitter renters!

serge07 - We had this EXACT discussion and I told the OP to SHORT VNO in the 95-98 trading range. It ultimately went to 104, and MAVEN tore me apart and called me a chump for giving out falty stock trading advice on a public forum.

http://www.streeteasy.com/nyc/talk/discussion/4510-streeteasy-board-a-primer

I gave my reasons why, along with reasons why I thought the entire market would fall hard in October, I was short by end of SEPT, but unfortunately covered those way way too early and got long a bit early as well. Oh well, cant time them all. I'll disclose when Im wrong. But that call was spot on!

In case you missed it here it is, black & white and time stamped:

11 WEEKS AGO - VNO is a realty trust, and has great management. However, if you are asking because you want to short NYC real estate, which I think is what your plan is, you can sell calls or buy puts on housing futures at CME..However, their NYC index is not just Manhattan, and is many counties around the island of Manhattan. VNO is a good short in the 95-98 range. VNO is a good cover in the 85-88 range for now. It will take a while for VNO to get that earnings hit you probably are looking for when the stock opens down 15% the next day.

10 WEEKS AGO - I'll throw out my thinking, even though it wasnt asked for. I think this rally has legs, and VNO very well may have some nice upside if the rally comes in. But its a shorting opp. Come end of SEPT, I intend to be fairly short. We have NOT seen a bottom, and I think we will fall hard when we realize the severity of some of these macro forces.

granted my cover call was way too optimistic!

"In times of deflation, house prices usually perform quite well."

Actually, quite the opposite. The greatest period of deflation was the Great Depression, and now they are falling even faster:

http://www.economist.com/displayStory.cfm?story_id=11465476

There is no other period of deflation in our country, but Japan has been in a deflationary period for the past 10 years, and look at what happened to their prices:

http://en.wikipedia.org/wiki/Image:EconomistHomePrices20050615.jpg

I'm hoping, UD, that you were kidding about the exotic mortgage business and the rest of that post.

All hedgies and bankers I know have mansions - in Connecticut, NJ and upstate. Only 1 in NYC, no mortgage.

Um, steve, you know he was being sarcastic, right?

UB, I've read your posts on this and you were right on. I've been actively shorting these two for a tad over a year. I don't know what's up with SLG but given its price action, I suspect there may be more of a problem there than is currently reported.

I agree that Vornado is the best of the two and I would add Boston Properties. I'll be a buyer at some point but do not see much price support for VNO until it approaches the $35 area. BTW, that would basically erase the entire price appreciation from early in the decade.

I's impossible to say with certainty if there will be a close correlation between the values of commercial and residential on the downside (it was there in the bull years), but the market is clearly stating that the Manhattan business market will experience some very dark clouds over the next year & beyond.

I would agree...If VNO were to hit 35, I would prob be a buyer. In the REIT sector all I have left are puts on PPS from month ago

"Um, steve, you know he was being sarcastic, right?"

Usually I can tell, but I'm just hoping.

I'd keep out of REITs. There's a lot of carnage to come with shopping centers and malls, office properties everywhere, the impending sale of Lehman's holdings in Archstone, etc. "Commercial real estate" includes residential rental developments, and they have only one way to go.

its pretty clear nyc is the place to park your money for the long term.

now is the time to buy!!!!

anonymouss is just a two-bit broker (not that there is any other kind)

This was one of the folks who told us that January was the time to buy, too....

A 1-bit broker.

He can talk till he's blue in the face - nobody is buying. He has nothing better to do that sit on street easy and call people names

I think it is unrealistic to assume prices will not fall further. Fundamentals do not support median prices being about what they were in the 2003-2005 period. Moreover, consider NY real estate over longer periods of time. Most who bought in the 1986-1998 timeframe could not sell at appreciate values until the mid-1990s. We are in a bear market much worse than 1987, and the recission, which impacted us from 1991-1992 is likely to be softer than this one. Finance / Wall Street is also changing and that will impact the NY housing market. And lastly, with the dollar streghthening and the Euro/GBP correcting to more supportable exchange rates there are going to also be less foreign buyers.

In short, how can the NY market not correct and go back 3 years?

Don't feed the trolls. anonymouss is just trying to get a rise out of everyone. And its working.

This wouldn't happen in Chicago!

Where's spunky?

all predictions from bitter renters and envious little people
hahahahhaha

>with the dollar streghthening and the Euro/GBP correcting to more supportable exchange rates there are going to also be less foreign buyers.<

A more immediate impact will be the significant fall off in tourism. This will no doubt hurts retail sales, hotel occupancy, restaurants, theater and last but certainly not least, city fiscal budges that has received a huge boost from this sector. It's just another factor that will place additional downward pressure on economic activity.

predictions of doom!!!!!!!!!!!!!

I have just put anonymouss on "Ignore." He or she can't be civil, he or she engages in histrionics, so I have no interest in reading anything anonymouss posts.

> predictions of doom!!!!!!!!!!!!!

Well, pretty much all the doom predictions have been proven accurate, no? Market down nearly half, RE tanking nationwide, deep global recession.

Hell, we're out of doom projections... we need some more!

yeahhhhhhh

marco - been having some fun with the SE thread archive this weekend, have we?

"I hear Billy Joel is re-recording the song "Allentown" and renaming it "Williamsburgtown"."

Don't be ridiculous.

People in Allentown actually WORKED for a living.

love diggin up these winners