Christine Toes - What Happened to Her

She had a post on urbandigs sometime in the last week or so...

that is a hilarious post. i guess we know the answer to question of "who the heck could possibly be buying in this environment??"

I couldn't find the new one, only this one...

http://www.urbandigs.com/2007/12/toes_predictions_for_2008.html

These are from last dec...

> 1. Manhattan is probably not on the brink of a 15% drop in sales prices.

Yes, sorry, it was 20%

> 3. Anything terribly overpriced has come back down to some semblence of reality.

So, now we're at reality minus 20%

> 4. My buyers know that they are at least not buying at the absolute "top of the market."

Yes, top of the market minus 1%. You only lost 19%.

> 5. First time buyers just want to get into the market somewhere. "Time in the market is more
> important than timing the market."

Sales down 75%. Guess this was a lie, too.

> 10. Their income is finally getting to a high enough level where they could use the tax deductions.

Funniest one of 'em all...

I love Noah's response to that post:

"Ummm, I'll go on vacation without commenting."

Posted by Noah | September 11, 2008 11:39 AM

Sorry nyc10022 - I think her recent post (it analysed the cost to list an apt. FSBO) must have been taken down from urbandigs.com. I couldn't find it when I just looked.

I found it somehow.... thanks for pointing it out.
http://www.urbandigs.com/2008/12/anatomy_of_an_apt_sale_how_muc.html

That girl is an idiot.

btw, anyone think Julia is Christine Toes?

kas242 - surprised you found that. I had to delete it because of an 'issue' over at the place where toes works. since I like to talk here and often find myself in trouble, Ill keep quiet now.

UD, I always love to hear you talk. Please don't 'pipe down' just because of the 96th Street discussion last week. The vast majority of the board really appreciates your candid take on the shifting market.

Urban, remember last week i told you about my friend who had a bidding war over one of her UWS co-op listings? Well it is in contract...

thanks Kas...yes Rachel I did. Good for that seller, but unless we know the property, the bid, and if it closes, it doesnt change whats happening out there. Anyone that procures a bid within 10% of peak prices right now with everything going on, consider yourself very lucky

I agree Urban - I consider myself and this friend very lucky. When it closes, i will tell you more and also about another large deal we are working on...

get er done

can't wait!! especially cuz everyone on this board is soooo negative!

we're not negative Rachel, we're realists.
btw, what's up Rachel??!!

Come on Rachel - things are going down. How can you sit there and be a cheerleader when it is quite obvious. Great that you have some deals to pay the bills but things are going down.

Yeah, not sure if Rachel is the kind of buyer's broker I'd like to hire. I'm not sure if she's gonna get me the best deal, or convince me to buy at the peak. In the end, she works for commission.

hi i_want_to! how was ur visit to northside??

cccharley - i know things are going down and moving much slower. my point is, there is still movement! its honestly not as bad as you guys are making it out to be.

cleanslate - wouldn't expect you to trust me - we've never even met. Most of my clients are friends/friends-of-friends, etc... How can you be sure ANY broker is trying to get you the best deal?? What makes me seem so sketchy?? I think you guys are simply biased toward brokers.

Yeah, so I'm better off working without a broker... than getting someone passing off as a buyer's broker. It's not a comparison between you and other brokers. It's a comparison between getting one or doing it yourself. There is nothing in your posts that indicate you'll be working for my benefit if you're anchoring the prices at the peak. I'm still wondering how you will be beneficial to hire...or how you would have been beneficial to i_want_to. In the end, you're working for commission from the seller. Why wouldn't you try to get the best price for the seller? You sound like you want the prices to never decline, urbandigs does not have that same opinion. I haven't met urbandigs, but I do trust the guy. Unfortunately, not sure if I can trust you based on your posts and I still don't know what you can offer if you cannot even negotiate the price in the first place. What else would you do, just show me places and convince me the price is right?

agentrachel - you sound better than most brokers that I have met, and of course your optimistic, this is your livelihood, but I think it is going to go bad, I hope not as bad as I fear, I remember what the city was like when things were down and even though I want to afford to buy a second home in the city, I dread the prices going down that much because of the resulting fallout. You are still going to have sales, most people still have their heads in the sand, the malls are still full of people buying more that they can afford. When the bills come in after this xmas season and the bonuses are not what they were, I think you will see a wake up call. As for the higher end homes, a lot of the wives of the high spending brokers, lawyers etc still are still spending – they will wake up also but there is a lag time – I don’t think you will see any difference in most of your sales till the spring.

tomorrow Rachel tomorrow. Sales people in Roosevelt island stood me up today, so I'm pissed off.

Good luck I wanna! what were you supposed to see in Roosevelt? Riverwalk ct??

cleanslate - I get it, ur not interested in working with me. ok.

Tam - I know things aren't what they once were but i seriously don't think its going to go back to the late 80s. Really, i don't.

Prices won't go back to the late 80s but the way the market acted may be like the late 80s early 90s. Maybe prices will dip to 2000-2001. Great for buyers who knew to wait out a bubble when they saw it growing.

if we dip to 2000 prices, that means a drop of 50-60%

We will have to wait until after the New Year to get a real sense of how far prices will go down. However, as we know, real estate bubbles take years to deflate, and they never have a V shaped recovery. That being said, it may take three to five years for prices to contract 40-50%, and then they will stay flat for several years after that. All of the factors that led to price appreciation have been utterly gutted, therefor we need to see how the new paradigm takes shape. If the doctor is the new i-banker, that is a big paradigm shift. My sense is that desperate sellers, and they are coming, will accelerate the price depreciation we can expect in 2009, and that will be the first jolt to the market which will motivate all other sellers to start dropping their prices, and once that happens in unison, then you might get a glimmer of buyer activity again.

We're already seeing around 20%. Manhattan goes down late, and can go down hard.

The last bump in prices were based on no fundamentals. As discussed pricing was based on nothing. Oh let's charge 1000 sf just because we can. Those days are gone. I'm seeing apts priced 600-700 sf south of 96th st. I think they will be going lower than that. Of course not prime prime - but who cares. Most of us just want a nice place to live and call our own and of course one that we can afford the mortgage and monthlies.

you wont see these drops in the reports for another 2-3 quarters. Maybe 1Q of 2009 in April will show the stuff me and Doug are talking about

its foolish to even discuss any bottom when 2009 will see hundreds of thousands of job losses here. I think financial industry will see 50,000 or so. And it is likely another 50,000 jobs will be lost as a side effect of the consumer driven slowdown over the course of 2009. Its very sad this phase of the process

Oh I agree Noah, I hope you did not infer that we would see a bottom in 2009. I think 2009 will be a very tough year, but by no means the end, or even the beginning of the end, of the downturn. Those of us who sold in Q! 07, even with a 5% reduction in asking, are certainly relieved. I can only help wondering however, how many sellers brokers will be moving on to other fields. Also, I seem to remember many storefront spaces being leased by the city's main brokerage houses, I wonder if that much prescence is needed or affordable as we head into this downturn.

nope not at all...just talking out loud again. Alot of sellers will disappear but many will wait it out and try to survive first

"if we dip to 2000 prices, that means a drop of 50-60%"

No - that would be 2003 prices.

Real estate prices can collapse quickly - 20% in one year is evidence of that. Among the Masters of the Universe there are many desperation sales, which will bring down prices fast. As well as new dev flippers who are better off doing a short-sale than bearing the monthly losses entailed in renting their places out: 50%.

Not to mention people walking away from their deposits.

"many will wait it out and try to survive first"

They will, but they won't.

When do most layoffs occur? I always heard that they happened at the end of the year, to avoid bonus payments. If that's the case, I wouldn't expect to see the effects on NY Re until Q1 to be reported in Q2. Do others think it will take longer than that? Shorter?

(I know that last comment came across as heartless, but it wasn't meant that way.)

"We're already seeing around 20%. Manhattan goes down late, and can go down hard."

That is no true, prices ae not down 20%. At most, they are down 10%. Maybe 20% in Harlem.

alpine - what are you basing this statement on? How do you know? I know for a fact that deals happening now are in the 15-25% down from peak levels range.

Jonathan Miller is doing the appraisals and sees where the deals are happening at. Im seeing same thing. So is Doug at Elliman who blogs about what he sees. No other brokers are blogging about this that I know of.

http://www.federalreserve.gov/FOMC/BeigeBook/2008/20081203/2.htm

"A major residential appraisal (MILLERSAMUEL) firm reports substantial deterioration in New York City's housing market over the past two months: prices of Manhattan co-ops and condos are reported to have fallen by 15 to 20 percent since mid-summer, though it is hard to get a clear handle on prices due to thin volume--much of the recent activity is reportedly from desperate sellers."

so desperate sellers dont count? The reason is because buyers backed away. That is what makes a housing market turn, when buyers disappear. Those that need to sell, want to sell, or are forced to sell, have one way to do it --> lower prices and accept any bids that come. If they dont HAVE to sell, they can afford not to accept the low bids coming in. But if you have to sell, you dont have much choice.

This is the part of the process where bids are rare, hard to get, often dissed because they are too low, and sales volume plunges hurting those sellers that must sell. This is when you see huge gap down in deals from peak levels due to illiquid nature of this market right now. This is the worst type of environment for sellers that have to sell within a pre-defined short time range.

But Noah,

Do you know of any apartments that SOLD for 20% less than their original sale price. The Case Shiller Index, which tracks REPEAT sales, shows the area as being down by only 7%.

Wishhouse - in this situation, which is very different than most slowdown cycles, majority of layoffs will come as forced mergers and shotgun marraiges of large investment banks with BAC, JPM, etc.., close.

An example will be when Merrill is acquired by BAC, and the deal closes, a huge round of cuts will occur shortly thereafter as cost cutting, redundant positions /overlaps axed, and reorganization occurs.

http://www.reuters.com/article/marketsNews/idUSWEN125220081203

It was announced that 10,000 would be cut, but now that was raised to 30,000 expected job cuts at Merrill/BAC when the deal closes.

which Case Shiller Index? Link? What I am telling you is CONTRACTS SIGNED in past 4-8 weeks. These deals will not close until DEC-MARCH time line, and wont be counted until Q1 report that wont be released until APRIL of 2009.

People keep asking for closed deals, it takes 2-3 months for most deals to close from contract signing, so you have to wait for data to show up. This market really got stressed since early Sept, and OCT-NOV and now DEC volume is way way way down. The deals that happened in past few months will close in the next month or two, and be counted in Q1 report. You have to wait. Its lagging.

Wait until MARCH of 2009, and then you will see some pretty startling comps to review at your leisure and do all the analysis you want. By that time its entirely possible that contracts being signed are down even more. Its all about where contracts are being signed today, where are deals happening at, NOT what the closings from a deal signed 3 months ago states.

Steve - I wont start an argument with you over %'s and years, I believe 2003 will be 40% below peak. 2002 will be 50% below peak or so. I am basing this on my purchase in April 2002 and sale in July 2006. Appreciation was about 88%, from 500K to 935K. I would say this unit would have trades for about 430-450K in 2000/2001 or so. It doesnt really matter. The trend is down, arguing what year we will fall too doesnt really matter does it. Nobody knows right now. We will know when it is done and we look back on it

New York: Down 7.3%

http://money.cnn.com/2008/11/25/real_estate/third_quarter_case_shiller/?postversion=2008112515

"With San Francisco and Las Vegas, the other members of the 10-city index are: Miami, down 28.4% year-over-year; Los Angeles, down 27.6%; San Diego, down 26.3%; Washington, down 17%; Chicago, down 10.1%; New York, down 7.3%; Boston, down 5.7%; and Denver, down 5.4%."

"There is nothing in your posts that indicate you'll be working for my benefit if you're anchoring the prices at the peak. I'm still wondering how you will be beneficial to hire...or how you would have been beneficial to i_want_to."

cleanslate, I wouldn't choose to use a buyer's broker but if I did, I would hire Urbandigs. If I needed a listing broker I would use someone like Rachel or front_porch. It is ok that some brokers are good at getting the best price for sellers and that some are best at representing buyers. This is healthy and needed. No need to attack listing agents for doing their jobs just like it doesn't make sense to attack buyer reps for doing theirs. If you need a broker, just understand the difference.

alpine - this is NYC METRO INDEX, not only Manhattan which we are discussing here. I went into this 15 months ago on UD.

http://www.urbandigs.com/2007/08/problems_with_caseshiller_inde.html

"To understand WHY I think the NYC Metro Index should not be seriously considered as accurate for Manhattan, we must look at what areas make up the index in the methodology paper of the index itself. For the NYC Metro Area, counties included are:

Fairfield CT, New Haven CT, Bergen NJ, Essex NJ, Hudson NJ, Hunterdon NJ, Mercer NJ, Middlesex NJ, Monmouth NJ, Morris NJ, Ocean NJ, Passaic NJ, Somerset NJ, Sussex NJ, Union NJ, Warren NJ, Bronx NY, Dutchess NY, Kings NY, Nassau NY, New York NY, Orange NY, Putnam NY, Queens NY, Richmond NY, Rockland NY, Suffolk NY, Westchester NY, Pike PA"

http://www2.standardandpoors.com/spf/pdf/index/SP_Case_Shiller_Home_Price_Indices_Methodology_Web.pdf

PAGE 9 - Look at what comprises this index for 'NYC AREA'

At the end of the day, ALL brokers work for the seller. Higher selling price = higher commission. Buyer brokers are just as real as unicorns. If buyer brokers were REAL, then they would work on a FLAT FEE structure.

alpine - its coming

Im going to take a chance with a different brokerage idea by mid 2009

"At the end of the day, ALL brokers work for the seller. Higher selling price = higher commission."

I disagree. All brokers work for a deal. When dealing with $1M+ properties, $50k doesn't mean squat in terms of commissions. Given the choice, all brokers would take less commission on a deal to ensure that the deal is closed. That $50k means much more to the seller than it does the broker.

Listing agents job - drive sellers expectations down to get movement on price to ensure deal
Buyers agent job - drive buyers expectations to pay as much as they can to ensure deal

The actual dollar amount that is conceded during a deal means nothing to the brokers from a commission standpoint. The only thing they care about is that a deal is done. This is a very critical point to understand when buying and selling real estate.

UD, I go with the only accurate data I know of that goes back that far:

http://350bleecker.com/policy/sales.html

Agreed some would be 40% down, some 50% down, but these are real data that seem to indicate that 50% down from peak is 2003. For some it could be 2002.

4G sold for $675,000 in 2003. It's currently listed for $1.14 million. But 2P sold for $1.3 million last year, and a) it's not as nice a layout; b) it's on a much lower floor; and c) it faces West 10th Street, not Charles Street.

Which is where I get my "we're down 15% to 20% from peak" opinion, which I think you agree with.

At the end of this I would expect that apartment to sell for $600,000 to $700,000, which would bring it approximately in line with what it would cost to rent it.