home-prices-to-gradually-drop-next-year

good post
20% is pretty much what everybody expects

20% is the number that people who are in the "bargaining" stage of grief come up with, in their private discussions with themselves and/or their gods. 40-50% down is more realistic for NYC in the next couple of years. And not gradually -- in an implosion. And not so much because of mortgage availability and rates, but joblessness / radically lower earning, and the completion of the 2-year coop sublet maximum (the latter being the trigger for the implosion).

wheres' exit2?

When the shit hits that fan in the next twelve months with all the jobs loses/bonus and salary cuts there is going to be a rush to get out before the bottom falls out.

20% in 2009 alone? That doesn't sound "gradual" to me. How much pain was caused when we were down 16% YOY nationally.

Given that Manhattan median went down 20% in about FOUR MONTHS this year, I would consider the next 20% taking a year gradual...

I think that defaults on construction loans are the next piece of news to start the unraveling process. my ear to the ground says that 20 Pine is trying to dump some 90+units @ $650 sf or less. If they don't get that then the bank will foreclose. Developers can only hold these things empty so long and the rent to own is so transparently desperate (and questionably succeesful) in a falling rental market that there is a good possibility that alot of condo projects that are 15-60% sold will default. What happens after that is really scary if you are one of the unlucky buyers. The inability to determine a market botttom is what is keeping buyers on the fence...2009 will make 2008 look rosy.

I agree with you on the term "gradual" in a relative sense compared to the totally unprecedented 15-20% slide in 6 months (of any market). But a 20% slide in 1 year is still very dramatic.

If the 50% down figure we often float on this board is true that means we will be 60-70% from the bottom by the end of 2009...

ubbatubba - - if the bank forecloses on the building - what happens to the owners of the condos, do they lose everything?

"I agree with you on the term "gradual" in a relative sense compared to the totally unprecedented 15-20% slide in 6 months (of any market). But a 20% slide in 1 year is still very dramatic. "

I know, I'm kidding.

$650 psf downtown for full service new construction. That is certainly going to make the LIC and WB new construction a hard sell...

what is your point oh person who knows everything and has predicted everything?

Giving my fans what they want, I guess.

Any special requests for the encore, my groupie?

?

Tam, foreclosing on a building would have different effects depending on what stage the development process is in. If the project is in the ground, the bank might simply stop the construction and shelve it for sunnier days. They might replace the construction company and possibly even remove the developer. An interesting thing about bank financing and development is that when the market is stable (or going crazy like the last 6 years here in the city), the bankers tolerate a range of development problems ranging from change order and delays to poor bookkeeping. But, in the current environment, the banks are virtually looking to find issues with the developer in order to not fund. Call it responsible banking or hoarding cash, in the end, the project gets thrown into a state of confusion. There are a number of such projects all over the 5 boroughs. If the project is essentially complete and the sponsor has sold 15% of the units and declared the plan effective, then the sponsor or bank play the sales game which up until now has benefited both parties pretty handsomely. But when the sh_tstorm hit, then the fingers start pointing and the bank can force the developer to lower prices or attempt a rent to buy or full out rental program. The current owners stay put, but now they co-exist with a group whose property interests are not on par with theirs. I could go on and on, but I've already lost interest in reading my own stuff!

thanks ubba- I have stayed at 20 pine and even though a lot of the board dislikes it, I really liked the space of the it much more than a lot of the other downtown buildings. If it ever goes to 500 sqf I would seriously think about it, but if the bank foreclosed and you owned the apartment what is worse case scenario?

if it goes to $500 per sf you will have to beat me off with a spoon to buy at least 50 units. hope i helped your perspective. that's what these threads are suppose to do.