Forbes.com: NYC RE expected to recover in Q2 '09

Another delusional Forbes article. Those wall street jobs are not coming back. We're in the deepest economic downturn since the 1930's. NYC real estate will fall at least 50% before any recovery is made.

The second quarter is only four months away. Forbes is always writing bullish stuff. A couple months back they put Steve Forbes on the cover and had him saying in an article that the recession would be over by Q2 of 09.

Nobody believes the recession will over by then, except for Steve Forbes. Not anybody at the Fed or at any of the think tanks, or any of the bank analysts -- nobody.

It's hard to see the economy stabilize in such a short period of time. We in New York haven't even gotten to the point yet where the lack of Wall Street bonus has begun to be felt in the market.

Sorry, I just don't see it. I think this is bullish sales talk.

"Nobody believes the recession will over by then, except for Steve Forbes. Not anybody at the Fed or at any of the think tanks, or any of the bank analysts -- nobody."

Warren Buffet said in October that stocks were attractively valued and that he was buying. He didn't explicitly state recession over by Q209, but I think its fair to say you're exaggerating just how bearish the smart analysts are.

"Stated reasons would be the resurgence of Wall Street"

Yup.

In Charlotte.

"Nobody believes the recession will over by then, except for Steve Forbes. Not anybody at the Fed or at any of the think tanks, or any of the bank analysts -- nobody."

Agreed.

And the stock market is not the RE market and is not the economy. It is forward looking. I can't imagine we see any major positive moves in 2009 in the RE and economic news.

Well tech_guy, I guess you can find people who seem smart enough who think certain stocks have bottomed out....it's hard to say Warren Buffet isn't smart, although he has surely done things along the way that ended up being mistakes.

But depending on the name of the stock, such a call might make sense.

But you know many of the bond markets are simply frozen over. All the structured finance bonds, and many of the corporates, across all the sectors -- they're just dead in the water, nobody is issuing new paper (except the people who have govt guarantees) and very little secondary buying or selling is going on.

So the idea that somehow people are going to find the confidence again to take on risk in the form of buying bonds, that they're going to find this confidence in just four months, when the loss of confidence has been 15 months in the making....it's hard to see. Especially when you consider that many manufacturers are cutting back, all the car cos are saying they're going to produce less product, all the projections show that consumer spending is going to stay low for awhile.

Economists like Nouriel Roubini -- who is a very big bear, I grant you -- but Roubini called this recession before almost anyone else, and he thinks we won't come out of it till 2010 or later....

I don't know. If you find some analyst who's reasonably independent (none of them are truly independent, but I mean someone who is obviously not trying to sell a point of view) if you find such as that and he or she writes that the recession will be over by Q2, then please post it here. Warren Buffet buying certain stocks is not the same. It could be interpreted as a bullish sign, I grant you, but I think it's not that big of a sign.

lol, i love this! we've been hearing this type of delusions since mid 2007. "by mid of next year, thing will get better".

Let's see: the stock market tanked due to the effect the credit crunch had on the economy. The credit crunch was caused by massive losses in real estate holdings. So investors are going to hedge their risk of exposure to the stock market by investing in real estate? Seems logical enough for me.

".it's hard to say Warren Buffet isn't smart, although he has surely done things along the way that ended up being mistakes."

Absolutely he's made mistakes. I'm not saying he's right now (though I do happen to think that). I'm just saying your prior statement, that Forbes is the only loony who's thinking positively while everyone else thinks its unheard of for us to recover in Q209 - that's an incorrect statement. The world's best investor thinks otherwise.

Again, I'm not saying he's right. I'm just saying smart people think there's a decent chance we'll be doing well by Q209. Smart people can be wrong.

"I don't know. If you find some analyst who's reasonably independent (none of them are truly independent, but I mean someone who is obviously not trying to sell a point of view)"

Buffet was speaking of his personal holdings, not his Berkshire holdings. As he just recently donated 80% of his net worth to charity, I think its safe to say he's reasonably independent. He doesn't strike me as the type to lie to the public for personal financial gain.

GraffitiGrammarian, I agree, there's no reason to be bullish on the economy in the near future. There's almost nothing there to make anyone feel truly confident. I don't think anyone knows for sure that stocks have bottomed out or are close to doing so, but I think the point is, given the tremendous loss in value, many stocks are good buys for the long-term right now. I really think the only way you can disagree with that is if you think a) we're going to see more huge losses in the stock market, or b) we won't recover these losses anytime in the next few decades. I don't think either scenario is particularly likely, though I'm sure the former has its "fans." As for Roubini, I don't mind the guy, but didn't he predict a recession every year since 2004 or so? I'm far more impressed with his analysis that I am by his "timing."

> I think the point is, given the tremendous loss in value, many stocks are good buys for the long-
> term right now.

Definitely possible. But, even if the case, that can't be confused with economic recovery. Stocks generally bottom before recovery. Well before.

The stock market's anticipation of things getting better can't be confused with anticipation of things getting better SOON. Also, we're talking about historical levels of decline. We might be bottoming just because there was so much fear before, not because things are looking particularly good.

Anybody confusing potential stock market bottoms with economic recovery just doesn't know much about the stock market... or the economy.

"lol, i love this! we've been hearing this type of delusions since mid 2007. "by mid of next year, thing will get better"."

Ha.

And, its usually the folks who completely missed the crashes that are the experts on when they'll end.

very true nyc, add those that just bought a house in manhattan.

hey, i've been happily surprise by the clown (ex-clown i may add now) of david lereah, the ex NAR cheerleader. he finally is way way way much more bearish than tech_guy. wow, what a transformation that not receiving a salary from promoting housing can make!

We also saw a lot of brokers turn on a dime when they realized they couldn't sell "manhattan won't decline".

It was literally a week from thousands of brokers saying "Manhattan RE is solid, it won't go down, buy now" to "ok, its down, but it won't go down any more, buy now".

We should ask these folks exactly when is it NOT the time to buy?

"he finally is way way way much more bearish than tech_guy"

You say that like its a tough bar to beat... Of the regular posters to this board, the only ones more bullish than me are petrfitz, steveF, and most of the brokers. LICC, ali, really all but urbandigs (who I think is a broker, right?).

For the record, I never liked David Lereah. Nor do I like that my call, flat real estate since 2006, was ridiculed and considered ultra-bearish then and ultra-bullish now.

"Definitely possible. But, even if the case, that can't be confused with economic recovery. Stocks generally bottom before recovery. Well before.

The stock market's anticipation of things getting better can't be confused with anticipation of things getting better SOON. Also, we're talking about historical levels of decline. We might be bottoming just because there was so much fear before, not because things are looking particularly good.

Anybody confusing potential stock market bottoms with economic recovery just doesn't know much about the stock market... or the economy."

Where in my post did I equate stock market recovery timing to economic recovery timing? Of course there's a gap, usually quite long, as you noted. Reread my first sentence - pretty clear what I meant.

Did not mean to infer that you did that.... I was just using your post as a spring to make the other point.

(which was the point of the original post)

No worries - just making sure!

How much real estate to you think the Forbes Familyhas exposure to in NYC????? Hmmmm....

I don't see the economy making a major push forward until the end of next year or. more likely Q1/2010. I still think the economy will bottom by mid-year and then it will be a quarter or two of flat results that will show stabilization. Then the economy can begin to move forward. Lots could happen to change this, but I think there is no way that '09 is not a slog for the economy.

i would not be surprised if that was behind the motivations...

So much bearishness here on the NYC real estate market. Remember, what the experts say: when pessimism is at its greatest, it's time to buy.

Pessimism is at it's greatest? Most are still in denial BigApple.

Did these guys predict the downturn we are in previously? If not, how can they be in any position to defend a recovery right now, on the basis of assumptions that have not occurred yet? Seems silly to me.

Only time will tell AdamM. I'm buying but for the long haul because I don't want to rent.

I love it.... we JUST finally get folks to admit there is a downturn at all, and then suddenly folks think everyone is pessimistic?

Sorry, this is just the second inning. The reality here hasn't hit everyone. This board is probably way ahead of the market, and even still we have absolute denial here.

Hell, the 20% median stats came out last week, and we had folks YESTERDAY doubting the stat...

Just in the last couple of days..

"not in prime"
"only new construction"
"off asking prices which were too high" (untrue, these were SALES price stats(

Still tons of denial. We only have ways to go.

UD has it right... the folks who denied there would BE a downturn in the first place are also the first to tell us that it is ending. LOL.

> I'm buying but for the long haul because I don't want to rent.

I'm renting for the short haul because I don't want to lose money leveraged 5x.

For the long haul, lets see where prices and rents lands.

> Pessimism is at it's greatest? Most are still in denial BigApple.

I know, its funny. Its like the brokers who one day said "the market won't go down, BUY NOW" and then the NEXT FING DAY said "market is down, best opportunity ever, BUY NOW".

Sorry, but if you think THIS is capitulation, you don't know what capitulation is. Hell, if you still have people saying "this is capitulation" then you don't actually have capitulation, by definition.

"I'm buying but for the long haul because I don't want to rent."

I can understand someone not being too cute about trying to time the exact bottom print in RE. But if you think there's a risk that things can go down significantly from here (which I do), how can you possibly say this with a straight face? If you bought a $1mm place now instead of waiting 12-18 months to buy the same place for $700k, you would have $300k more in principal to repay. Not to mention the compounded interest on that $300k before you repay it. And let's not even talk about the opportunity cost of being able to invest that $300k elsewhere. This whole concept of "mark to market isn't important because I'm in it for the long-haul" is just silly. Much akin to an ostrich thinking the lion isn't there if he sticks his head in the sand.

I have a feeling some of this is rationalization after the fact, a common human response.

Straight logic makes a pretty clear and compelling case these days.

it's going lower