Miller Samuel Fourth Quarter Results

As a wannabe Manhattan buyer, still fairly disappointing - but not too surprising. I'm guessing that most of the sales were old contracts that were finally consumated in Q4.

My preferred way of looking at the stats (which I know some will disagree) is total Manhattan, condo/coop, price per square foot. Here are the numbers:

4Q,07: $1,180
1Q,08: $1,289
2Q,08: $1,322
3Q,08: $1,193
4Q,08: $1,183

My quantitative work, though, suggests that declining sales numbers is a strong leading indicator of future price weakness. I'm still of the belief that the next two years we see very weak sales and prices. Wouldn't be surprised to see prices drop close to 50% before we finally bottom out.

"While the overall median sales price rose 5.9 percent, luxury prices dropped 3.9 percent and the median for all resale apartments slid 3.6 percent"

Wait just a gosh darn second... didn't nyc10022 say about a billion times that Miller Samuel said prices were down 20% already? Fastest drop in the nation?

that's mostly the deals done at the peak of the market, q4 07 and the building was completed for moving in q4 08.
wait a couple of months, that's when you'll see < $1000

I believe the Miller Samuel number used in the beige book referred to November "contract" YOY prices - not finalized sales.

"q4 07 and the building was completed for moving in q4 08"

Which is why Miller Samuel separated out new dev (terrible price indicator) from resale (much better price indicator). Resales are down 3.6%. Yawn.

Topper is absolutely correct, the Beige Book numbers are for contracts, whereas the Q4 report is for closings. I don't really trust the Beige Book data as much for that reason. tech_guy, you're right though, nyc10022 likes to jump the gun a bit. I do think we'll see something close to that figure for closings in the Q1 reports, but we'll have to wait and see. The sales volume drop is significant as well, though each report has varying numbers on that.

Jonathan Miller said that prices have already fallen by 20% from the peak. Those prices won't show up in the data until the 1st and 2nd quarters, after which this will be not only an economic issue, but a psychological one: sharp drops in sales and prices will lead people not to buy, wait it out till it's over.

There will be a 4-year supply of properties on the market by this summer, when total listings are divided by the annualized level of new contracts.

That means unsold inventory will be turned into rentals. Which will further lower rents. The market that current new development was developed for no longer exists, and it's not coming back.

When I started posting a year ago I called this the perfect storm. I was pilloried. Now what?

"Which is why Miller Samuel separated out new dev (terrible price indicator) from resale (much better price indicator). Resales are down 3.6%. Yawn."

Tracking median price per square ft while splitting out new dev from resale is the best way to track where the market is moving. New devs will get crushed, resales will be soft but will not tank.

"Jonathan Miller said that prices have already fallen by 20% from the peak. Those prices won't show up in the data until the 1st and 2nd quarters"

20% from peak? I don't recall the article, was that 20% on all properties or just new devs?

I was pilloried. Now what? I guess you keep renting and translating asnd doing stand up. what did you expect to happen?

Jonathan Miller prepared the data for the Fed's beige book, which states 20%. He's also been quoted in numerous publications giving that number. I noted a similar figure looking at prices at http://350bleecker.com/policy/sales.html.

Urbandigs says the same thing.

"Tracking median price per square ft while splitting out new dev from resale is the best way to track where the market is moving."

No. Tracking it the way Case-Shiller does is the most accurate way, because it normalizes the mix of properties.

"New devs will get crushed, resales will be soft but will not tank."

That's not possible.

All praise Steve.

From the beige book. I think it's important to note that the indicated 15% to 20% decline was from record 2008 peak prices - not prior year levels.

Housing markets in the District have deteriorated further since the last report. A major residential appraisal 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. Transaction activity has dropped off noticeably, and there has been a large increase in the number of listings. Some buyers that had signed contracts for units under construction earlier this year are having trouble getting financing at the contract price now that market values have dropped. Many of those having difficulty selling their apartments are putting them up for rent, boosting the number of rental listings substantially--particularly in doorman buildings. Average asking rents are reported to be down 1 to 4 percent from a year earlier.

Inventory is currently at 2 years. Will be at 4 years by July.

The carnage at Merrill Lynch is just about to begin. Hello, Charlotte!

Nothing can stop this.

Inventory is at 11.7 months steve.

"Inventory is currently at 2 years. Will be at 4 years by July."

So, when do ya think it'll be time to buy?

"Inventory is at 11.7 months steve."

No it's not. According to urbandigs.com, in the last 30 days 252 contracts have been signed.

http://urbandigs.com/

252 * 12 = 3,024 contracts per year. Inventory is 9,000 apartments. That is a 3-year supply, but I was generous given that it was the holiday season.

The 11.7 month figure assumes Miller Samuel's 10-year historical average of about 8,500 transactions per year. We're not even at half that.

"when do ya think it'll be time to buy?"

When prices and rents start going up, and we're a long way away from that.

It seems like your perfect storm scenario may not materialize. People are still buying real estate, employed, etc. Yes, there are people that have lost their jobs. But to say that an entire market of buyers no longer exists is a blanket stereotype, similar to: all gays have impeccable fashion taste. It's a generalized, oversimplified statement that, according to Mona Lisa Vito of My Cousin Vinny does not hold water.

To state what the real estate market will look like 5 months from now is being bold, if not foolish, esp. for someone who professes to not having any interest in buying real estate. Why is on on this website religiously anyway? Does he view him as being the CEO of streeteasy discussions? If that makes him feel better about himself....?

Just for reference, the national housing inventory was 10.7 months as of 11/30/08.

Steve's projected four-year inventory-to-sales ratio seems pretty unrealistic.

That said, while the national numbers seem to have peaked, the Manhattan numbers are in a strong uptrend. In addition, there will be lots of new construction coming on stream in the new year and Manhattan sales are just staring to plummet for all the reasons we understand.

We are in the bottom of the first inning.

steve, how do you even have a clue about what is going on at Merril Lynch?
Bank of America is completing a huge office tower in Times Square. Did it ever occur to you that they want to their investment banking to remain in NYC? Interesting that you who don't even work for them, think you know what's going on. I considered you as a source, and from your numerous previous errors in postings, as very suspect, if not purely speculation and rumor.

We'll wait to see what Merrill Lynch, BofA decide to do, not what YOU think they should do. Last thread I read, you were a translator, not a corporate strategist. Maybe you wish you were, but you're a translator who admitted his business fell flat in Dec. Guess you're not even that good.

> It seems like your perfect storm scenario may not materialize. People are still buying real estate,
> employed, etc.

Great logic.

You are concluding that the Wall Street crisis didn't affect real estate by looking at the contracts signed.... before the Wall Street crisis...

> But to say that an entire market of buyers no longer exists is a blanket stereotype, similar to: all
> gays have impeccable fashion taste.

Even worse logic. 75% of buyers are gone. Sales volume hit the floor. That isn't an opinion, that is what has actually happened.

> To state what the real estate market will look like 5 months from now is being bold,
> if not foolish, esp. for someone who professes to not having any interest in buying real estate.

No more foolish than taking the advice from the people who called it wrong...

"When prices and rents start going up, and we're a long way away from that."

Crystal ball please: Maybe that'll be 1 yr from today? 2 yrs from today?

"Topper is absolutely correct, the Beige Book numbers are for contracts, whereas the Q4 report is for closings. I don't really trust the Beige Book data as much for that reason. tech_guy, you're right though, nyc10022 likes to jump the gun a bit. I do think we'll see something close to that figure for closings in the Q1 reports, but we'll have to wait and see. The sales volume drop is significant as well, though each report has varying numbers on that."

You call it "jumping the gun", I call it not looking at 6 month old data...
;-)

BTW, the last stat (article posted in this board) says 10% of contracts aren't closing (the 10% of buyers walking away piece). So, now only are you talking about old data, its also not quite correct data... many won't actually sell.

The good news is, there will be no bounce, so being 6 months behind the curve won't hurt those looking to buy too badly.

How accurate is it to annualize December contract signings to come up with an annualized sales figure?

btw, all the stats they give are YoY, which 'aint off peak.

Anybody have the QoQ off the report?

See my second posting, myc10022.

oldbuyers = tech_guy = LICComment:

"Bank of America is completing a huge office tower in Times Square. Did it ever occur to you that they want to their investment banking to remain in NYC?"

Yes, actually, it did occur to me & I already said that much of that would stay here. I said trading and back office functions would be located to where it's cheaper.

For the record, BofA is completing that building with Durst and I think another partner. Its purpose is to consolidate offices. Merrill leases in BPC. Guess where they're going to go? It won't be a net addition of staff, not for a long time to come.

"Interesting that you who don't even work for them, think you know what's going on."

I read the newspaper. They have said that they are going to eliminate 35,000 jobs from the combined firm, and reduce costs by $7 billion a year.

"We'll wait to see what Merrill Lynch, BofA decide to do"

They've already announced it.

"People are still buying real estate"

About 3,000 a year.

"To state what the real estate market will look like 5 months from now is being bold, if not foolish,"

No, it's actually pretty easy. Look at current listings, add new listings, new development, subtract contracts, and voila: there it is!

"Maybe that'll be 1 yr from today? 2 yrs from today?"

I have no idea.

"How accurate is it to annualize December contract signings to come up with an annualized sales figure?"

Miller Samuel says new contracts are down between 35% to 75% from last year. Call it 50%. That gives you a 2-year supply.

December's numbers give you a 3-year supply.

"That's not possible"

Why not? You don't think a new dev in a fringe area priced at $1,600 sqft could drop more than a co-op in a prime area priced at $1,100 a sqft? steve, you are back to blanketing the market and, for an economist, that is a horrific way to look at things.

One of the things that intrigued me in the article was JM's quote:

"Almost no new contracts were signed on condominiums in the quarter."

I tend to associate condos with new construction in particular. Sounds to me like this market may be freezing up in particular. I'm guessing this tends to be fairly high-end. May presage a growing supply of rentals - and perhaps particular "percentage price decline" weakness in the high-end and multi-bedroom market.

"You call it "jumping the gun", I call it not looking at 6 month old data..."

Except there really is no other reliable data. That doesn't mean your hunches are wrong - it means they're just hunches.

As for the Fed Beige Book numbers, it's really tough to read that much into them - all we have is that little paragraph Topper reposted above. It's loaded with caveats and doesn't give too many specifics, which is why I prefer looking at the quarterly reports (not that they're without problems themselves, but still, better). They may be a good indicator of what to expect in the Q1 reports though, and that's the only real value I see from them here.

Topper, I liked your second posting, thanks... but I meant seeing it in median total sales...

Your analysis has it down 10% in the last 2 quarters, which is pretty quick. But I'm curious to hear how it hits up top.

> You don't think a new dev in a fringe area priced at $1,600 sqft could drop more than a co-op in a
> prime area priced at $1,100

Strawman argument.

I don't remember a whole lot of "fringe" at $1600, and I don't remember a whole lot of "prime" at $1100.

The only place I remember 3-5k psfs is prime. I think thats a bubbly as it gets.

You said this, JuiceMan: "New devs will get crushed, resales will be soft but will not tank."

"you are back to blanketing the market," if I might be so bold.

You are assuming a radical price difference between new development and resales, but it's not the case:

Sales in Manhattan
We found 1,889 listings in new developments
Median price: $1,622,000 Median size: 1,279 ft² Median price per ft²: $1,351

The figures for all listings are:

Sales in Manhattan
We found 9,192 listings
Median price: $1,199,000 Median size: 1,148 ft² Median price per ft²: $1,135

The difference is $216 per square foot, or 16% less for all listings. But new development are all condos, which go for a higher premium than co-ops.

If the price differential you stated were in fact the case, then you might have an article. But if it were the case it wouldn't last long, because the products are substitutes.

You should have studied economics a little harder.

might have an article = might have an argument.

You need to use the historical 10 year average when looking at inventory numbers to get an accurate read, not just the current rate to cherry-pick your numbers.

"No. Tracking it the way Case-Shiller does is the most accurate way." Because this model gives me the number I want, therefore it must be true.

"They have said that they are going to eliminate 35,000 jobs." Yes, over a period of SEVERAL YEARS.

Also, Merrill has had a large amount of their back-office operations and technology people based in Jersey City and Hopewell for years, so those people were never in NYC and will likely remain exactly where they are.

I also have several close friend at BOA in Charlotte and they are all saying the jobs are going to be floating up to NYC, so nothing appears settled just yet.

"When I started posting a year ago I called this the perfect storm. I was pilloried. Now what?" I am so insecure, please someone compliment me or at least argue with me so that I get some attention.

"You call it "jumping the gun", I call it not looking at 6 month old data..."

> Except there really is no other reliable data. That doesn't mean your hunches are wrong - it means
> they're just hunches.

They're not hunches (look up what a hunch is) they are simply reading of different data. You call the contract data unreliable, I think its a whole lot more reliable than old data if you're talking about the current. Beige book is the only current data we have. Its got problems (as do all the data sets), but old data is literally outdated.

I don't know how valuable any analysis on the effects of the Wall Street crisis can come from data that predates the crisis...

BTW, here are some more tidbits if you remove the brokerage company spin (not comparing to peak, comparing it to pre-peak periods)...

this is from the miller samuel site, about the closings data..

"Over all, average prices lagged about 14 percent from the peak in the first quarter of 2008"
"Average co-op prices were off 6 percent from the last quarter and 16 percent from their peak."

So, surprisingly, even with the outdated data... we've still got close to the 20% current analysis.

nyc10022

Here is the median numbers for Manhattan coop/condos. All data is pretty easy to manipulate on the MS website.

4Q07: $864 K
1Q08: $850 K
2Q08: $1,025 K
3Q08: $928 K
4Q08: $900 K

Seems to reasonably parallel price per square foot...which is the way I tend to think.

"You need to use the historical 10 year average when looking at inventory numbers to get an accurate read, not just the current rate to cherry-pick your numbers."

That's ridiculous. How does the number of apartments sold in 2000 affect the number being sold today?

It doesn't.

Cherry-picking is when you pick the numbers you want to get the result you want. You seem to want there to be a 1-year supply, but even the National Association of Realtors uses current uptake rates when analyzing inventories.

Your argument is like saying 18 million cars were sold in the US over each of the past 10 years, so 18 million cars will be sold this year.

Not.

Do you know what the "convention" is for annualized the uptake rate? Do you annualize monthly, quarterly data? Do you take trailing 12-month numbers? I simply don't know.

"They're not hunches (look up what a hunch is) they are simply reading of different data. You call the contract data unreliable, I think its a whole lot more reliable than old data if you're talking about the current. Beige book is the only current data we have. Its got problems (as do all the data sets), but old data is literally outdated."

Well, you're talking about a little blurb versus a fairly exhaustive report. Pretty big difference to me, but if that makes you comfortable, I won't stop you. And a hunch is a hunch if it's not backed up by data on closings, which comes out with these quarterly reports. Yes, they're a little late, but as I said, it's really all we've got (and really, most smart buyers are waiting at least another quarter, so what's the big deal to you whether it's now, end of Q1, or whenever it may be? The data IS coming - don't be in such a rush.). If the Beige Book were a little more in depth, and came out more frequently, you'd have a good case, but I don't see it.

PS - Can we agree now that the Miller Samuel report and the Prudential Douglas Elliman report are the SAME THING?

"If the price differential you stated were in fact the case, then you might have an article."

Well, using you logic actually strengthens my argument. Here are the numbers for co-ops:

We found 4,201 Co-ops with an address
Median price: $775,000 Median size: 900 ft² Median price per ft²: $863

The difference between a median psft of new dev condo and a co-op is $488 psft. So can I ask the question a different way? Can you stratify the market a little better to focus your 50% off claims? Does blanketing the market make sense?

"But if it were the case it wouldn't last long, because the products are substitutes."

Is a new dev in a fringe area a substitute for an established co-op in a prime area? Is a shitty co-op in LES comparable to 15 CPW?

> Here is the median numbers for Manhattan coop/condos. All data is pretty easy to manipulate on the
> MS website.

Weird, I was on there and couldn't find it... all the older reports, not the new one. Thanks for posting the data.

So, going by that... even the old data has... 12% off peak.

I get the brokerage will play the game announcing only YoY stats.... but you really think they'll keep doing that when they look bad?

If prices even stay flat, we'll be down 12% YoY next year... will they then only give QoQ numbers?

Watch, its gonna happen...

BTW, also notice that Q3 over Q2 was 9.5%

That one sound familiar?

"How does the number of apartments sold in 2000 affect the number being sold today?"

Straw-Man argument Steve. How many apartments sold in 2000 doesn't matter, but how many apartments sold in the past 10 years does matter. It matters a whole lot more than what the past few months sales have been. You are using a sample size that is too small to be an accurate gauge.

Using your logic, if 100 sales closed tomorrow we could then assume that we are averaging 36,500 units sold per year....ridiculous.

A 10 year average is used becasue it includes varios stages of the market and economy and this larger sample size is more accurate. You know this, but refuse to agree because it doesn't support the narrtive that you want to tell.

D'oh! Sorry for the typos.

Does nyc10022 have a job? Or is he one of the laid off investment bankers that are bitter at the world now?

JuiceMan, I didn't strengthen your argument. You started a different argument. If you say the price difference between co-ops and condos, that's one thing. But resales include condos.

Here are the stats for all condos:

Sales in Manhattan
We found 4,733 Condos
Median price: $1,475,000 Median size: 1,209 ft² Median price per ft²: $1,289

Here are the stats for new dev. condos:

Sales in Manhattan
We found 1,771 Condos in new developments
Median price: $1,645,000 Median size: 1,286 ft² Median price per ft²: $1,362

There is no difference.

What you have sort of proved is that there is a price differential between co-ops and condos, and we know that. There are many reasons for that differential. I believe it will remain.

So no, I don't come off my 50% claim. Do I think that each and every apartment will fall by the exact same amount? No. I never made that claim. But I believe that prices will rise and fall in tandem.

nyc10022:

Click on the DATA label (between CONTACT and GALLERY) tab at the top of the MS page.

http://www.millersamuel.com/data/index.php

Then you can get into their data base and look at your own neighborhood, condos, coops, medians, ppsf, etc.

bjw:

Miller Samuel seems to be the vendor for Elliman. Same data. Both present it as their own - but MS is the source.

Pretty neat.

NYC - I agree with you that the RE firms will always choose whatever data is in their favor the most, even that means choosing the least-crappy piece of data.

JM - I also think there is a big difference between a new development in Brooklyn and an established coop in a prime area. There is no way to get more of a breakdown on the data is there? That would be a lot of work and would not show a big chunk of the market in a positive light, so the RE indy has no motivation to do that.

waverly:

Pls. see my note to nyc10022 right above your posting.

All the data you're asking for is there for the asking. Really nice site that allows you to manipulate the data in lots of different ways.

"Miller Samuel seems to be the vendor for Elliman. Same data. Both present it as their own - but MS is the source."

Topper, I know that - it was in response to nyc10022's comments from another thread. Namely this one:

"I like the Miller Samuel report. I think the elliman and other "brokerage" reports are ass..."

"A 10 year average is used becasue it includes varios stages of the market and economy and this larger sample size is more accurate. You know this, but refuse to agree because it doesn't support the narrtive that you want to tell."

Not only don't I know it, the National Association of Realtors doesn't know it, either. Or anyone else:

"Rising supplies are particularly notable in California, where the median home price has shot up 21% in the past year to $463,540. The California Association of Realtors says the inventory of previously occupied single-family homes in Orange County was enough to last 7.5 months at the current sales rate in July, up from 1.4 months in April. For the whole state, the supply stood at 3.3 months in July -- the first time since February 2003 that the inventory has topped three months."

That is an article from 2004. Note the phrase "at the current sales rate."

That's the figure. Anything else is just stupid.

http://74.125.45.132/search?q=cache:9IdwL41CJNQJ:www.franklyrealty.com/wsj-bubble.pdf+supply+of+houses&hl=en&ct=clnk&cd=11&gl=us&client=firefox-a

Topper - Thanks!

"If you say the price difference between co-ops and condos, that's one thing. But resales include condos."

Fair enough, but condo's also include pre-war, pre-bubble condos and new devs within the last 5 years in both prime and fringe areas. These are all very different beings.

"What you have sort of proved is that there is a price differential between co-ops and condos, and we know that."

No, what I proved (using your method, not mine) is that there is a substantial price difference between a new dev condo and a co-op which could strengthen an argument that a new dev condo has further to fall than a co-op.

"So no, I don't come off my 50% claim."

I wouldn't expect anything less, all I hoped is for you to acknowledge that a 50% drop in co-op prices seems a bit aggressive based on where the current numbers lie.

"But I believe that prices will rise and fall in tandem."

Fair enough, but don’t you think it will be difficult to have an overall 50% drop in the market when 80% of Manhattan inventory is co-op at a median psft of $863? If you can show me how those numbers work than I will happily rescind my argument.

nyc10022: They always show YoY numbers. Always have, always will. There's a seasonality component (I've told you this before) which is why YoY matters more. There have been QoQ declines during the boom years that nobody cared about, because its typical seasonality and YoY was up.

"No, what I proved (using your method, not mine) is that there is a substantial price difference between a new dev condo and a co-op which could strengthen an argument that a new dev condo has further to fall than a co-op."

No you didn't, because there is no difference in price between new dev condos and all condos. Therefore, the difference is between condos and rentals.

"but don’t you think it will be difficult to have an overall 50% drop in the market when 80% of Manhattan inventory is co-op at a median psft of $863?"

No.

Here are the stats for downtown co-ops:

Sales in All Downtown
We found 870 Co-ops
Median price: $795,000 Median size: 900 ft² Median price per ft²: $972

For downtown condos:

Sales in All Downtown
We found 1,773 Condos
Median price: $1,800,000 Median size: 1,356 ft² Median price per ft²: $1,357

For new development:

Sales in All Downtown
We found 696 Condos in new developments
Median price: $2,152,500 Median size: 1,479 ft² Median price per ft²: $1,457

Again, there is no material difference between all condos and new development. The difference is between co-ops and condos. Co-ops are older, and many have financing rules that keep their price per square foot lower than condos, which have no such rules. Many have nutty boards that people don't want to be around. Many don't allow pieds-a-terre. Many don't allow animals. They are old and restrictive - that's why people prefer condos, and why there is a price difference.

And, in fact, that difference is to some degree illusory: if a co-op requires 40% down and a condo allows 0% down, then a condo will be more expensive nominally, but not actually.

Therefore, I think those ratios will remain the same.

But I could be wrong.

condos and rentals = condos & co-ops.

Not having a good day!

"No you didn't, because there is no difference in price between new dev condos and all condos. "

There is no way to break out the data steve, but there is a significant difference in new dev (in the last 5 years) and pre war / older condos. My guess is about $300-$350 psft.

"but don’t you think it will be difficult to have an overall 50% drop in the market when 80% of Manhattan inventory is co-op at a median psft of $863?"

"No."

You can say no, but you can't make the numbers work steve. Your downtown example reinforced my point. I will happily rescind my argument if you can make the numbers work.

Yes, Steve, use the NAR as your defense.

The historical average is more accurate because it includes more swings in the market to give a truer read over what will happen ove the next 6 months, 12 months, etc. Do you really think the marketr will continue on for 2 years at this absorption rate? Of course not. You are being lazy in your analysis becasue it suits your narrative. I don;t care what the number works out to be. I just want to use the most accurate data.

"I will happily rescind my argument if you can make the numbers work" versus "There is no way to break out the data."

How can I make numbers work when there's no way to break out the data? What specifically do you want me to do?

"there is a significant difference in new dev (in the last 5 years) and pre war / older condos."

No there's not. There's a significant difference in price between new dev (what's currently on the market) and co-ops. There is the same significant difference in price between all condos and co-ops.

Moreover, there is a similar (albeit smaller) difference between prewar co-ops and prewar condos:

Sales in Manhattan
We found 1,959 Co-ops in pre-war buildings
Median price: $975,000 Median size: 1,000 ft² Median price per ft²: $936
Information on Manhattan

Sales in Manhattan
We found 1,308 Condos in pre-war buildings
Median price: $1,549,500 Median size: 1,267 ft² Median price per ft²: $1,271

The difference has nothing to do with new development - the difference is due to the corporate structure. Look at 2 nearly identical Bing and Bing buildings directly across from each other:

299 West 12th - a condo:

http://www.streeteasy.com/nyc/building/299-west-12-street-new_york

Market Data
3 active sales listings: $1,839 per ft² (avg)

2 Horatio Street - a co-op

http://www.streeteasy.com/nyc/building/2-horatio-street-manhattan

Market Data
8 active sales listings: $1,090 per ft² (avg)

The difference has always existed between these buildings, precisely because of the ownership structure.

waverly - go away. The fact is that there is a 2-year supply of apartments on the market right now at the current pace of sales. Who gives a flying what the supply of apartments is at the pace of sales for any other year or years?

Anyone else notice the irony that stevejhx is religiously fixed to historical values for everything... except when present day tiny sample-sized values suit his argument better?

Yeah, that's what I thought you'd say. You told us yesterday that you were extremely flexible and open-minded. Survey says....not so much.

tech_guy, I truly admire your ability to keep arguing with steve. not sure if you have children but you'll be an excellent, patient father.

"You told us yesterday that you were extremely flexible and open-minded."

Use whatever numbers you want regardless of how senseless it is. The fact is that at the rate apartments are currently selling, there is a 2-year supply. The fact is also that at the rate that apartments sold over the last 10 years, there is a 1-year supply.

If you wish to make up your own theories about which is the proper rate to use - the one that economists and even the National Association of Realtors uses - feel free. For that matter you could use the rate at which properties sold in 1865.

tech_guy - Exactly! I also find it ironic that the guy who cries about ad hominem attacks on a daily basis resorts to "Go away" when his faulty logic is called out.

i've never heard steve cry about an ad hominem attack. i've also never seen him express any obsession with historical numbers. he always says that it doesnt matter what something sold for or rented for in the past. what matters is how much it is worth now.

"How can I make numbers work when there's no way to break out the data? What specifically do you want me to do?"

Show me how you can get a blanket 50% decrease in the market when 80%+ of the Manhattan market is co-op. That would equate to $431 psft for a co-op (1999-2000 levels??) or co-ops wouldn't fall as much and condos would need to fall more than 50%. Which one is it steve?

"The difference has nothing to do with new development - the difference is due to the corporate structure."

Stay on topic steve. I'm not discussing why there is a difference in co-op vs. condo prices, but you continue to bring it up. It is irrelevant to the point I'm making.

eah: Thank you :) I don't argue with stevejhx directly any more. I know he never admits he's wrong on anything non-trivial. Every once in a while he says something meaningless and "admits" he's wrong there, which is why he continues to claim he admits being wrong all the time. But he's never done it on anything of any substance.

You better be careful. stevejhx already outed me for being LICC, oldbuyer, and even petrfitz. If you and I agree too much, he's going to realize that we're also the same person. streeteasy doesn't actually have a discussion forum - its just one massive 1-on-1 IM system, between stevejhx and one other person. That other person just has a few hundred screen names...

i've never heard steve cry about an ad hominem attack. OH,really, then you must go back through old threads...he endlessly uses the term. for a while he was like a two year old with a new phrase. i swear there is a string in that guys back that spouts four or five sentences.

tech_guy, you're right, i'll have to through a few attacks your way to create a sense of confusion.

"i've also never seen him express any obsession with historical numbers."

You must not actually be reading his posts. Hint: 12x.

"It is irrelevant to the point I'm making."

It's actually not. It's irrelevant to the point you're trying to make, but it is the point that you made.

"Show me how you can get a blanket 50% decrease in the market when 80%+ of the Manhattan market is co-op."

Because some will go down more than 50% and others will go down less than 50%. There are apartments, such as this one:

4G 2-BR $1,149,000

http://350bleecker.com/newsletters/listing.html

Directly below where I used to live, which the listing states is 950 square feet but it's actually 800 square feet, which is $1,436 per square foot. I expect that apartment will fall to about $800 psf. Apartment 2P - smaller, less desirable - sold for $1.3 million a year ago, or about $1,700 psf.

That's how I get 50%.

All uptown co-ops:

Sales in All Upper Manhattan
We found 315 Co-ops
Median price: $419,000 Median size: 900 ft² Median price per ft²: $488

I expect they will fall to $250 per square foot.

For all of the West Village:

Sales in West Village
We found 87 Co-ops
Median price: $698,000 Median size: 750 ft² Median price per ft²: $1,090

I expect that will fall to $500 per square foot.

That would be about 2002-2003 prices.

I might be wrong. But I don't think so.

"he always says that it doesnt matter what something sold for or rented for in the past. what matters is how much it is worth now."

That is correct. What I have said is that things will revert to the mean - that's where I use historical data. But all that is important for today's market is today's market. Not yesterday's, or tomorrow's.

Remember, it was tecchie who claimed that tomorrow's prices are correlated to today's. If you look at the stock market, that is apparently untrue.

"Remember, it was tecchie who claimed that tomorrow's prices are correlated to today's"

Link? I don't even understand what you mean, nevermind believe its at all related to anything I actually said.

Steve loves to "out" other people as having aliases...I wonder how many he has?

nyc10022 and stevejhx? maybe...what other 2 people spend 15 hours everyday on streeteasy making the same points? I find it very hard to believe 2 people are on here at all hours day and night, holidays included, making the same points.

We can safely say he has at least 1 other alias to take the pressure of him when he is wrong...his alias conveniently supports him and says, such as happyrenter, "I've never heard stevejhx..."

He is pointless arguing with. Classic Napoleon Complex. You are wasting your time even entertaining his antics. Who is he anyway? One renter, with little net worth, in a city of 8MM+. His opinion is just that and he is set in his ways.

oldb - I have no other aliases. Ask Matt.

I doubt Matt cares much what goes on here, given how long it takes him to clean up the inappropriate threads. He's usually 3 days behind.

oldbuyers, take it easy. I really doubt stevejhx uses another alias here - I never understood the purpose of doing so, although there is a handful of obvious cases of "multiple identities" on StreetEasy.

"Because some will go down more than 50% and others will go down less than 50%. There are apartments, such as this one:"

oh boy. So you are saying that co-ops will sell at a median of $431 psft or not?

JM - I agree. To get 50% down for the market, which is 70% coop, would suggest that condos are getting absolutely whacked or coops are going down 45%.

Steve has also been saying for the past few days that the market is already down 20% and needs to go down another 40%, which makes his prediction 60% off Peak, not 50%.

Here comes the backpedal....

wave: correction...down 20% in 2008..then down another 40% in 2009 equals down =down 52%...new level is 48% of old high....Round 4,827 to Steve. the other 4,826 rounds went to the rest of the posts. Congrats Steve.

"So you are saying that co-ops will sell at a median of $431 psft or not?"

I don't know because I don't know what particular co-ops will be on the market in the future, and that will directly affect the median as it shows up here.

I told you how I think we will get down from the peak. I gave you examples of a specific apartment, and of specific areas. If you can tell me exactly which apartments will be for sale on what date, then I will make a prediction for you. But I don't know that.

Median is not a good way to measure price changes. The Case-Shiller method is.

"Steve has also been saying for the past few days that the market is already down 20% and needs to go down another 40%, which makes his prediction 60% off Peak, not 50%."

I was waiting for some dumb sucker to take that bait. I'm glad it was waverly.

Thanks for doing the math for me, patient09. Sorry you feel that way about the other rounds, however.

"I was waiting for some dumb sucker to take that bait."

Thanks for another ad hominem attack....I was waiting for you to show your true colors yet again.

Are you guys telling me that stevejhx intentionally made an issue needlessly complex and then quibbled about semantics instead of actual substance? That's so unlike him.

Hahaha!!!

The prey thinks he is the hunter....so funny!

stevejhx: "I have no other aliases. Ask Matt."

Obviously you know he won't reveal that information. I'm 99% sure you've asked him if I have any aliases, and he obviously didn't answer you.

No one can be certain, but I don't think Steve has any other aliases. I am sure there are a couple of people who do that, but it is likely a very small number of people. Who would care that much?

I should qualify that by say I don't think Steve has any aliases her on SE. Out in the real world, who knows....

Finally, JuiceMan, I never, ever said that median prices would fall by 50%. You said that. I said that prices would fall by 50% from their peak last year. It's not the same thing.

Give me any apartment in an area I'm familiar with & I'll tell you what I think it's worth. Precisely what it was worth in 2003. But note that looking on the 350 Bleecker website, prices increased on an individual apartment level nearly sevenfold in 10 years, far more than the median price increased.

That's why Case-Shiller data are so different from NAR's median data.

"Finally, JuiceMan, I never, ever said that median prices would fall by 50%. You said that. I said that prices would fall by 50% from their peak last year. It's not the same thing."

You are right steve, that is what you said. I choose median because it is easy to discuss and understand but it isn't a perfect measure by any means. However, you are the one making the bold, blanket market predictions. I would think you would have some sort of model where you could convince me that 50% across the entire market could actually happen. If not, stating 50% off of peak is not only completely useless but painfully inaccurate any way you slice it.

“Give me any apartment in an area I'm familiar with & I'll tell you what I think it's worth.”

Throwing out examples of a few apartments (as you did above) reinforces my point that you need to segregate the market and make predictions based on a basket of properties. I’m not sure you realize it, but by making that statement, you are agreeing with the point I have been making all along.

"Throwing out examples of a few apartments (as you did above) reinforces my point that you need to segregate the market and make predictions based on a basket of properties."

You're right - I do agree with you that you make predictions based on a basket of properties. That's why the median price doesn't work - the basket of properties changes from month to month.

But I don't agree with you that the market necessarily needs to be segmented. It is just as valid to discuss the entire market as it is to discuss submarkets. Will prices fall more in Harlem than they do in TriBeCa? Who knows. You need to look at the individual apartments and add them up.

Which is exactly what I said: "If you can tell me exactly which apartments will be for sale on what date, then I will make a prediction for you."

"is just as valid to discuss the entire market as it is to discuss submarkets."

Is it? If I'm in the market for a UWS co-op near the park below 85th st. should I give a crap about an overpriced new dev on the 51st and 11th? Is it helpful for reader on this site to see silly prognostications of “50% of the entire market” when it is a virtual impossibility? Do you get what I'm saying steve? Unless the co-op market in Manhattan reduces to 1999-2000 levels you cannot have a 50% decrease (from peak or whatever you chose) in Manhattan. Give as many examples as you want, you have yet to say anything that tells me why the co-op market is going to decrease to these levels.

Conclusion: 50% is a complete fallacy made up by people on this site to scare people. That is all there is to it.

JuiceMan, on the one hand you acknowledge that I never said anything about median prices, and on the other you are claiming that I said there would be a 50% decrease in median prices.

I never said such a thing. I said on an apartment-by-apartment basis, the same way the Case-Shiller index is done. Price declines calculated that way are different from price declines calculated as medians or means.

I also never said 1999-2000 levels. I SPECIFICALLY said 2003. Repeatedly. And not the median price.

What is it about that that you don't understand?

"when it is a virtual impossibility"

It is far from a virtual impossibility. Just as prices go up, they can go down.

"Finally, JuiceMan, I never, ever said that median prices would fall by 50%. You said that. I said that prices would fall by 50% from their peak last year. It's not the same thing."

Steve, if you're not defining "prices" as the median, what are you defining it as?

oldbuyers... club your wife lately.. or is she just doing dishes while you watch Ewing again, tonite. On another front, how many open houses do you go on the weekend, even though you never plan to upgrade from your Studio on the east side? Are you that bored?

Leave Stevie alone... anyone who gets up and does standup has balls the size of baseballs.... and his writing on all things seem quite reasonable and I for one have been impressed with his depth of knowledge in all fields. You my friend know how to watch your wife do dishes, put down people who actually contribute to SE and yep.. your'e gonna lose your shirt in the NYC RE market...

Say hi for me to agentrachel at the open house you'll go to this weekend... and do me a little favor and sing in as w67th... It'll make her freak :)

Wow. Down 3.6% in a Q4. I am so scared. Yawn.

Anyone wanna bet Q1 2010 beats Q1 2009 in medial resale co-op per foot?

Real people who bought real co-ops to live in seem to be doing just fine. :)

Co-ops should sell for *more* per foot than crappy location condos, not less, since at least you know your neighbors have jobs and are real people with references.

w67thstreet, you MUST be bored with domestic bliss. Maybe it's time for you to take your balls out of your wife's purse and go back to work. Surfing the internet all day while the rest of us are productive members of society is leving you very jaded. :(

"I SPECIFICALLY said 2003. Repeatedly."

That's fine steve, but the problem is 2003 levels won't get you to 50% (insert steve’s measurement here) market correction.

"And not the median price."

By the way, we are not even talking median prices. I am specifically talking median price per square foot, which is a damn good measure of where prices are going. You can piss and moan about using a measure like median price per square ft but you can say prices will go down 50% from peak without any backup? What exactly do you mean by prices declining by 50%? Be more specific.

Admit it steve, this is all total fiction to get a rise out of people.

JuiceMan, now you caught on...
stevejhx is bored in his life and decided to make an unbelievable claim like Manhattan real estate will drop 50% in value, then attempt to see how many stupid and uneducated people he can get to agree with him and wow at his magic math. He twists data, contradicts himself in writing, cherry picks data and uses market samples from across the board to achieve his desired result. Some of the sheeple on this site are so dumb and thick they actually believe it. He gets off on it...making ridiculous statements and then coaxing people into believing him.

I'm really surprised you have tagged along entertaining it! You should have opted out long ago and tried to converse with pragmatic people.

"I'm really surprised you have tagged along entertaining it! You should have opted out long ago and tried to converse with pragmatic people."

I opted out a long time ago but occasionally still throw rocks at the beehive to see what happens.

"By the way, we are not even talking median prices. I am specifically talking median price per square foot"

How could we not be talking about median prices while simultaneously talking about median prices? Per apartment, per square foot, per square inch, it doesn't matter: it's a median, which means that is the point that half of apartments sold above, and half sold below. It is not the measure of any particular price for any particular property.

Comparing what I am saying to what you are saying, according to Case-Shiller, home prices are down 18% from October 2007 through October 2008.

http://www.nytimes.com/2008/12/31/business/economy/31econ.html?hp

Yet median prices were down only 11.3% for the same period.

http://www.boisehomesandlandforsale.com/boise_median_home_prices.htm

That's a 59% difference in how much prices have changed.

Median price a worthless measure because it doesn't take the stock into account. I've always said that, and always will.

"What exactly do you mean by prices declining by 50%? Be more specific."

That from peak to trough, the price of the same apartment sold in Manhattan will fall 50%. So a unit that at the peak sold for $1 million will eventually sell for $500,000.

Can I be clearer? That is the point when owners' carrying costs will approximately equal rent, meaning that if you buy a property to rent out you will at least break even on Day 1. That is the point where property prices equal twelve times annual rent.