Paging Julia (et al): declines on the low end

excuse me, should read "every buyer's ear." i have the flu, forgive me.

hpr: feel better, but while the rest of us are working today, would you mind finding me my next apt. Detes are the following:

CPW
70th-88th
above 5th floor
at least 4 windows on the park
southern exposure also
7 rooms or greater
at least 2800sqft
decent condition, no estates
$1,300psft

thanks,
hope you feel better

patient,

i think it's safe to say that doesn't exist yet, at least in terms of asking price. you're talking about the most coveted corner (southeast) on the most coveted stretch of the second most coveted avenue in the city, plus you want a large apartment, plus good condition, plus a mid/high floor, plus a certain number of windows on the park. the apartments you are talking about traded well above 2000 psf--often above 3000 psf--at the peak. just because the market is weak doesn't mean you can get whatever apartment you want at whatever price you set.

you never know, remember we(I) have the edge, like in the spaghetti westerns, we have the sun at our back in the shootout. But, they have an apt they can't sell, I have cash. I have the edge! Asking price is irrelevant. Bid price is the only thing that matters, and mine is $1,300psft.

hmmm....then you've given me an impossible task. how can i possibly know what bid price someone is going to take. i can show you all the CPW apartments between 70th and 88th street that meet your various criteria and are asking a lot more than you want to pay, but i'm assuming you've already looked at them. if asking price is irrelevant, how am i supposed to determine if something can be had for a given price?

and you know what, we have a winner:

http://www.streeteasy.com/nyc/sale/226564-coop-225-central-park-west-upper-west-side-new-york

6th floor, right smack in the center of your area, southeast corner, a whopping 10 windows facing the park, approximately 3,000 square feet, fine condition, with a current asking price of $1550/psf. there's your new apartment.

you think E.B's apt will trade at 1,300

happyrenter...thank you for showing me the listings...but $465k for one room in manhattan...I've come to the point where i'm going to rent. I look at listings that closed in '04 and alcove studios were $250-$350k so $465k is still too high for me. Not based on what I could afford but what I want to spend for a studio.

i don't know who E.B. is. i have no way of knowing what any one particular apartment will trade for, but i do think that apartment COULD trade for that.

julia,

first, let me point out that this is not a studio, it's a one bedroom. but here's the deal: it's one thing to say "prices are higher than i want." it's another to say "prices haven't come down." do i think this is a great deal? no. do i think prices will come down further? yes. do i think it's a good idea for you to rent? yes. but prices have come down and are coming down, that's the point. they may not be where you want them to be, but they are down.

hpr: well done, I have not seen this one...I think the Alden is just so so, and don't care for the layout. But I like the trend. and the effort, awesome. This is the link to E.B.'s apt.

http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=1252728

patient,

the floor plan on that will never be ideal but it can be dramatically improved with a few changes. i agree that the building is far from top tier for CPW but you're going to have to wait a while for 1300/psf on a large apartment on the southeast corner of the beresford. i don't care for that apartment at 285--it doesnt really take advantage of its south-east corner location, and i would not call a 16x18 living room in an apartment that size 'significantly scaled.' but it does have a more classic layout (And it's asking a lot more money).

1 exaqmple of a price decrease does not mean that ALL units in this range are selling at a loss or discount.

That is the problem with you naysayers, you look at 1 peice of data or the headline macro trends and then you guys come out with a blanket statement like ALL low end units are price decreased, or there is absolutely no good real estate investment. This is simply not the case. The majority of units in the low end are not selling for a loss. A majority of the real estate bought in the last year will eventually be sold at a profit.

Your are just scared bunch that is looking for any reason not to invest to make yourself feel better about not owning.

petrfitz,

where did i make the "blanket statement like ALL low end units are price decreased"? i never made any statement like that whatsoever. i started a thread to show some declines on the low end of the market--why are you so scared of the data? you are creating a straw man argument and then arguing against it--you're basically arguing with yourself. i never said, nor do i believe, that ALL low end units have had their asking prices cut. that would be idiotic.

your right. the southeast corner will never have a view..The St. Urban is blocked by a newer highrise to the south

"you look at 1 peice of data or the headline macro trends and then you guys come out with a blanket statement like ALL low end units are price decreased, or there is absolutely no good real estate investment."

"Your are just scared bunch that is looking for any reason not to invest to make yourself feel better about not owning."

Do you see the irony here?

happyrenter...a one bedroom that's a terrific price reduction.

happyrenter, just a quick question after reading your posts all over this siteIf you are truly happy with the life/financial choices you have made, why do you need to justify them to others here? How does it matter how others feel about your life--or how the prices may be coming down on average--especially in an anonymous forum? You are investing too much energy into justifying your happy existence...

With this said, I grew up (here in Manhattan), always hearing that renting was for "poor people." Maybe because of this, it doesn't surprise me to hear that renting is cheaper than owning in some cases. I don't consider my primary residence an investment, and I don't particularly care if its market value goes down by X% today.

By contrast, I would not want to rent if I could avoid doing so because I'd like to be the OWNER of a place I really like and I can take care of for a long time, without thinking that it's not really "mine" and I could be asked to move at the end of the lease term.

So, let us be independently happy--you as a renter and I as an owner, because we clearly are focused on different aspects in life. Schadenfreude, to me, isn't a way to achieve happiness.

1 apartment does not equate to "data" - 1 apartment is just 1 apartment out of how many? is 1 apartment statistically relevant? No.

duvravcic,

i think you've been reading someone else's post or projecting something onto me that isn't there at all. i come to this site for the most logical reason in the world: to share

it's not schadenfreude to point out that the market is collapsing, it's facing up to reality. just because you capitalize the word OWNER doesn't make the word any more impactful. if you own and you don't consider it an investment, then you shouldn't care what happens to the value of your apartment.

if you grew up believing that renting was for poor people, then i assume you weren't poor and have never been poor. good for you, you are lucky. the real estate bubble prevented many people from achieving their own dreams of owning in manhattan, and while it is sad for some people to lose money in real estate, it is also happy for others to have the chance to have what it sounds like you inherited. as you say, you don't consider your home an investment. so why are you on this site? i'd imagine you wouldn't care if the value of your home plummets.

i've been a happy owner, now i am a happy renter, and i have no doubt i will be a happy owner again. i'm not trying to justify my choices to anyone. all i am doing is discussing the state of the real estate market.

pardon, that should read: to share information about the state of the market, and to receive updates on it from others.

We don't tend to focus on the smaller units that much as a group here. Julia, take a look at the new listings for the last week or so. I saw a number of apartments that were moderately ineresting in the lower price ranges, many of them had been taken off the market and put back on at lower prices.

Listing price is not the same as closing price. Prices have been going down, will continue to do so, and many if not most will close for less than you're seeing now.

"A majority of the real estate bought in the last year will eventually be sold at a profit."

Thats going to the top quotes list!

nyc10022 are you actually saying that a majority of the real estate purchased in 2008 will be sold at a loss? Would you be willing to put money on that? I will lay down $10K in a bank right now. We can settle the bet in 5 years based on indsutry data. Are you willing to put your money where you mouth is?

10022 won't take that bet, but

I would make a side bet with you.

residential properties in manhattan that "closed" in '08
that close again in '09, '10 or '11
>25% of those will be at a loss

Oh, I would go a lot further. Since petrfitz uses 5 years, I would put money on "the majority of apartments that closed in 2008 and are resold within 5 years (i.e. by 12/31/2013) will be sold at a loss"

>>if asking price is irrelevant, how am i supposed to determine if something can be had for a given price?
How about doing your job, and coming up with a valuation, based on current market conditions - oh sorry that means leg work!!

Ba DA: thats the point, most, not all, but most RE Brokers are too conflicted in their role to adequately value a property. So, you do your own work, value it, bid on it. If seller doesn't like it, too bad, move on, find the next one you like.

badaboom--my job? dude, i'm not a broker, it's not my job to come up with a valuation or do leg work. what are you talking about?

petrfitz,

i will bet that the majority of properties bought in '08 that sell again by 2013 are sold at a loss. and i will do you one better. adjusted for inflation, i will bet that the majority of properties bought in 2007 (the peak year) sell for a loss over a 15 year period. this was a huge bubble.

hey patient, how about reminding badaboom that i am NOT A BROKER.

hpr: I'm in a good mood today. Great stuff on the Hudson, great dinner last night. Taking the high road. I remember as a child my mother said. "If you don't have anything nice to say, say nothing at all" Lets focus on finding great apts at great prices, and heatedly(is that a word) debating valuations along the way.

happyrenter I will be happy to take your bet. $10K?

it appears that we have two bets:

1st, that the majority of manhattan real estate purchased in 2008 that is resold by 2013 will be sold at a loss.

2nd, that the majority of manhattan real estate purchased in 2007 sold by 2022 will be sold at an inflation-adjusted loss.

clearly there is no way we can actually make this bet and it would be more or less impossible to determine a winner. but if it were serious, i wouldn't pussyfoot around with 10k. bet a million, make it interesting.

happy renter lets just go with the first bet, and use data from industry resources. We will keep it simple if sale price in 2012 is greater than purchase price in 2008 then I win. If not I lose.

We can keep it at $10K and I know of independent 3rd party accounts that we can place the money in now and they will administer the wager.

Are you game?

yeah, clearly i'm not going to tie up $10,000 for five years in a scheme that is both illegal and being overseen by a third party--10k is not worth going to jail over. it's too bad, because that would be money in the bank :).

its not illegal in nevada. I guess that you are not willing to put the money up which is a sign that you are not a beleiver in your statements. I am bummed, it would have been a slam dunk $10K for me. That's a new engine for my yacht on Lake Meade.

sorry (Sp) Lake Mead. I always get tangled up with the PA roots.

wait--did you really just describe some power boat with a 10k engine on a manmade lake a yacht? wow you are obnoxious. if you want to sound like a big shot, at least say things that make you sound like a big shot.

if it's really legal in nevada, then lets look into it. we need to agree in advance on how we are going to adjudicate the outcome. but if you really believe in your side of the bet, why not a million?

and by the way, you still haven't responded to this:
petrfitz,

you might want to consider your examples of brilliant tech investments since 2000 a wee bit more carefully. if larry ellison had sold his oracle stock in 2000, he could have garnered over $40 a share; today it trades at $16. if bill gates had sold in 2000, (and in fact he did sell some in 2000) he could have gotten over $50 a share; now microsoft trades under $19. google, of course, did not exist as a public company in 2000 so that example sort of moot.

while it is certainly possible to have made money in tech stocks that one owned and held from 2000, it would have been extraordinarily difficult. virtually any name brand tech company that existed in 2000 traded substantially higher (often double, triple ten times) then than it does now: yahoo, even ebay (which peaked later), intel, ibm, cisco. that's the nature of a bubble. even good companies (like good apartments) can sell for prices they won't fetch again for years, decades, or ever. the major counter-example is apple, of course, which has performed wonderfully since 2000 as a stock and a company. but the examples you gave certainly do nothing to bolster your argument.

its a ship with several engines. $10K would get me a nice overhaul of one of my twins.

here is a typical boat on that "manmade lake" http://www.boatinglakemead.com/searchengine/Details.aspx?diid=1421917&bvdid=641&type=N&indid=1&sortCol=Length&sortDir=DESC

Google started in 1996. Where would those guys be now if they listened to NYC10022 and got out of tech in 2000?

also - in regards to stock prices you are analyzing solely on stock price, not counting dividends, cash compensation through employment, etc. Remember a few years ago when MSFT gave several Billion in cash dividends? I do. It bought that nice boat on Lake Mead.

Also NYC10022 and the other naysayers speak about market timing. That is a fools game and impossible to play. Even the Oracle of Omaha does not market time..

petrfitz,

you were the one who said "where would gates and ellison and brin" be if they had sold in 2000. the answer for gates and ellison is: a lot richer. are you so pigheaded that can't even acknowledge that? you really can't admit that the vast majority of tech stocks that existed in 2000 are down significantly if not precipitously from that time? just admit you gave bad examples and move on. i agree that market timing is silly. but you didn't need to be a market timer to see that microsoft and oracle and yahoo were overvalued in 2000. that's not market timing, that's security analysis--what the oracle of omaha DOES do. market timing is selling because you think a stock is going to go down. security analysis is selling because you think a stock is overvalued.

as for brin, as i said before google was not a public company in 2000.

and by the way, that typical boat from the manmade lake you just sent me? that's a powerboat.

"you were the one who said "where would gates and ellison and brin" be if they had sold in 2000. the answer for gates and ellison is: a lot richer. are you so pigheaded that can't even acknowledge that? "

ROTFL.

But, their stock paid 3c in dividends, so its cash positive... and therefore CAN'T be a loss...

Monday, January 31, 2005
Microsoft Dividend Boosts Personal Income

WASHINGTON — U.S. consumer spending advanced solidly in December as personal income shot up a record 3.7 percent on a big dividend payout by software giant Microsoft Corp. (MSFT), a government report showed on Monday.

The Commerce Department (search) said personal income (search) rose 0.6 percent in December when the impact of Microsoft's dividend payment was stripped out.

Consumer spending (search) climbed 0.8 percent in December and was up 0.9 percent when factoring in a small drop in prices. The department said the price index for consumer spending, a measure of inflation, declined 0.1 percent and was unchanged when volatile food and energy prices were stripped out.

Wall Street economists had expected personal income to rise 3 percent with spending up 0.9 percent.

Since individuals are unlikely to pay taxes on the dividend until this year, the Microsoft payout also drove disposable income up sharply. After-tax income rose by a record 4 percent in December, the department said. When adjusted for inflation, the gain was 4.2 percent, also a record.

The department estimated roughly three-quarters of a $32 billion dividend payment Microsoft made to shareholders in early December would count as personal income. In its report on Monday, it said that payment gave personal income a $24.8 billion boost.

happyrenter says "that's a powerboat." whats your point? Are you stating that boats with engines are not considered yachts?

ok, how can i be any more clear about this? microsoft's market value has declined approximately $350 billion dollars since the year 2000--not adjusted for inflation, which would make it even worse. please don't try to tell me that a $32 billion dividend payment has made that a good investment over this period.

people would take you a lot more seriously, petrfitz, if you could learn to admit a mistake.

no. i am stating that it is pretentious and self-inflating to call a mid-sized cruiser on a lake a yacht.

happyrenter - are you a day trader? because you seem to suggest that all investments should be short term, and investors should pop in and out of inevestments. Granted i didnt sell my MSN at the top price, but I bought in the 90's my shares have split several times, and the dividends have been quite nice income compared to my original investment. Should I have bought and sold the stock over the years to time the market? Shold I have taken my money out and tried to gues which stock was going to be hot next? That is market timing and a fool's game.

Also - please explain your comment about "powerboat?" IT makes no sense to me.

Believe me I make mistakes and admit to them. Selling my Genetech in 99 was one of my biggest.

petrfitz,

you specifically said "where would gates and ellison and brin be" had they sold in 2000. can you please just admit that both gates and ellison would be a lot richer? it's as simple as that. as for day trading, no, i'm not a day trader at all. but are you seriously trying to tell me that nine years is short-term? microsoft is still 1/3 its value in 2000. how long-term is my horizon going to have to be to make buying microsoft in 2000 a good investment?

anyone who bought microsoft before 1994 did great. before 1996 did well. before 1998 did ok. since then, badly. that's the truth, plain as day. if you bought early, congratulations. but you still should have sold in 2000 when it was quite obvious that the stock was part of a major bubble. that's not day trading, that's security analysis.

just admit you were wrong to say "where would gates be" if he'd sold in 2000. very simple.

> people would take you a lot more seriously, petrfitz, if you could learn to admit a mistake.

Which would be him admitting he knows nothing about RE.

Thats a problem, given his goal is to shill long enough so someone will buy his properties before he hits foreclosure...

as for the powerboat, here you go. i have two friends. friend a has a huge beach-front mansion in newport. friend b has a lovely beach house in quogue. if friend a invites me to his place for the weekend and says "would you like to come out for the weekend at my mansion in newport,' it's kind of obnoxious, but at least it is accurate. if friend be invites me to his place and says 'would you like to come out for the weekend at my mansion in quogue," it's both obnoxious and overblown. i mean, i guess you could come up with some strange argument that a nice beach house is a mansion, but why would you?

what you emailed me was a picture a nice motor boat. perhaps the marketing materials call it a yacht, but if i saw it in the harbor at st. tropez, i'd say "oh, there's another motor boat," not "wow, look at that yacht!" it's not impressive to inflate your possessions.

I would be willing to bet anywhere from $10K to $50K in theory (although I would insist on including transaction costs, since they're part of your gain or loss), but happyrenter brings up valid points that make the bet impractical. I have no interest in tying up money in some escrow for that long. Nor do I have any faith way of verifying that petrfitz will pay up without one. And of course, but the same token, he can't verify that I can.

As an aside, the only remotely plausible scenario I possibly see where I would lose the bet involves serious near-term inflation, since the bet is based on nominal $$.

ugh, sorry for typos.

I don't have a twin so step away.

Worth the read, although I am not sure if this is a broker driven piece. It strikes me as anecdote based (broker) rather than numbers driven and so the tone of the article feels a bit like, "buy now or forever be priced out." Q1 numbers should provide interesting guidance.

http://www.nytimes.com/2009/01/18/realestate/18cov.html?pagewanted=1&ref=realestate

401 east 74th street...alcove studio...$479k went to open house..broker said seller will not negotiate..i made an offer 30% less.