wall st bonuses

There's not enought bonuses in the world to begin to comsume all of the units in the nyc area at these current prices.

I have to agree with the comment above. Inventory is rising, old (used & not new) condos/coops can't sell & there are 30k units coming to the market every year for the next 3 years. How many millionaires are there????? Any reports coming from the real estate industry are obviously biased. Take a look at what leading economists from Merrill Lynch & Goldman Sachs are saying. These are the people that properly assess the markets, not real estate individuals. If real estate can go up 100% it can certainly come down. Also, new laws pass end of this summer that make it much harder to get ARMs and IO loans. On top of that over 1 trillion (yes that's true) ARMs and IO loans are resetting by end of next year. Good luck to them all!

arms and io loans resetting is offset by the amt of equity all those borrowers have built up. if there were a huge real estate selloff it would be a different story, but all of their homes have appreciated 25 to 40%. arms have been resetting for 5yrs now with pretty much zero effect to the markets. MAYBE that would hit some smaller markets in the US, but in more advanced markets like NYC and LA it will be a non-issue, as i said unless housing prices come off sharply.

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Gorm must be a realtor. It seems that your conclusion is "prices will only fall if they fall". I beleive philosophers call this a tautology. Are we to beleive that increases in inventory (54% increase YOY), decreases in absorption (10% decrease YOY) and decreases in sales prices (2-4% decrease YOY) are indications of a healthy market (stats from Corcoran's latest market report)? Higher secular interest rates consequently lead to lower relative home prices as purchasing power is reduced. Futher, some percentage of owners will be hit with budget-busting adjustments to their monthly payments and find themselves upside down on the underlying property - think about people who bought with 1 year ARMs last year and face a 40% increase in monthly payments right now. The market is weak right now and the only potential outcomes are (1) flat market for some time which assumes that no exogenous forces require sellers to lower their prices (i.e. job loss or continued increases in interest rates)until the current price trend line comes back down to the long term (20 year) regression mean (4-5 years assuming 5% YOY growth); or (2) 10-20% retreat in prices to get down to the the 20 year regression mean more expeditously.