Housing Market WIll Bottom in 2009

I'm guessing no. Or if so it'll be followed by years of flat prices.

since Manhattan only started to fall it's going to take time for prices to tumble...look at sniper he's listing two bedroom one bath for over $800k where's the tumble there???

I'm with Julia.

I think Manhattan will bottom late 2010 and then flatline at best for a few years.

New York is lagging the rest of the country and inventory is rising rapidly. It will continue to rise as lots of new construction comes on line.

In addition, unlike the rest of the country, Manhattan affordability is very low. Need substantial price cuts before demand reappears - particularly given the very weak Manhattan economy. The old Masters of the Universe (I-bankers) ain't comin' back the way they used to be.

julia- they have been falling for a while now

Some of the analysts have written reports saying that Manhattan decline started later and will continue longer than the rest of the country.

Maybe Moodys wrote this, I forget which firm. But that is the consensus.

but look at one bedrooms, studios are still listing at almost 500k...look at 401 east 74 street studio, nothing special $479k...one bedrooms listing at $750..235 east 22nd street. It's going to take a while

Julia, I just saw a one bedroom (yes, cookie cutter, but still), decent size UES for $425K. But fundamentally you have a point, prices hadn't been falling in any pattern until very recently. Now, change is in the air.

Just a thought:
taking any prediction for the final truth is dangerous, I believe. What if all those waiting to own a property to live in (speculators ought to be wiped out no matter what) will wait for a dramatic drop and devaluation of real estate, and the drop never becomes that dramatic, then what?
I'd guess it would be normal to behave normally: to look around, to see what the market offers, to haggle and to get yours. Like with any major purchase. People don't normally wait for a price on a car to drop to pennies, do they? They identify their needs and go about fulfilling those needs. If a car is too expensive, they buy another car, less expensive, but THEY BUY A CAR without waiting for it to cost $26.84.

desfilles.. we are at a point where buying a car is $10,000.00/month in carrying cost while you can take the subway for $2.00. And the Mannheim auctions are trading $130K 2 yo porsches for $75K and is expected to drop further as loss of jobs forces "high rollers" to unload all asset class including girlfriends w/ fake boobs. just ask yourself desfilles... do you feel like putting in a bottom all by yourself? Knock yourself out and use that $15K first purchase credit...

Desfilles - Prices simply have to decrease to match the decreases in other things - income, wealth, job security, etc. It has to happen. And if it doesn't people simply won't buy.

Similarly with your car analogy, if the would-be car buyer thinks he might lose his job, he might give up on the car altogether and have to find other transportation. Until such time as the car sellers get a clue, and reduce the price.

Real estate prices must drop to meet buyers' reality, or would-be buyers will remain renters.

Market-timing is often dangerous - it's true.

However, the price of a car hasn't tripled in a few short years. And the price of cars hasn't dropped 25% in the rest of the country.

Given the amount of speculative interest in real estate in recent years I'm quite content to let things settle for a couple of years.

I can rent or buy. When I do the basic arithmetic I conclude that renting is a much better "financial" decision today. Tomorrow? Hopefully, quite different.

I'm looking forward to the day that Julia gets her spacious one-bedroom in a luxury building for just over $500 K.

Just another thought:

People already have a place to live. Those people "waiting to own" do already have a residence somewhere else. It is not like a new group of aliens invade Manhattan with their singular purpose to own a primary residence. It is not like a large number of homeless people make a decision tht they have had enough of being homeless and decide to buy.

You need to convince people that buying a different property is better for them than staying where they are. Which by the way may be a place that they already own and would need to sell in order to buy the different place.

Your question is, Then what? Well I guess then they simply stay where they are. If moving is too expensive then guess what? You don't move!

Just another thought. Sometimes people don't buy a car. Sometimes when they need to fulfill the need for transportation they rent a car. Sometimes they lease a car. Sometimes they take the bus or the train. Sometimes they buy a Vespa scooter or a bike.

I heard one of the auto guys on MSNBC talking about auto sales and the scrap rate. His point was that car sales could not stay below 10mm units because we scrap 12mm cars a year in this country. But what if the scrap rate was 6mm cars? what if Amercians held onto their cars for longer than a few years? what if 3 cars per household on average went to 2 cars per household? What if more than a few people learned how to live within their means? Couldn't car sale sfall below 10mm? Sure they could.

jake,
what you just described is called a recessionary cycle. and yes, car sales can certainly decline.

I am sure at the year end they will print "Housing market will bottom in 2010".

... or by the year end they will print "Housing prices skyrocket with everyone running to invest in non-amortising asset..."

manhattanguy - unless it's Roubini.

desfilles, i'm taking the under on that one.

Just one thing to add.
LOOK OUT BELOW!!!!!!!
End of 2009?
Obamaptomism.

falcogold..that's good.

housing prices skyrocket? that would be surprising given that trillions of dollars in wealth have vanished, credit markets are unstable, unemployment is skyrocketing, and incomes are declining. it isn't simply a question of whether people want to buy real estate. there is simply the fact that they have less money with which to buy it.

roubini just said today on Bloomberg that houses prices will not bottom this year -- still have further to go..

Actually housing prices will bottom this year AND they will keep falling. How? Because house prices are not going to bottom in all 50 states at one time. Prices in major bubble areas like FL, CA, AZ, and NV will lkely keep declining well into next year. The same is true for rust belt areas that lost all their factory jobs, like Michigan, Ohio, and Indiana. But other areas will most likely see a bottom this year.

And Manhattan started falling (somewhat) much later than the other areas of the country.

Most of the country started falling in late 2005/ early 2006.

Moody's....aren't these the same assholes who were putting lipstick on pigs with the plague when they were rating securities, CDO's and bonds as triple A but they were really toxic. Wouldn't it be in their best interest to call a bottom to stem the collapse of NY real estate so they keep the massive lawsuits from drowning them in more litigation? .

Unemployment is going through the roof. Many people who were just getting by won't be. If not turned around soon, who knows what could happen to housing and where.

If the government needs to raise interest rates, even moderate amounts, to make debt more attractive huge numbers of ARMs will reset. Why do you think the government is frantically trying to get banks to modify loans? They want the ARMs and hybrid products converted to fixed mortgages and they want it done yesterday. And then there are some of the worst loans written in this whole mess, in 2006 and 2007, when they really should have known better.

No bottom until 2011. That's my call.

thanks for the shout out julia! are you talking about this:
http://web.me.com/seif69/11K/HOME.html

this apartment is listed 8% off peak (check it out - same apartment, lower floor, low light, worse condition went for $950K 15 months ago)

8% off PEAK...that's exactly what I was saying...I believe the market will drop 20% off '03 pricing. Everything is falling apart in the ecomony and that's an emotional response but we have to wait and see. I passed your block last week and it is a nice bldg in a terrific area. good luck.

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Unemployment is going through the roof. Many people who were just getting by won't be. If not turned around soon, who knows what could happen to housing and where.

If the government needs to raise interest rates, even moderate amounts, to make debt more attractive huge numbers of ARMs will reset. Why do you think the government is frantically trying to get banks to modify loans? They want the ARMs and hybrid products converted to fixed mortgages and they want it done yesterday. And then there are some of the worst loans written in this whole mess, in 2006 and 2007, when they really should have known better.

Good point and remember these defaults will trigger billions more in derivative and cdo defaults thus taking out more counterparties like insurance companies and banks.

sniper...looked at the listings in your bldg. (I've been to see the studio) and the K line which i believe is your line one sold in '04 for $650k and you're asking over $800k....

okay. offer me $651K and it's yours.

sniper, are you joking or not? I mean, '04 pricing may look generous a year from now. Then again, it is your property and your decision. I don't own and I couldn't be happier about it. BTW your apt. looks very nice in the pictures, but I won't start a bidding war with Julia.

generous to who? the buyer or the seller?

"presuming we see strong action by policymakers to help support the economy and the housing market"

One might add "effective action" to this conditional. So this is an If, then phrase. I have my doubts about the "if", and therefore about the "then." The housing market cannot recover if the economy is in free fall.

> Most of the country started falling in late 2005/ early 2006.

So, 4 years to bottom.

Didn't we tell everybody the last crash took 4 years to bottom, too?

2012, here we come!

as I've been always saying.... the bottom will be close when... the bottom-calling finally stops.

the creation of this thread shows that we are not there yet.

i mean, we just finished the appetizer. main course is till on its way people. sharpen your knives and get ready.

Dr Doom and the Black Swan say stay in cash, best place to be because the name of the game is persrving capital in this deflationary period and then within three years bottom pick equity's and real estate.

http://www.cnbc.com/id/15840232?video=1027496846

> the bottom will be close when... the bottom-calling finally stops.

Right on....

It seems to me that some folks are so bitter about their previous "investments" that they've got nothing left but personal insults.

previous investments as in current homeowners buying their properties?

>as I've been always saying.... the bottom will be close when... the bottom-calling finally stops.<

Totally......and once it hits some sort of bottoming area it will probably churn around that level for quite sometime.

Real estate cycles are loooooooong (>12 years straight up followed by ??? straight down) in nature. Someone looking for a quick sell off followed by a prompt recovery to something that resembles the absurd valuation currently being left behind in fantasy land, hasn't been shaving for too long.

bidding war??? I couldn't and wouldn't pay $650k...we all have to see how the real estate plays out. A year from now some of us will be very happy and others well...

> previous investments as in current homeowners buying their properties?

Ask ruff what he's so bitter about...

This is all pretty stressful stuff, so I just want to say that w67th, you had me at girlfriends with fake boobs....

alpine.. come on now, a bottom here, a bottom there... pretty soon nobody will want to be on top.

Yo. McHale... yep... Oabmulus is just a side show... the derivatives market (or lack thereof to get rid of this stuff) is like your $10MM under water mortgage and the stimulus is like your $2K credit card bill :), but these youngins never saw a recession... just High School Musical and Britney as real "entertainment."

Okey dokey sniper... you just set your price at $651K... here comes me with a smile... I'd shake your hand and say..."this been on the market long?...hmmmm... okay I don't got broker, you got none, 6% off... hmmm... market sucks 10% off, hmmmm my wife and I don't need financing (buying for my 5yo)... 10% off, hmmm... let me look behind me... nope no other buyers... 10% off... where am I now... total of 36% off your $651K price... call me by tonite by 6p.m. if you want to do trade, I'll be back with cashier's check for $10K to be held in escrow... OBTW I've got 4 other bids in today... whoever comes back first gets to sell his studio to my 5yo :)

ruffie: I almost punched my RE borker when I refused to bid above $2.5MM, she was like "you can't afford it?".... I was like FU, you can't afford it... there's a difference between seeing the bubble and refusing to play and an inability to pay for something. FYI... that same unit (line) is listed at $2MM (thats' ask).. so me thinkz I made $800K at least in the last three years :) Also FYI.. .sometimes she likes it on the bottom... but mostly she likes on top... she says something like "she likes to control the pace." Fine by me either way...... good luck jawboning this market up, seems like Geithner's doing a grt job.

waverly.... it's a tough choice ... gf w/ fake ones or a real 997T? Me thinkz... I'll keep my lovely wife and do the car x2:) The problem with fake boobed girls is that it reflects a lack of substance up where it counts (just get a push up bra... works for me... oh and a garter belt... mmmmmmmm)....

serge07....soooooooooooo looooooooooog.... only market I know where you can "almost" time it :) and no we ain't there by a looooooooooooog shot :)

He had a dream...
He saw 7 fat cows who then changed to seven skinny cows. The Pharoh summend Joseph to interpet the dream. 7 years of excess followed by 7 years of famine. The Pharoh took this to heart and made preperations. Late 2005 we met the first of the skinny cows. Late 2011 we should meet the last of the skinny cows.
I had a dream...
A hot dog was chasing a bagle into a tunnel.

c'mon! you live in NYC!

B-A-G-E-L

Sorry...had my eyes in a lox

I was about to hit the post button on the following
julia - your 3rd comment about people already having a place to live was one of the most intelligent I've seen you post. I think you're leaning a lot (either from this board of from your apt search
and then I went back to verify which # post it was, and. well... jake... good 1st comment.

>and no we ain't there by a looooooooooooog shot :)<

W67th, I think we're on the same wavelength. :)

Some of my favorite indicators that I've mentioned here before, are the market valuations of real estate investment trusts that are saturated with NYC and Manhattan real estate investments. These are real time indicators in my view and none of this lagging business that may be subject to interpretation.

Let's see, SL Green is now trading below year 2000 levels and it has plummeted nearly 90% in value after peaking in the !Q 2007. Good stuff.

Another good one, Vornado Realty Trust. If it drops another 10% in value, it will be at the top end of a range dating back to year 2000. This is another doozy that's totally plunged from it's 1Q 2007 peak valuation.

Last but not least, Alexander's Inc. which has fallen around 60% in value from its 1Q 2007 peak. The chart looks like crap and I expect the value chopping to continue.

All three RE investment trusts had massive run ups from 2003- 1Q,2007 very closely resembling residential market performance and the parabolic moves. I may be wrong, but dismissing the crash in the NY commercial values doesn't make a lot of sense to me.

alpine292: "Most of the country started falling in late 2005/ early 2006."

Tucson, Arizona ...mid-2005
Before parent's death, RE agent said to list $600,000-700,000.
Then, after death...one month later...same agent offered us $350,000! Due, to jobs and family issues, we took the offer...just for closure.

Agent renovated and listed for $625,000+
Nada
Dropped price again and again...now offering in high $300,000's.

Moral: Don't try to time the market....karma may exist.

"nyc1002 you ability to regurgitate facts and figures you do not understand. Your inablility or bother to fact check references along with your constant stream of threads qouting sources you have not vetted, leaves you with the name of "BottomBoy""

Yes, keep insulting... I'm sure it will undo all your RE losses.

WOW, are bubble buyers bitter...

LOL @ nyc10022. I think plateau it better then bottom do anyone agree?