Look Out Below: NYTimes Article...1/2 price auctions on the way.
Started by 415buyer3
almost 17 years ago
Posts: 16
Member since: Feb 2008
Discussion about
http://www.nytimes.com/2009/02/26/realestate/26condo.html And Do I Hear $2 Million? No? $1 Million? Sold! By TERI KARUSH ROGERS As housing prices around the country began to tumble about three years ago, the New York market kept rising, and only in the last year did it begin to show some weakness. But now sales in the city have slowed so significantly that worried developers are planning to... [more]
http://www.nytimes.com/2009/02/26/realestate/26condo.html
And Do I Hear $2 Million? No? $1 Million? Sold!
By TERI KARUSH ROGERS
As housing prices around the country began to tumble about three years ago, the New York market kept rising, and only in the last year did it begin to show some weakness.
But now sales in the city have slowed so significantly that worried developers are planning to auction off some luxury condos in the spring for around half of what they were asking just a year ago.
Developers who are awash in unsold inventory see auctions as a tactic to jolt a paralyzed public to life.
A two-bedroom on the Upper East Side, for example, could be marked down to $1.1 million from $2.2 million.
Real estate professionals say Wall Street’s continued prosperity through much of 2008 shielded New York from the forces that were pushing the rest of the nation’s housing market down.
But today, with the credit crisis and the Wall Street meltdown, fewer people are able to buy homes. With the economic crisis spreading worldwide, there also seem to be fewer wealthy foreigners buying Manhattan condos.
Real estate auctions, rarely used in New York, have the potential to both move property and indicate to reluctant buyers what the true market prices are. Given the current sales drought, even a handful of auctions could reset prices for new condominiums citywide, said Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company. He said he expects the auctioned properties to sell for 40 to 45 percent below the asking prices of the first quarter of 2008, when the market peaked.
Today, almost every signpost is bleak for new developments. Buyers who signed contracts long before condo projects were completed are expected to walk away in droves this coming quarter. In many cases, these buyers will be abandoning deposits of $100,000 or more that pale in comparison to the slide in market values. Many buyers may have lost jobs, or may be worried about their jobs, while others will be unable to get financing.
Accelerated Marketing Partners, a real estate marketing firm, is discussing auctions that will start as early as April on five mid-range to high-end projects in desirable neighborhoods of Manhattan and Brooklyn. “We’re in a deflationary, devaluating market in which no one knows the value of anything anymore,” said Jon Gollinger, the co-founder and chief executive of the firm, based in Boston.
There are 8,000 new condos on the market in New York City, and 22,000 more are scheduled to go on the market by the end of next year. “You’ve got all this inventory that’s been based on this young financial buyer and international buyers,” Mr. Gollinger said, but those buyers have been hard hit by Wall Street’s collapse.
Most developers declined to discuss the subject. But one lender, who asked not to be identified because his plans are not final, said he intends to hire Accelerated to auction a large group of units in April. “We have quite a large investment in a new condo building in a good location downtown,” he said, but sales have been “very, very slow.”
With just under 50 units, the building is currently priced around $1,000 per square foot. Minimum bids will probably be set at around $600 per square foot, the lender said.
Henry Justin, a developer who has 48 units left to sell in a 73-unit Midtown building, said sales hit a wall in December. “All the deals I’m doing are all-cash, mostly from foreign buyers, because only people with a private banking relationship can get any money out of a bank right now,” he said. Mr. Justin doubts that lower prices will sell many units because so many buyers cannot obtain mortgages.
Accelerated, the auctioneer, has been working with the development marketing group at Prudential Douglas Elliman. Andy Gerringer, the group’s managing director, said he has urged clients to consider auctions, because many of them are selling only one or two units a month, if any.
In the auctions run by Accelerated, only a portion of a building’s unsold units are sold in one swoop, to avoid depressing values more than necessary. The remainder are marketed the traditional way, at the new, lower auction prices.
Auctions of unsold New York City condos in a wider range of quality and locations are also anticipated in May by the national auctioneer Sheldon Good & Company. This week, the company announced a deal to auction all 17 units of a completely unsold new condominium building in Weehawken, N.J.
“Large amounts of inventory will be offered at aggressively low or no minimum bids,” said Jeffrey L. Hubbard, an executive managing director at Sheldon Good.
Auctioneers say inquiries from developers rose in early January. “The general impression I get is that this period of denial — the market-will-get-better mentality — is coming to a close,” said Mr. Miller, the appraiser, who will likely be working with Accelerated to determine the market value of units put up for auction. “The reality that everyone is coming to grips with is that demand levels will remain lower until liquidity is returned to the mortgage markets.”
Auctions have succeeded in loosening other battered markets, like South Florida. In two held there last fall by Accelerated, 30 to 40 units in partly sold developments went for about half their peak prices. The developers say sales have picked up since then, at prices slightly below those received at auction.
Auctions have not been used in New York in any significant way since the early 1990s, when an oversupply of rental-to-co-op conversions collided with a recession and double-digit interest rates.
While many developers resist auctions, investors are pushing for quicker sales. “Auctions will hit New York City because of pressure from the underlying lender,” said John Di Fiore, the senior vice president at Real Estate Capital Partners, which runs a fund that invested in two Manhattan condo developments.
The reduced asking prices could bring condos in line with prices seen just a few years ago. The average sales price of a two-bedroom Upper East Side condo was just above $1 million in 2002. It rose to $1.5 million in 2004, and to $2.2 million at its peak in 2008.
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Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
i was just about to post this! you beat me by less than a minute! nice.
Now that the chest beating is complete...
What an article!
This can have a profound effect over the speed of change. This can break the floor and send $ to the basaement. Remember, markets presist and over correct. There will be a brief but exciting window of 'SUPER BOTTOM' during a extream over correction. This is the magic moment to make the big deal of the day. Now keep in mind I'm making this stuff up as I'm going along but, it stands to reason. That might make this summer fill with bargins. Any thoughts?
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Response by sniper
almost 17 years ago
Posts: 1069
Member since: Dec 2008
i guess i got sniped by my social life. 11 hours ago i was just returning home from a stellar Thievery Corporation show at Terminal 5.
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
Geez. This site is wacko.
You have lots of people posting comment after comment declaring "prices will fall 50%" (even though zilliions of top buildings show nowhere near that level of discount..so far.
You have endless tedious threads about personalities on here that I and I am sure many others do not care about.
AND THEN THIS STORY COMES ALONG -- THE MOST SIGNIFICANT NEWS OF REAL MARKET MOVEMENT WHICH SHOULD SHAKE THE MARKET LIKE NOTHNG ELSE HAS-- AND,,,AS OF LATE PM...THERE ARE SEVEN COMMENTS.....
FOLKS....THIS IS REAL NEWS
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Response by nyc10028
almost 17 years ago
Posts: 93
Member since: Jan 2009
jim... dont get your last comment (in caps) ?
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Response by patient09
almost 17 years ago
Posts: 1571
Member since: Nov 2008
It's actually old news, kinda like "weekend at bernies", This market has been dead a long time, she just forgot to fall down.
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
My point is that people on this site keep talking about huge discounts from market peak but many, many buildings show nothing like that, and, suspiciously, many of the headline huge drops people salivate on here are about units above say 2mm, or just weird outlyer apartments in some dump building
But now we have real news of large sales at potentially large discounts. This is much more significant than chat on here, and yet the chatters aren't commenting on it....which puzzles me.
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Response by kspeak
almost 17 years ago
Posts: 813
Member since: Aug 2008
there have been about 10 threads on this article, starting late last night.
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Response by alanhart
almost 17 years ago
Posts: 12397
Member since: Feb 2007
Jim, carefully re-read this whole thread from the beginning and you'll understand why you're puzzled.
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Response by alanhart
almost 17 years ago
Posts: 12397
Member since: Feb 2007
You can skip over the original post, though.
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
alan. actually I don't understand what you are saying, respectfully. My point has nothing to do with the "thread" comments per se ..it has to do with the lack of comment and attention here (in a site where lots of comments are made on sometimes inane pure speculation/opinion posts like "dow to reach 6000" "market will fall 455") on real, pretty hard news.
Again, if this story is accurate, it will, i would think. have a huge impact on the market.
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
my 455 was meant to be "45%"
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Response by patient09
almost 17 years ago
Posts: 1571
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jim, respectfully, I think it is simply realization of what many have been thinking for 18 months. ex..if many believe prices are 15% of peak. This could cause the cascade down to -35-45%. Not unexpected, only thing interesting at all is that this could be the trigger, not where the market is headed. The fun is in the prediction, not the actualization.
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
But...uh...predictions are ...just predictions so they need to be discounted in value. Hard news is worth more, unless it was anticipated by the market (and if it were anticipated by the market it would have been reflected in lower prices as of now); in other words, idle chatters on here are not "the market', and hard news is, to me at least, infinitely more important. Does anyone care if someone posts a "fun" post saying, in essence, "I believe prices will fall 70% from peak"...to me it is boring, blow-hard stuff.
or don't we care because it's in the New York Times?
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Response by aboutready
almost 17 years ago
Posts: 16354
Member since: Oct 2007
I think it is pretty much true, at least for the moment, columbiacounty. I had read something to that extent recently, I can't recall where, but it stuck with me because we have always leased. Not that the NYTs never makes mistakes, but I don't think the financing arms of the car companies are prepared to give leases any longer.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
i have no idea if this is a come on (have only invested 1 minute to make a point) but take a look
again...i don't know if this is for real but it's hard to believe that they have a message to contact your dealer about a lease just so the dealer can tell you " hah, hah no way."
and, if this is true, what does the mighty New York Times say?
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Response by 80sMan
almost 17 years ago
Posts: 633
Member since: Jun 2008
It's an AP article. Not written by The Times staff. "Jackson said banks have tightened the reins on the amount of money they're willing to lend."
Over the past 7 years a lot of NYers have been playing "Daddy Warbucks" with their good credit and next year's bonus. The party is over. Oh, well. It was fun while it lasted.
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Response by aboutready
almost 17 years ago
Posts: 16354
Member since: Oct 2007
i think that they still exist, in theory, as a product. i don't think they're available, but maybe some of the government's money went to car financing arms to promote sales. my info was from late last year.
i'm not saying that the NYTs is right, but I have owned (and leased) a jeep before and I wouldn't be surprised in the slightest by a bait and switch by an auto company. come in, my pretty, and we'll discuss your options.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
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not sure i get your point. not the times fault but their broker?
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Response by 80sMan
almost 17 years ago
Posts: 633
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"I have 5 years in mortgage and maint in the bank". The chic lie for 2009.
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Response by 80sMan
almost 17 years ago
Posts: 633
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Last year's lie was "I could retire tomorrow if I wanted to"
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Response by columbiacounty
almost 17 years ago
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now i'm really sure i don't get your point.
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Response by falcogold1
almost 17 years ago
Posts: 4159
Member since: Sep 2008
hey jim,
lots of threads following this story with more comment.
this story just anounces the nail the we (the SE additcs) have collectivly been hammering into the RE coffin for at least 6 months now.
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Response by 80sMan
almost 17 years ago
Posts: 633
Member since: Jun 2008
We're being overrun by zombies: property owners who don't know they're financially dead. The developers are the first to wake to the fact that they're the living dead. As in the movie, best to shoot them in the head.
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Response by happyrenter
almost 17 years ago
Posts: 2790
Member since: Oct 2008
jim,
i don't know what apartments you've been following, but from where i sit prices are coming down at all price points in all types of buildings all over the city. high end has been hurt worst of all, but the pain is everywhere. this is interesting but not really news--it is the obvious and necessary consequence of the huge inventory buildup. what's to comment on?
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Response by jimstreeteasy
almost 17 years ago
Posts: 1967
Member since: Oct 2008
falco..thanks...yeah i realized later there are more threads which removes my point about not noticing this article (and i dont know why this thread was started)
happyrenter; I wish the pain would spread more rapidly and deeper because I want to buy. My "sanity check" is the building i last lived in in Manhattan eight years ago , when I paid 2800 or 2900 rent for a one br (640 sf), which was offered for sale to me by the landlord in 2000 at 380K. A similar unit could be rented now for say 3200 apparently, but the purchase ask prices in the building for these units is still around 750k. Rent almost the same but prices doubled. The buidling isn't even very nice, so i don't know how to explain this. It is called Chelsea Grand: http://www.streeteasy.com/nyc/building/270-west-17-street-new_york
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Response by scoots
almost 17 years ago
Posts: 327
Member since: Jan 2009
This article is dumb - if the apartments didn't TRADE at these prices last year, they were never worth that ask to begin with ... hence, they aren't 50% off so much as X% discounted from their original worth ... which we don't know because they weren't priced appropriately last year. I am not denying that the market is decreasing - but to benchmark against unhit bids is just dumb.
i was just about to post this! you beat me by less than a minute! nice.
Sniper got sniped ;)
Yes, but by http://www.streeteasy.com/nyc/talk/discussion/8828-nyt-condo-auctions-in-manhattan-and-brooklyn ten hours ago.
You guys are late to the party.
http://www.streeteasy.com/nyc/talk/discussion/8828-nyt-condo-auctions-in-manhattan-and-brooklyn
Now that the chest beating is complete...
What an article!
This can have a profound effect over the speed of change. This can break the floor and send $ to the basaement. Remember, markets presist and over correct. There will be a brief but exciting window of 'SUPER BOTTOM' during a extream over correction. This is the magic moment to make the big deal of the day. Now keep in mind I'm making this stuff up as I'm going along but, it stands to reason. That might make this summer fill with bargins. Any thoughts?
i guess i got sniped by my social life. 11 hours ago i was just returning home from a stellar Thievery Corporation show at Terminal 5.
Geez. This site is wacko.
You have lots of people posting comment after comment declaring "prices will fall 50%" (even though zilliions of top buildings show nowhere near that level of discount..so far.
You have endless tedious threads about personalities on here that I and I am sure many others do not care about.
AND THEN THIS STORY COMES ALONG -- THE MOST SIGNIFICANT NEWS OF REAL MARKET MOVEMENT WHICH SHOULD SHAKE THE MARKET LIKE NOTHNG ELSE HAS-- AND,,,AS OF LATE PM...THERE ARE SEVEN COMMENTS.....
FOLKS....THIS IS REAL NEWS
jim... dont get your last comment (in caps) ?
It's actually old news, kinda like "weekend at bernies", This market has been dead a long time, she just forgot to fall down.
My point is that people on this site keep talking about huge discounts from market peak but many, many buildings show nothing like that, and, suspiciously, many of the headline huge drops people salivate on here are about units above say 2mm, or just weird outlyer apartments in some dump building
But now we have real news of large sales at potentially large discounts. This is much more significant than chat on here, and yet the chatters aren't commenting on it....which puzzles me.
there have been about 10 threads on this article, starting late last night.
Jim, carefully re-read this whole thread from the beginning and you'll understand why you're puzzled.
You can skip over the original post, though.
alan. actually I don't understand what you are saying, respectfully. My point has nothing to do with the "thread" comments per se ..it has to do with the lack of comment and attention here (in a site where lots of comments are made on sometimes inane pure speculation/opinion posts like "dow to reach 6000" "market will fall 455") on real, pretty hard news.
Again, if this story is accurate, it will, i would think. have a huge impact on the market.
my 455 was meant to be "45%"
jim, respectfully, I think it is simply realization of what many have been thinking for 18 months. ex..if many believe prices are 15% of peak. This could cause the cascade down to -35-45%. Not unexpected, only thing interesting at all is that this could be the trigger, not where the market is headed. The fun is in the prediction, not the actualization.
But...uh...predictions are ...just predictions so they need to be discounted in value. Hard news is worth more, unless it was anticipated by the market (and if it were anticipated by the market it would have been reflected in lower prices as of now); in other words, idle chatters on here are not "the market', and hard news is, to me at least, infinitely more important. Does anyone care if someone posts a "fun" post saying, in essence, "I believe prices will fall 70% from peak"...to me it is boring, blow-hard stuff.
Ｔｏ ｂｅ ｃｌｅａｒ， Ｉ ａｍ ｗａｉｔｉｎｇ ｔｏ ｂｕｙ ａｎｄ ｗａｎｔｓ ｐｒｉｃｅｓ ｔｏ ｃｒａｓｈ ａｎｄ ｃｒａｓｈ ａｎｄ ｃｒａｓｈ ｍｏｒｅ．
ｌｏｌ．．．ｔｈｅｒｅ ｉｓ ａｎｏｔｈｅｒ ｐｏｓｔ ｗｉｔｈ ｍａｎｙ ｍｏｒｅ ｃｏｍｍｅｎｔｓ．．．ｗｈｉｃｈ ｍａｋｅｓ ｓｅｎｓｅ．．．ｓｏ ｉｍ ｍｏｖｉｎｇ ｔｏ ｔｈａｔ ｔｈｒｅａｄ ｔｏ ｒｅａｄ ｃｏｍｍｅｎｔｓ
is it possible that the New York Times may have gotten some or all of their facts wrong?
note this article that claims that auto leasing is over with except for a few luxury and foreign brands. is that true?
http://www.nytimes.com/aponline/2009/02/26/us/AP-Meltdown-101-Selling-Cars.html
or don't we care because it's in the New York Times?
I think it is pretty much true, at least for the moment, columbiacounty. I had read something to that extent recently, I can't recall where, but it stuck with me because we have always leased. Not that the NYTs never makes mistakes, but I don't think the financing arms of the car companies are prepared to give leases any longer.
i have no idea if this is a come on (have only invested 1 minute to make a point) but take a look
http://www.jeep.com/dma/501/index.html?zip=10024&family=null#family=commander&zip=10024
again...i don't know if this is for real but it's hard to believe that they have a message to contact your dealer about a lease just so the dealer can tell you " hah, hah no way."
and, if this is true, what does the mighty New York Times say?
It's an AP article. Not written by The Times staff. "Jackson said banks have tightened the reins on the amount of money they're willing to lend."
Over the past 7 years a lot of NYers have been playing "Daddy Warbucks" with their good credit and next year's bonus. The party is over. Oh, well. It was fun while it lasted.
i think that they still exist, in theory, as a product. i don't think they're available, but maybe some of the government's money went to car financing arms to promote sales. my info was from late last year.
i'm not saying that the NYTs is right, but I have owned (and leased) a jeep before and I wouldn't be surprised in the slightest by a bait and switch by an auto company. come in, my pretty, and we'll discuss your options.
not sure i get your point. not the times fault but their broker?
"I have 5 years in mortgage and maint in the bank". The chic lie for 2009.
Last year's lie was "I could retire tomorrow if I wanted to"
now i'm really sure i don't get your point.
hey jim,
lots of threads following this story with more comment.
this story just anounces the nail the we (the SE additcs) have collectivly been hammering into the RE coffin for at least 6 months now.
We're being overrun by zombies: property owners who don't know they're financially dead. The developers are the first to wake to the fact that they're the living dead. As in the movie, best to shoot them in the head.
jim,
i don't know what apartments you've been following, but from where i sit prices are coming down at all price points in all types of buildings all over the city. high end has been hurt worst of all, but the pain is everywhere. this is interesting but not really news--it is the obvious and necessary consequence of the huge inventory buildup. what's to comment on?
falco..thanks...yeah i realized later there are more threads which removes my point about not noticing this article (and i dont know why this thread was started)
happyrenter; I wish the pain would spread more rapidly and deeper because I want to buy. My "sanity check" is the building i last lived in in Manhattan eight years ago , when I paid 2800 or 2900 rent for a one br (640 sf), which was offered for sale to me by the landlord in 2000 at 380K. A similar unit could be rented now for say 3200 apparently, but the purchase ask prices in the building for these units is still around 750k. Rent almost the same but prices doubled. The buidling isn't even very nice, so i don't know how to explain this. It is called Chelsea Grand: http://www.streeteasy.com/nyc/building/270-west-17-street-new_york
This article is dumb - if the apartments didn't TRADE at these prices last year, they were never worth that ask to begin with ... hence, they aren't 50% off so much as X% discounted from their original worth ... which we don't know because they weren't priced appropriately last year. I am not denying that the market is decreasing - but to benchmark against unhit bids is just dumb.