RE getting better? Not with this outlook

this will be my Gloom & Doom post

M.T.A. Increases Fares and Cuts Services

The fare hikes on the subway and buses, including an increase in the base subway and bus fare to $2.50, from $2, will take effect on May 31.

Commuter rail fares will increase on June 1. Tolls on the authority’s bridges and tunnels will also go up, with the increase taking effect in mid-July.

The service cuts are far reaching. They include the elimination of 35 bus routes and two subway lines, the W and Z. Off-peak and weekend subway, bus and commuter rail service will also be cut back.

E.U. President Calls U.S. Stimulus the ‘Way to Hell’

The statement came just a week before a meeting in London of the Group of 20 which will bring together the leaders of the 19 leading industrial and developing nations and the European Union to forge an international consensus on the economic crisis. His comments also underlined potential ideological strains between Washington and Europe as Mr. Obama prepares to travel to Prague in less than two weeks for a summit meeting intended to bolster trans-Atlantic relations and show that the United States and Europe are united over economic policy.

Only five days ago, European Union leaders had reached a carefully constructed political truce designed to bury their differences and agree on a common policy ahead of the London meeting. At last Friday’s European Union summit meeting, they pledged an additional 75 billion euros to finance loans by the International Monetary Fund and to double a credit line for its struggling Eastern European economies.

Uh...maybe those California economists and the EU leaders need to get on the same page. Or maybe part of the DOOM message is that: no one knows what to do.

Manhattan Rents Falling, Falling

More evidence that it's a good time to be a renter in Manhattan.

Apartment giant Equity Residential has cut asking rents by an average 13% since February, bringing the total decline to roughly 25% !!! in a year, according to Macquarie Capital analyst Michael Levy.

In recent weeks alone, the Trump Place buildings on the Upper West Side saw prices slashed an average 15.5% !!!, he said. Studios got a nearly 20% haircut!!!!!

At the Riverside Boulevard address that boasts a round-the-clock concierge staff, a 421-square-foot studio starts at $1,920, excluding a free month of rent, according to Mr. Levy. In November of 2007, the asking price for a similar unit was $2,750, and the rent bonus wasn't offered, he added.

Because of the downturn in the economy, we believe that high-end apartment operators are having a much tougher time finding tenants willing to pay what they had been paying a couple of years ago,Mr. Levy said. It's tough to be renting to bankers in the city or anyone affected by the recession.

An Equity Residential representative declined to comment, citing upcoming earnings results. The Chicago-based company has more than 20 buildings in the New York metro area, with about half of those units in Manhattan.

Landlords are working harder than ever to fill apartments in a post-bubble world, said Jamie LeFrak, whose family owns tens of thousands of rental units region-wide. Unlike the sales market where sellers are holding out hope for a miracle L O L that will never come landlords will choose to rent at market rate immediately.

Y - cash flow is king or some has to pay the mortages - hopefully it's solidly financed otherwise.....

HT1 - did you forget to put in the part "Topolanek, whose government lost a vote of confidence Tuesday but who will remain EU president until a new Czech government is established?" You know the part that stated the guy who is criticizing the US moves just got kicked out of office? That his own country has no confience in him?

Yeah this guy is an authority.

Mortgage refi's up
Productivity up
Durables up
stock market up
real estate sales up

in 60 days of the new presidency.....

A GREAT GRAB$-BY
HAMPTONS HOMES GO FOR NEARLY HALF OFF

or A real lol REAL ESTATE DISASTER IN THE MAKING

Lucky buyers were able to purchase two luxury Hamptons homes for almost 50 percent off at an Internet auction of 16 properties in the tony East End.

One of the homes was a three-bedroom Victorian in Westhampton that has 2,277 square feet, a fireplace and a Jacuzzi.

It was listed for $800,000, but the buyer reached a deal for about $488,000 or about 39 percent off the listing price.

Enzo Morabito, one of the Prudential Douglas Elliman brokers who organized the sale, said the buyer got a bargain.

"You can't buy stuff like that in Westhampton," he said.

The other home is a 1,800-square-foot, three-bedroom condo in Southampton Village.

It was listed for $1,275,000 and went for $701,000, a 45 percent reduction.

Morabito, who organized the auction with fellow Prudential broker Vincent Horcasitas, said it was a success although agreements had been reached on only two of the properties.

"We jolted the whole East End market," he said. "Before, the buyers and the sellers were speaking two totally different languages in terms of price. They were so far apart, they were both crazy."

Also in the auction was a five-bedroom Bridgehampton house across the street from model Christie Brinkley's home.

It received several bids, but none exceeded the reserve price. Morabito has asked potential buyers to submit new bids.

Brinkley's ex, architect Peter Cook, said he considered buying the 5,000-square-foot home, which was first listed at $3,895,000, but decided against it.

"Any time anyone's offering a house at half the value, I think it's worth looking at," he said. "But even at a price that was a very fair deal for that house, I realized I wanted to stay where I am."

Cook, who lives in North Haven, said that "it's an interesting thought or dream that the kids could go back and forth between the two houses."

Another home on the auction block was an attractive four-bedroom in Quogue that was listed for $4.1 million. It got one bid for $1.8 million.

not sure if I would feel lucky as a buyer of properties in the Hamptons - even the rich are feeling the 'pinch' - a LOT of poeple seem to be still overleveraged to the tilt

Some things in life are bad
They can really make you mad
Other things just make you swear and curse
When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...

And...Always look on the bright side of life...
Always looks on the light side of life...

If life seems jolly rotten
There's something you've forgotten
And that's to laugh and smile and dance and sing
When you're feeling in the dumps
Don't be silly chumps
Just purse your lips and whistle, that's the thing

And...Always look on the bright side of life...
Come on, Always look on the bright side of life...

For life is quite absurd
And death's the final word
You must always face the curtain with a bow
Forget about your sin, give the audience a grin
Enjoy it, it's your last chance anyhow
So always look on the bright side of death
Just before you draw your terminal breath
Life's a piece of shit
When you look at it
Life's a laugh and death's a joke, it's true
You'll see it's all a show
Keep 'em laughing as you go
Just remember that the last laugh is on you

And..Always look on the bright side of life...
Always look on the right side of life...
Come on guys, cheer up
Always look on the bright side of life...
Always look on the bright side of life...

Worse things happen at sea, you know
Always look on the bright side of life...
I mean, what have you got to lose?
You know, you come from nothing
You're going back to nothing
What have you lost? Nothing!

y everything is UP

that's includes the number of apmt ready to be bought

10,999

lol

http://www.youtube.com/watch?v=dErG0hC_nVQ&feature=related

10,999 sellers looking for 10,999 buyers

WSJ: Commercial Property Faces Crisis

Commercial real-estate loans are going sour at an accelerating pace, threatening to cause tens or possibly even hundreds of billions of dollars in losses to banks already hurt by the housing downturn.

The delinquency rate on about $700 billion in securitized loans backed by office buildings, hotels, stores and other investment property has more than doubled since September to 1.8% this month ... Foresight Analytics in Oakland, Calif., estimates the U.S. banking sector could suffer as much as $250 billion in commercial-real-estate losses in this downturn. The research firm projects that more than 700 banks could fail as a result of their exposure to commercial real estate.
...
In contrast to home mortgages -- the majority of which were made by only 10 or so giant institutions -- hundreds of small and regional banks loaded up on commercial real estate. As of Dec. 31, more than 2,900 banks and savings institutions had more than 300% of their risk-based capital in commercial real-estate loans, including both commercial mortgages and construction loans.
...
At First Bank of Beverly Hills in Calabasas, Calif., , the amount of commercial-property debt outstanding was 14 times the bank's total risk-based capital as of the end of last year. Delinquencies reached 12.9%, compared with the average of 7% among the nation's banks and thrifts.

New Home Sales (official release from the Census Bureau):

Sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.7 percent (±18.3%) above the revised January rate of 322,000, but is 41.1 percent (±7.9%) below the February 2008 estimate of 572,000. The median sales price of new houses sold in February 2009 was $200,900; the average sales price was $251,000. The seasonally adjusted estimate of new houses for sale at the end of February was 330,000. This represents a supply of 12.2 months at the current sales rate.

Please note the plus/minus 18.3% for one-month changes. Yes, 18.3%! It’s a survey! Just like those political polls, but those surveys have margins of error around plus/minus 3%.

So, actually, new homes slaes might have been up 23% in a month. Or down 13.6%. (Even with the 7.9% plus/minus, the year-over-year trend is still stinky!)

no good news allowed here LOL

Japan%u2019s exports plunged a record 49.4 percent in February as deepening recessions in the U.S. and Europe sapped demand for the country%u2019s cars and electronics.

Shipments to the U.S., the country%u2019s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, the Finance Ministry said today in Tokyo. Automobile exports slid 70.9 percent.

The collapse signals gross domestic product may shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974. Prime Minister Taro Aso is compiling his third stimulus package as companies from Toyota Motor Corp. to Panasonic Corp. fire thousands of workers.

Sharpest Since 1980

Last month%u2019s drop in exports was the sharpest since at least 1980, when the government started to keep comparable data. Economists predicted a 47.6 percent decline.

Toyota, forecasting its first net loss in 59 years, yesterday said overseas shipments plunged 69 percent in February.

Demand fell across all regions. Exports to Europe dropped a record 54.7 percent, shipments to Asia declined 46.3 percent and goods sent to China slumped 39.7 percent.

Imports fell a record 43 percent, helping Japan post its first trade surplus in five months. The 82.4 billion yen ($842 million) surplus was still 91.2 percent lower than the same month a year earlier.

Sentiment among Japan%u2019s largest manufacturers probably fell to a 33-year low this month, economists predict the Bank of Japan%u2019s Tankan survey will show next week.

March 26, 2009

Another milestone 11,000 sellers 100 buyers

MANHATTAN REAL ESTATE DATA
_________________1-day 7-day 30-day
New Listings_____98 628 2,471
Price Cuts_______30 90 173
Contracts Signed_18 119 512
Total Inventory__11,040 10,953 10,530

let's see 98 new listings, 18 contracts signed
that's not a good trend but it has been the trend now for months

APRIL will be interesting

the first Manhattan RE auctions are coming

that will set in place a round of reality = hefty price cuts

The downturn in NYC real estate is relatively young. There is a long way down to go before it returns. Maybe early 2011 at the earliest.

another frightening point for investors - every stone is getting turned

http://www.ft.com/cms/s/0/680b46b0-18a7-11de-bec8-0000779fd2ac.html?nclick_check=1

This is a great time to pick up Manhattan (new development) properties at around $750/sq. ft. I say new developments, because unlike steady co-ops or condos, where people have plenty of equity in their property and can afford to sit on them longer, developers/sponsors are paying hefty interest payments on their unsold inventories ... so, they have to unload this inventory quickly, or they bleed cash monthly and have to rent out the units. But developers/sponsors are not in the business of apartment management, and excessive rentals could jeopordize deals that are yet to close. This puts these guys in a real pickle and so they are very "motivated" to sell. Imho, at $750/sq. ft., for a 2 bedroom condo in FiDi, Hell's Kitchen, etc. is a pretty solid deal that probably has some built in gain, in the deal. :)

Manhattan King - $750 sqft is not a deal especially in the nabes you mentioned. Plus the risk on new developments is high -- if they really wanted to sell them they'd price them agressively $400-500 sqft -they don't - they'll turn them into rental units first or they'll get actioned off at that price. you must be a developer or broker.

again wait for April's auction - that will set a new price structure for these condos

"The downturn in NYC real estate is relatively young. There is a long way down to go before it returns. Maybe early 2011 at the earliest."

initially i thought RE could bottom on 2011-2012, but it took much longer for Manhattan to reach its peak. there's never been a RE crash that lasted only 2 years and NYC just went through the mother of all RE bubbles.

one issue to look at is how attitudes towards home ownership change. negative equity is impairing 50% of labor mobility already, so those that need to build a career might not want to take the risk of getting stuck. or at least will demand very low prices in order to be compensated for that risk. this is a huge change on the demand side from "big as much as you can, as soon as possible as you cannot go wrong with real estate".

maybe a good indicator that RE reached bottom is when the talk shifts from "when are RE prices going to recover" towards "what is the next bubble going to be, in USA there's always a bubble somewhere!"

NYS is absolutely screwed. Pretty sure we'll need a bailout.

HTI, this is doomy & gloomy. Momma did say "There be days like this".

"Unemployment Rates* (seasonally adjusted)
February 2009 January 2009 February 2008
New York State 7.8 7.0 4.6
United States 8.1 7.6 4.8
New York City 8.1 6.9 4.4
NYS, excluding NYC 7.6 7.0 4.8

*Data are preliminary and subject to change."

http://www.labor.state.ny.us/pressreleases/2009/March26_2009.htm

I am waiting for a cheerleader to tell us how great this is for the real estate market.

JPMorgan Said to Delay Contributions to Employees’ 401(k) Plans

March 26 (Bloomberg) -- JPMorgan Chase & Co. will delay contributions to 401(k) retirement plans for salaried employees until the end of the year and may reduce the payments, according to a person who received a company memo on the changes.

Workers making $50,000 to $250,000 annually will cease getting the contributions every two weeks and may see the benefits adjusted to a yet-to-be-decided amount, according to the person, who declined to be identified because the New York-based bank hasn’t disclosed the new policy. The dollar-to-dollar match for those earning less than $50,000 won’t change, the person said.

JPMorgan, which is the biggest U.S. bank by deposits and has a global workforce of about 200,000, doesn’t contribute to retirement plans of employees with annual salaries of more than $250,000.

http://bloomberg.com/apps/news?pid=20601087&sid=a6KMcOpk5O1U&refer=home

Manhattan RE will continue to tank for at least another year, maybe several...

I love this quote from the FT article:

“It supposedly didn’t matter how long you waited. But the notion that the long run will bail you out no matter what stupid things you do in the short run I think is dead,” says Robert Arnott, who examines such performance in a forthcoming article for the Journal of Indexes. “And the notion that if you have the better asset class it doesn’t matter what you pay for it is on its deathbed.”

A perfect reply to the many people who have said that falling prices don't matter (even when they're obviously coming or continuing) as long as you hold long enough for the price to come back. As if, all else being equal, holding on to six-figures of your hard earned money doesn't mean anything. It always sounded insane to me.

March 24 (Bloomberg) -- The amount by which U.S. pensions are underfunded has almost doubled since October to $373 billion, increasing pressure on companies to give more to retirement plans as the global recession saps earnings.

U.S. retirement plans are able to meet 74 percent of their future obligations, down from 89 percent five months ago, after global stocks fell and contributions were delayed, according to Mercer’s Financial Strategy Group, a Marsh & McLennan Cos. unit. DuPont Co., Caterpillar Inc. and Lockheed Martin Corp. are among the companies that say they expect higher pension costs in 2009.

Last year’s drop in U.S. stock prices, the deepest in seven decades, will saddle the 53 percent of companies in the Standard & Poor’s 1500 Index with defined-benefit plans with about $70 billion in pension expenses this year, a sevenfold increase from 2008, as they seek to close the funding gap, Mercer analyst Adrian Hartshorn said yesterday in an interview.

“Everybody is facing the same problem: big companies, charities, non-profits,” said Judy Schub, managing director of the Bethesda, Maryland-based Committee on Investments of Employee Benefit Assets, whose members’ plans are responsible for more than 11 million workers and retirees. “The call on their cash is going to be significantly higher, two or three times higher, than they had planned.”

Legislation passed last year requires the companies to pay down the shortfalls in seven years, Mercer’s Hartshorn said. Watson Wyatt Worldwide Inc., an Arlington, Virginia-based consulting firm, has analyzed the 100 largest U.S. pension plan sponsors and said some companies are making contributions in advance, anticipating larger future commitments.

http://www.bloomberg.com/apps/news?pid=20601103&sid=avFTyPeb5HyU&refer=us

more pressure on the E of P/E

"NYS is absolutely screwed. Pretty sure we'll need a bailout."

I don't think the Dems / Obama will be in any mood to bail out Manhattan condo owners, esp those who paid over $729K for their apts. You see, these "rich" people are the "villians" who "caused this whole mess" - thus the Obama admin will be more than happy to INCREASE taxes on these "rich" folks. And, don't forget, Albany will also be increasing your taxes, NYC will probably increase its "mansion tax", etc. All of this means that those who bought high end apts in the 2005-2008 era are COMPLETELY AND UTTERLY SCREWED FOR THE FORESEEABLE FUTURE - so such people have 2 choices: either suck it up and continue to make your monthly payments for the next 10 years [if you are financially able to] or sell and see your equity wiped out.

Pandit, March 10th: “We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.”

Dimon, March 11th: "Jamie Dimon, the chief executive of JPMorgan Chase, said Wednesday that the bank was profitable in January and February..."

Lewis, March 12th: "We have been profitable for the first two months of the year,” Lewis told reporters after a speech in Boston today.

and now these on 3/27 Friday afternoon L O L

J.P. Morgan Chase Chief Executive James Dimon said...that March was a little tougher than the first two months of the year....

Bank of America...CEO Kenneth Lewis also said that March had been a tougher month for his bank.

the day I can't find a gloom & doom post at Bloomberg, we have reached the bottom of this so far bottomless pit.

Jobless Rate Exceeds 10% in Three More U.S. States

March 27 (Bloomberg) -- The number of U.S. states with a jobless rate exceeding 10 $ almost doubled in February as the worst employment slump in the postwar era spread.

Nevada,
North Carolina
Oregon
joined in February the four other states that had previously climbed above 10 $, according to Labor Department data released today in Washington.

Michigan at 12 % remained the state with the highest unemployment rate
South Carolina at 11 %
Oregon at 10.8%
California
Rhode Island bring the total number of states to seven.

Job losses have spread from areas battered by the housing recession and auto slump to states like the Carolinas where non- auto manufacturers and service companies are cutting staff. Economists at Merrill Lynch & Co. in New York and Wachovia Corp. in Charlotte, North Carolina, are among those projecting joblessness nationwide will surpass 10 percent.

“We so seldom see an economy down so broadly,” said Steve Cochrane, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. ‘The impact from the downturn in manufacturing is heading south from the Midwest. Job losses have broadened out across all industries because of the credit crunch, the lack of consumer confidence and the global slump.”

Forty-nine states and the District of Columbia registered increases in the unemployment rate last month, led by Oregon, North Carolina and New Jersey !!!, the Labor Department said.
Nebraska was the only state to post a decrease after the rate jumped the prior month.

WAGE DEFLATION SETS IN

The Times Plans Temporary Pay Cuts
McClatchy to cut 1,600 jobs, lower salaries
Gannett puts 15% pay cut on the table
Microsoft temps face 10 percent pay cut
The Oregonian Newspaper Takes Cost Cutting Measures
'Spokesman-Review' to Freeze Wages, Seek Salary Cut
Morris Communications to reduce worker wages
ADN announces staff, pay cuts
HP to cut staff wages by 5% as print revenue drops
Con-Way to cut employees' base wages by 5%
Sacramento Bee Staffers Approve Pay Cuts
IBM Cuts Jobs as It Seeks Stimulus Money

Koreans Take Pay Cuts to Stop Layoffs
Singapore Press Reduces Pay, Halts Hiring Amid Slump

http://globaleconomicanalysis.blogspot.com

HTI, we get the idea.

THX

Vacancies in prime office buildings soar 66%

Vacancy rates for Class A office space in the city have soared 66% over the last 12 months according to a new report from Jones Lang LaSalle, hitting 11.9% as the first quarter draws to a close.

The preliminary first-quarter results revealed that midtown fared even worse, with Class A office vacancies soaring to 13.5%—the highest rate recorded since Jones Lang LaSalle began tracking vacancies in 1995.

The broader picture was not quiet as bleak. Citywide, there was a 55% increase in vacancy rates across all types of office buildings, according to the report.

“We are likely to see vacancy rates rise across the entire city as companies continue to merge, downsize or file for bankruptcy,” said James Delmonte, vice president and director of research at Jones Lang LaSalle.

According to Mr. Delmonte, there have been just four signed leases for space larger than 100,000 square feet so far this year, compared with more than 17 during the first quarter of 2008. What’s more, three of this year's top 5 deals were renewals rather than new leases. The largest lease renewal was the one signed by Polo Ralph Lauren for 193,000 square feet at 25 W. 39th St. earlier this year.

As more office space comes onto the market, asking rents are beginning to plummet. Overall, asking rents in the city fell about 10% over the last 12 months, dropping to $64.43 per square foot in the first quarter. Class A rents fell 11% to $74.88 per square foot for the quarter. Meanwhile, Class B rents fell more than 12% to $49 per square foot.

Meanwhile, the gap between rents that landlords are asking for and those that tenants end up agreeing to pay, is ballooning. Deals have been getting done at a discount of as much as 30% once concessions like months of free rent are included, notes Mr. Delmonte.

“Rents are tied to employment projections,” he says. “Job cuts are expected through at least the first quarter of 2010 and we can expect asking rents to continue to fall.”

HT, I personally appreciate your posts. Obviously, the market will turn before the bad news flow does, but for anyone to deny the reality that NYC is just starting to slide downhill is ludicrous. I agree with the general sentiment that we have at least a year to go. Wait until all those who've been laid off lose their severance and unemployment insurance and realize they gotta bail out at any cost. Even if they get rehired it won't pay enough to hold on to what they have. Down 25% before I look to pull the trigger here.

There are huge issues ahead of us, one is clearly shown in this piece:

http://www.theatlantic.com/doc/200905/imf-advice

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government'a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Britain may have to go to the IMF for a huge financial bailout, the influential investor George Soros warns today.

The man who made $1 billion on Black Wednesday in 1992 told The Times that Britain was particularly vulnerable to the economic crisis.

Mr Soros – speaking days after an auction of government bonds failed for the first time in 14 years, ringing alarm bells about Britain’s ability to fund its growing debts – said that Gordon Brown might have to go begging for billions of pounds in international aid. He also warned that next week’s G20 summit in London was the last chance to avert a full-scale depression that could prove worse than that in the 1930s.

“You have a problem that the banking system is bigger than the economy . . . so for Britain to absorb it alone would really pile up the debt,” he said. Asked about the chances of Britain having to seek help from the International Monetary Fund, he said that if the banking system continued to collapse, it was “a possibility”. At this stage, he added, it was “not a likelihood”.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5989746.ece

I believe that the Bank of England will have to declare bankruptcy by Summer 2010

Island done
Baltic States done
Ireland pending
UK pending

3/30

It is back to the auto industry

GM creditors, shareholders, workers, dealers and suppliers will be expected to make more sacrifices. The bondholder committee includes San Mateo, California-based Franklin Resources Inc. and Fidelity Investments of Boston.

“After the cram-down happens and bondholders go from $27.5 billion to $9 billion or whatever the number ends up being, their fate is tied to the future success of GM,” Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee, said in a telephone interview. “They’re going to need some assurance that is going to be worth something someday. The way to do that is to reduce their cost structure as much as possible.”

DOW -240p

questions are back about the US banks - they will survive but at what cost ??

HT has the facts and they're not pretty. Yes the stock market is up but is this a bear market rally or a turn? Time will tell. HOwever even though the RE market in Manhattan was fueled by wall st bonuses, it is getting hammered by the loss of those bonuses and the underlying jobs. Ironically an upturn in the stock market will not save the RE market this time. Wall st as we knew it does not exist anymore. Those fat bonuses will be going to the bottom lines of the remaining banks and brokerages and not to developers and RE brokers. And don't expect the financial industry to go on a hiring binge either. The 1987 crash had the effect of a 5 year recession in housing in NYC. By any measure this downturn is far worse. Can we be looking at 5+ years of prices cuts in NYC RE? Certainly possible.
Content renter here with new lease in new building saving 28% over my current rent. Free parking and storage too. I expect in one year's time I will be able to negotiate this rent lower as well.

47% More Pain For NY Real Estate?

Interesting report out of Deutsche Bank over the weekend, presenting hypothetical upcoming current-to-trough declines in real estate prices, based on DB's proprietary Home Price Appreciation (HPA) model outlook for the top 100 Metropolitan Statistical Areas (MSAs). While the full report should be read in its entirety, a good summary is the chart below which demonstrates (in the right most column) the worst-case modelled downside to home prices in the 20 worst U.S. MSAs.

The top 5 MSAs where the pain will be most acute? (no real surprise there):

1. New York-White Plains-Wayne
2. West Palm Beach-Boca Raton-Boynton Beach
3. Miami-Miami Beach-Kendall
4. Fort Lauderdale-Pompano Beach-Deerfield Beach
5. Long Island Nassau-Suffolk

In summary: be very weary of snake oil salesmen telling you home prices have bottomed...

Commercial Real Estate - the next BIG problem

Boston’s John Hancock Tower May Be Sold for Half of 2006 Price

Boston’s John Hancock Tower, the tallest skyscraper in New England, may be sold to lenders led by Normandy Real Estate Partners for about half the $1.3 billion paid in 2006 by Broadway Partners, which defaulted on its loan.

The building will go on the auction block tomorrow in New York under state rules that govern mezzanine loan foreclosures. Mezzanine loans are intended to fill the gap between a first mortgage and the borrower’s cash down payment.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aoO51WlNpfZ4

New York’s Tax Increases Larger Than Announced for the Wealthy

April 1 (Bloomberg) -- New York’s higher tax rates, proposed in the state budget plan, would apply to wealthier residents’ TOTAL taxable income, not just the amount exceeding their tax bracket threshold, as state officials have said.

Thornburg Mortgage to file bankruptcy

NEW YORK (Reuters) - Thornburg Mortgage Inc (THMR.PK) said it plans to file for Chapter 11 bankruptcy protection and go out of business, making the provider of "jumbo" mortgage loans one of the largest casualties of the nation's housing slump and credit crisis.

http://uk.reuters.com/article/ousiv/idUKTRE5304NB20090401

Hope this is just an April 1st joke

City faces revenue shortfall of $438M

A City Council analysis released Wednesday says revenues will be $438 million less than projected in the mayor's January report, citing the deteriorating economy.

http://www.crainsnewyork.com/article/20090401/FREE/904019965/1097

Moody's cut MACY's unsecured debt rating from Baa3 to Ba2.

"The downgrade reflects the sharp deterioration in Macy's credit metrics to levels that are more appropriate for a mid Ba rating" stated Maggie Taylor, Vice President & Senior Credit Officer. "The downgrade also reflects Moody's expectation that Macy's operating performance will continue to be pressured given the current challenging consumer spending environment." Given this, Moody's expects Macy's credit metrics will deteriorate further over the next twelve months to levels that will be weak even for the new Ba2 rating."

Credit deterioration,
pension underfunding,
declining cash,
dividend cuts

Hey - let's buy some Manhattan RE L O L