“An Investment Opportunity With Sleepover Possibilities”
The New York Observer. “In 2005, Wall Street investment houses handed out a record $21.5 billion in year-end bonuses, according to the State Comptroller. This year may be even bigger. A very healthy bonus season means a very healthy Manhattan home-sales season in the spring, right?”
“Not really. While bonuses can pump up springtime prices, the effect on the volume of sales is more Wizard of Oz than Master of the Universe.”
“In the first six months of 2003 and 2004, despite widely varied bonuses the years before ($8.6 billion in 2002 versus $15.8 billion in 2003), the number of sales floated around 4,070, according to Miller Samuel. From the first half of 2005 through the first half of 2006, sales dropped by 270—despite 2005 being a record year for Wall Street bonuses, nearly $3 billion above the 2004 total.”
“‘If you take away our bonuses, our marketplace could be something like Miami or California, where they’re seeing a great deal of price depreciation,’ said Christopher Mathieson, the managing partner at luxury boutique JC DeNiro & Associates.”
From Vanity Fair. “This new architectural catwalk of ‘high-design,’ ‘high-concept,’ and ‘high-priced’ condo buildings doesn’t only fail to fit the vernacular of New York, it looks like a clearance sale from Europe and the Middle East.”
“‘Real estate is being marketed like fashion,’ an excitable young bedroom broker to the rich and famous told me in the back of his stretch limo. ‘Architects are the new couturiers.’”
“It’s a strange and lonely calling, that of the lifestyle salespeople for New New York. They wander the empty corridors like the friendly undead. All the undead Realtors are desperate for you to know the oddest things. They all begin with the ceiling height.”
“Salespeople haunt the empty apartment, spinning a life made of brushed steel and 12 shades of Indian marble. After a time, the repetition of this lifestyle blends all the apartments into one apartment. They all have minute, $100,000 kitchens that no one will ever toast more than a bagel in, which is just as well because there’s nowhere to sit and eat anyway.”
“There’s an overriding sense of impermanence. This is a fashion choice. No one will buy one of these gloomy spaces and say, ‘I want to have kids here. I want to grow old and die here.’ This is simply an investment opportunity with sleepover possibilities.”
“Whatever these New New York lifestyle brokers tell you about the sales and occupancy of these buildings, they’re lying. They want you to get aboard this vertical trailer park because they want you to have a cool, imported, classy, unique lifestyle.”
“All the salespeople believe the brochure. In truth, there is a swamp of unsold apartments. I’m told that many of the ones that are spoken for are speculative investments. They’ll stay empty for long weekends, through the summer and ski seasons. These blocks are constructed to be ghost towns echoing with the hum of unappreciated climate control.”
“Their gyms will have Fox News silently terrifying the unexercised machines. Their entrance halls, with their slinky, ergonomic space, will doze as the elevators wink.”
“This building boom isn’t a great expression of design and architectural excellence. It’s a massive speculation to relieve bankers of their bonuses, and bankers’ money is sterile. It buys peace and quiet and second-rate ideas.”
“New York is a city that was built out of risk and danger, with much more poverty and failure than riches and success. Fund managers kill the thing they crave. They want to buy their way into excitement and that old promise of the New York vista, but they drive it out and make it extinct.”
“The final, unpalatable, zero-tolerance truth is that hedge-fund managers, bankers, cynical architects, and insecurity-exploiting designers are far more damaging to the unstylized life of a city than all the junkies, prostitutes, panhandlers, urban cowboys, bag ladies, homeless, and graffiti kids they replace.”
I’ve always been amazed that our society rewards so well people who create/improve basically nothing (whether investment banker, hedge fund manager or Hollywood actor, etc.) at the same time that people who actually improve/support the society (whether teacher, fireman, police officer, etc.) get so little comparatively.
I know my job is ephemeral. Much of it, is just locating files on the computer for other people and data entry. I could have done it 20 years ago as a college student, for 1/3 of what I make now. But since my employer values “experience” I get to dig for old-emails and sheets of data and be paid like a systems analyst.
I don’t agree to much with the Democrat’s policies, but I agree that America is stratifying between the calss of “haves” (jobs, 401s, health insurance) and the “have nots”. I feel fortunate, to have ended up in the first camp.
If all the investment bankers and all the sanitation men went on strike, who do you think would be missed first?
“There’s an overriding sense of impermanence. This is a fashion choice. No one will buy one of these gloomy spaces and say, ‘I want to have kids here. I want to grow old and die here.’ This is simply an investment opportunity with sleepover possibilities.”
this is really depressing. all these people- so-call wall street masters of the universe- are reduced to a little more than money making robots. one feels this more acutely today, the day for families and friends. I wonder if they even know they are alive or what it means to live. surely it must be more than just making money and living in a hole. and i make a ton of money but i would never allow myself to live in such a place. happy thanksgiving to everyone.
I hate to burst you bubble but US healthcare is useless, and your 401ks aren’t as safe as you think. Sorry bud, you’re really not any better than the have nots you look down on.
at the same time that people who actually improve/support the society (whether teacher, fireman, police officer, etc.) get so little comparatively.
This statement is a crock ‘o shit.
These public employee union parasites are doin’ fine with their retirement at 45; lavish pensions; free health insurance; sick-day buy-backs; 6 week vacations; 180 day calender work years; rigged schedules so they can grab a second job, etc., etc…
It’s the small biz owner, farmer’s, fishermen, lumbermen, etc., who are takin’ it up the wazoo.
Shed no tears for the government worker.
I agree. government workers are NOT underpaid. Teachers get 3 months off a year. Firemen work half a week and retire at 50. The toughest job would be that of a policeman, having to deal with the scum of society.
This is exactly the type of thinking that has gotten us into this mess. More cops! Less teachers!
I am grateful for the policemen and the work they do, but to disparage teachers, view them as parasites etc. speaks to the larger point of how we really view education in the US.
If you ever had to teach, you would know what a huge commitment it is outside of the classroom. It is hardly an 8-4 job with 3 months off in the summer.
In their own way the hedge fund managers and investment bankers are useful. It would be very hard to afford a house in the US without a securitization markets. And the same for building a school without muni bonds. And who shall finance the manufacture of garbage trucks?
I venture that most people on this blog are unaware of how difficult it is to own a home in most of the rest of the world. And how much less economic activity occurs when financing is hard to get.
Sure we get to see the ill effects of credit bubbles (i.e Donald Trump) but for the most part the Financial markets greatly contribute to the wealth and low cost of living in the US. And that is something to be thankful for.
It is logically impossible to make anything “more affordable” by making it possible for people who can’t afford it to borrow limitless sums of money to “buy” it. And we are seeing first the results of this idiotic approach right now. The end results will be just that — the end of such insanity, at least for the remaining lifetime of the participants.
Jerry,
Teachers may get 3 monts off (but that is less common these days), but ***THEY DO NOT GET PAID FOR THESE DAYS OFF***. They also do not get any paid vacation (at least I didn’t, and that was with LA Unified). Yes, they have health insurance and pensions, but don’t you think we should strive to have a society where EVERYBODY gets that instead of hoping people live without medical care and die destitute in old age?
Why not try to build your position UP to that level instead of trying to tear down the last remnant of the middle class down? If the unions fail to maintain the middle class (due to the misguided and foolish actions of anti-union folks), EVERYBODY’S standard of living will drop through the floor. Don’t forget, the private industry has to offer better wages and compensation because they are competing with the union/govt employers. Although few people are smart enough to get it, privately employed people are also reaping the benefits of those who pay into the unions.
Tear down the unions and you decimate the middle class.
I must object also (biased, yes). If all of these investment bankers, fund managers, etc fled the scene, you’d be surprised what would happen. Please take an economics, political economics or finance course and you will realize that a liquid and secure capital market (yes, corrupt practices exist, etc and I blame the bankers on the mess we all blog about here but…) is one of the reasons that the industrial revolution, the information revolution, etc has happened and the reason why you and I drive cars, use microwaves and all don’t live on farms for subsistence. Yes, you’d notice the pile of rotting garbage faster, but 50 years down the road, you’d be fairly bad off without the proper allocation of capital.
Additionally, forgot to add, to my knowledge, the reason a doctor, a banker, etc is paid more in a rational market is it takes generally 6 years of college plus an extreme work ethic to be a successful banker, and I imagine several more years of school and residency to become a doctor. I’m not sure about the garbage man (who by me are actually paid fairly well and I know tons of policemen who are paid extremely well and teachers, not to mention their benefits are just ridiculous. Not to say their job is pleasant, but the garbage man to my knowledge does not require postponing and giving up 6 years of income and acquiring 100K in debt in order to obtain and fulfill their job.
Where I went to school, teachers had to have 6 years of college as well.
Are you suggesting the people who educate our younger generations are somehow less valuable than bankers????
So you think $45K a year in a big city metro area before taxes is a big bucks? I’d bet you guys are the same fools who think it’s OK that the CEO of Exxon got a 1/2 Billion dollar retirement package right?
3 months vacation? Yeah that’s vacation that many of them have to sub during so as to make more money to survive.
I swear…people in this country have some seriously f’d up priorities and views.
I’m on your side, hd74man. NYC muni finance meltdown of the 70s was a result of “middle class welfare” — i.e., too many entitlements for so-called public servants. Nowadays I think a lot of Calif’s problems can be traced to absence of private-enterprise tax base. Apart from govt employ, the only opportunities people could see lay in the RE bubble. These high-tax places do drive out those who would produce the goods and services not taken over by govt.
I just returned from a business trip to San Diego, and the local rag was full of stories about the city’s on-going attempt to figure a way out of the massive financial hole they dug themselves into by lavishing huge pension benefits on city employees. At some point in the not too distant future, the lucky taxpayers of San Diego will have to pay somehow for this … either through reduced services or increased taxes. All so that the public servants can enjoy a fat defined-benefit pension plan that taxpayers in the private sector could never hope to have. When will taxpayers finally revolt over the issue of fat public pensions?!?
When they are willing to pay competative market salaries for public workers. You can pay for labor continiously (market saleries) or on the back end (good pensions).
Alternatively, companies can promise to pay on the back end, and then renege via bankruptcy and/or cutting back the promised entitlements.
In fact, taxpayers are willing to pay competitive market salaries, or at least have the opportunity to vote on same. But for some reason the teacher unions launch massive campaigns agains any effort to use taxpayer funds to pay non-public schools.
On the one hand they argue for competitive wages, on the other they do everything possible to suppress competition.
Who retires at 45? Six weeks vacation? I’m a gov’t worker and while we do have a generous pension plan that will enable me to retire at 55, we pay into health care (over $300 per month per family) and only have around 2-3 weeks vacation. However, I will agree, I’m not sure how people in small business hack it. The truth is, all middle income people are in the same boat.
….My pension, for which 6% is involuntarily deducted from my pay, is hardly lavish…..health insurance is decent, tho co-pays grow every year, just like for other insureds. 6 weeks vacation? Maybe I should move there…. Mine is 2 weeks…but I do get 12 holidays….despite working most of them. Last year I worked 13 months….and yes, those extra hours were paid at 1-1/2 hourly. I’d love to “rig” my schedule……given, in a 911 center, we’re here 24/7. Retire at 55? Perhaps - in some positions. Mine? 65. Overpaid? Senior people, like me, earn near the median income before OT. My husband’s self-employed, and I’m grateful/amused/disgusted by turns at the tax breaks for businesses (insurance auditing) like his.
I’ve worked for both private and public organizations, and find fewer dissimilarities than one would imagine. Both have slugs and stars. Neither is perfect. Broad brushes applied to groups of people remind me of “investigative reporting” by the MSN: smeared and sloppy.
State Teachers’ Retirement System takes upwards of 5-600 bucks each month from teachers’ salaries. My mom just retired (former elementary teacher). She nets around 1500/month from the teachers’ version of social security.
To add to what We Rent had to say…govt workers (at least those I know of ) are NOT entitled to social security and accrue no SS benefits during their govt employment.
The govt workers PAY into their own retirement (there are some variations, and there could be improvements in this area, such that the contributions should be inflation-adjusted and consistent over time.). Do they fully cover their own retirement costs? Maybe, maybe not. It depends on how well the funds were invested and how long the employee lives in retirement.
As with MaryLee, I’ve also worked in public and private sectors. The public sector is much more difficult to get into (more tests, higher standards and requirements, etc.), and you tend to be under the magnifying glass, much more so than with similar private sector jobs (teaching, law enforcement, fire, etc.).
For those who think public employment is a ride on the gravy traing (and, gee wiz, so easy to do), I suggest you step up to the plate and join up! No sense in whining about the “unfairness”. Go for it, and tell us again, after a year, how easy it is.
traing=train.
Still miss that edit button, something fierce!
Think it depends when they were hired.
I was amazed to read this description of stupid building for places nobody wants to be. I guess the few that bought these high ceiling tombs will be the bagholders, as well as the idiot financiers of them. Salespeople need to find a new line of sleaze to pimp.
The biggest problem IMO is that these are typically urban projects. When that type of thing goes sideways, it can turn negative for the area. Look at the stalled Miami condo conversions that are full of drug-addicts and vagrants, as recently reported by the Miami Herald. And the owners evicted paying renters to get there.
Ben, you really need to see that building to understand how stupid this really is. That god awful monstrosity is in the East Village. It is on Lafayette St., I believe. It is too far east of Washington Square Park to get any direct benefit from the park. This eyesoar is right where the Astor Place subway stop for the 6 train gets out. It is also where the East Village K-Mart is located. Being near a subway stop is nice but here again it is a double-edged sword. It means everybody has easy access to your neighborhood. The subway system is like the large intestine. It serves a very useful purpose but it moves a lot of $hit. That building is in the dead center of Lafayette where a lot of trashy humans get out.
This neighborhood is dominated more than ever by NYU. That means it has a lot of college students, small restaurants and bars. The old CBGB is a few blocks away. I can’t figure out why anybody that can afford a multi-million dollar lifestyle would want to live there. You would never see a Wall Street CEO/Hedge Fund type in that neighborhood. I can see the uber-rich wanting to live on 5th Avenue just north of Washington Square Park. That neighborhood makes you feel rich just walking through it.
All over the City are buildings being put in places that make no sense. I had posted in the bit bucket about the stupidity taking place at 59 John Street. It is nearly as dumb as this soulless glass misery plopped down in the East Village like a glass turd in a punch bowl. The Richard Meier mess at 165 Charles Street is another development completely out of character with the West Village. I just wonder what people will think in 20 years. Wait. I know what they will think.
Check out other architectural abortions at:
165charlesstreet.com
fiveninejohn.com
In cyber space they look great. In reality they suck.
“The subway system is like the large intestine. It serves a very useful purpose but it moves a lot of $hit.”
LMFAO!
Ben, you really need to see that building to understand how stupid this really is. That god awful monstrosity is in the East Village. It is on Lafayette St., I believe. It is too far east of Washington Square Park to get any direct benefit from the park. This eyesoar is right where the Astor Place subway stop for the 6 train gets out. It is also where the East Village K-Mart is located. Being near a subway stop is nice but here again it is a double-edged sword. It means everybody has easy access to your neighborhood. The subway system is like the large intestine. It serves a very useful purpose but it moves a lot of $hit. That building is in the dead center of Lafayette where a lot of trashy humans get out.
This neighborhood is dominated more than ever by NYU. That means it has a lot of college students, small restaurants and bars. The old CBGB is a few blocks away. I can’t figure out why anybody that can afford a multi-million dollar lifestyle would want to live there. You would never see a Wall Street CEO/Hedge Fund type in that neighborhood. I can see the uber-rich wanting to live on 5th Avenue just north of Washington Square Park. That neighborhood makes you feel rich just walking through it.
All over the City are buildings being put in places that make no sense. I had posted in the bit bucket about the stupidity taking place at 59 John Street. It is nearly as dumb as this soulless glass misery plopped down in the East Village like a glass turd in a punch bowl. The Richard Meier mess at 165 Charles Street is another development completely out of character with the West Village. I just wonder what people will think in 20 years. Wait. I know what they will think.
Check out other architectural abominations at:
165charlesstreet.com
fiveninejohn.com
In cyber space they look great. In reality they have no soul.
Ben, you really need to see that building to understand how stupid this really is. That god awful monstrosity is in the East Village. It is on Lafayette St., I believe. It is too far east of Washington Square Park to get any direct benefit from the park. This eyesoar is right where the Astor Place subway stop for the 6 train gets out. It is also where the East Village K-Mart is located. Being near a subway stop is nice but here again it is a double-edged sword. It means everybody has easy access to your neighborhood. The subway system is like the large intestine. It serves a very useful purpose but it moves a lot of $hit. That building is in the dead center of Lafayette where a lot of trashy humans get out.
This neighborhood is dominated more than ever by NYU. That means it has a lot of college students, small restaurants and bars. The old CBGB is a few blocks away. I can’t figure out why anybody that can afford a multi-million dollar lifestyle would want to live there. You would never see a Wall Street CEO/Hedge Fund type in that neighborhood. I can see the uber-rich wanting to live on 5th Avenue just north of Washington Square Park. That neighborhood makes you feel rich just walking through it.
All over the City are buildings being put in places that make no sense. I had posted in the bit bucket about the stupidity taking place at 59 John Street. It is nearly as dumb as this soulless glass misery plopped down in the East Village like a glass turd in a punch bowl. The Richard Meier mess at 165 Charles Street is another development completely out of character with the West Village. I just wonder what people will think in 20 years. Wait. I know what they will think.
Check out other architectural abortions at:
165charlesstreet.com
fiveninejohn.com
In cyber space they look great. In reality they stink.
NYCityBoy, I hear ya totally. I’m on the UES and they are doing the same thing up here. For example, my wife used to live on York and 83rd. Well, they knocked down the walk-ups on the corner and put up a gross new semi-highrise with lots of glass and pukey yellow ’stone’ and ‘amenities.’ And they offered studios for over $700m. Studios! The building is totally out of sync with the block. And who wants to pay $700 giesels for an effing STUDIO??? Needless to say, you can walk by at night and see very few lights on. But do they learn? Nah. They’re knocking buildings down left and right on the UES to put up more overpriced garbage. Kinda funny, too. I was standing outside, took a day off, watching the construction workers dig the basement for some soon-to-be architectural monstrosity. And this guy comes by and watches for a few seconds before announcing: “Do you have any idea what the average income in 10021 is? Do you?” Of course I didn’t. But he did. Said it’s about $75,000. How many folks making $75,000 can seriously afford to buy a $700,000 studio? Even if you drop the price to $500,000, who can afford that making $75,000? They can’t, no way. And these are STUDIOS!!!!!!!!!!!! Give me a break. Just wait until 86th Street is revamped and those highrises are done and 1,000 new housing units hit the market 18 months from now.
The only thing holding all this together is the Street. And everyone knows the Street and employment therein moves in waves. And the bankers are licking their chops now but when the next downturn happens and 80,000 bankers and traders and salespeople are laid off you better believe that economic contraction is going to trickle through NYC fast.
10021 has a median of $75,000? I would have guessed it to be a lot more. I live here and I’m surprised by that. We make a heck of a lot more than that and there is no way in hell I could think of owning at this time. Amazing.
I still predict a 40 - 50 percent fall in Manhattan real estate by 2010. The average price is $1,028 per square foot. Pure bull$hit.
And “home office” is new yorker for “windowless bedroom”
Ben as usual you hit it right on (as did the observer - what a sad but beautifully apt description of the nyc market). Urban markets, far from being invulnerable, are particularly sensitive to the side-effects of economic downturns. And NYC will be ground zero again for this, I fear. We have overbuilt our condos, we have one of the worst housing-affordability problems in the nation, and this is pushing out the hardworking middle-class, the new immigrants, and the creative types that are the true fuel that keeps the city going- not the hedge fund brats. I am reminded of this more often, as I see some crime in the city actually on the rise. And I am remined that when it’s time for me to buy again, I’m going to be damn careful where I choose to make my home.
PS Make that Vanity Fair and the Observer with the apt descriptions.
“California, where they’re seeing a great deal of price depreciation…”
Um, WTF? Here in San Jose we’ve barely seen any actual price depreciation. Most “Price Reduced” houses are coming down from “Ridiculous-Wishful” prices to “Might sell in a year” prices. And it’s still 60% cheaper to rent than to buy a comparable place. Even with 20% down, it’s still hundreds of dollars cheaper to rent.
Note to rest of the country: “California” is not one big market…and honestly, even in the most ridiculously overbuilt areas I haven’t seen prices drop that much. I’m still waiting to buy. My greatest fear is that prices do drop by some small amount (say, 10%) and the continued proliferation of I/O and ARMs means people start buying houses again. That means people like me, who only plan to buy with 20% or more down, will be screwed in a big way. Blah. Sometimes I hate the Bay Area.
I work in the Bay Area but live in Orange County. I’ve had the opportunity to investigate how prices are acting in both South OC and in the San Jose and Santa Clara area and they are acting pretty much the same. No major price drops like you say other than reduced from wish prices. I hate this bubble.
“No major price drops like you say other than reduced from wish prices”
You ain’t looking hard enough. Desperate sellers with I/O resets are slashing prices. Better spend a little research money at foreclosure.com, then go to zillow and the to zip realty. The deals are there, and are being gobbled up. There might be somemore downward pressure, but 20% off is available in these markets today, from very motivated sellers.
Must do your homework, and maybe a negotiation class would help. Gobble! Gobble!
David,
Agreed… however, in a few years, I believe (as many here do) that we will not have to “look hard” to find good deals. Of course, they won’t be easy to get for normal folks because normal folks have bad credit and follow trends. See stock market for details.
Anywho, it sucks to be sitting it out right now especially if you’ve already been sitting it out for the past 1 or 2 years.
The properties that are 20% off are there… they are just few and far between right now. It’s only a matter of time before those are the new comps for an area. Once that downward trend is in place, then the drops will happen. Right now, the top end on south OC is pancaking down… 1.5M last year is now 1.25M and so forth. Still too far out of reach for typical earners, or anyone who is not a CEO.
The question is not if, but when all come down. Let someone else catch the falling knife.
“Pancaking down” - a good metaphor. I have watched pricing structure in various Calif towns change. Cheapest stuff not dropping, but the $600,000 stuff is become $550K and the $1,000,000 stuff is becoming $800K stuff.
“Good deal” implies better than average pricing. If you don’t have to look hard for them, they’re not “good deals,” just selling at market price.
Who’s still dumb enough to even pay for 20% off? I wonder…
We’re finally getting some price reduction in the Sac area. While the median doesn’t really explain what is happening, I’m seeing 4/2 SFRs listing at 2/2 prices from the peak. I had finally told my husband we could leave, now I’m tempted to stay a bit longer and see what happens.
“And it’s still 60% cheaper to rent than to buy a comparable place. Even with 20% down, it’s still hundreds of dollars cheaper to rent.”
So SlashChick, with renting a much more reasonable proposition, what is the risk in waiting?
That’s because people in San Jose are still dumb enough to pay for the prices there. That’s one area where the “American” way of life and consumption into latte heaven and BMW driving is at the forefront of everyone.
It’s cool to pay $1MM for a 750sqft POS in San Jose…don’t you know that?
It’s amazing….people take a crap in their own living rooms and then turn around and ask why it smells so much.
I’d seen the Vanity Fair article before (I thought I got linked to it from this site, but I guess I was wrong). It’s a pretty funny satire on some of the pretentious marketing tools for the new towers. Overall, though it just strikes me as a very pretentious version of “I don’t like these new-fangled condos.” I mean, I’ve never seen anyone as upset as this author about the dearth of an apartment’s hat-hanging capacity!
I thought the Vanity Fair piece was pretty insightful, especially the following “…. The salesperson walks in with a humorless professional smile. She’s not what I expect. Not one of those chain-saw-voiced, neurotically enthusiastic divorcées who have real estate instead of love. This one is the Realtor from a Raymond Chandler novella. She gives me one long, slow-burn look, like a social actuary. In a beat, she seems to sum up my net worth, potential income, status, and I feel myself fall short. No—collapse short. Then she does what we in the Old World call “French flirting,” which is like regular, full-beam flirting, but done to show you what you’re not going to get. Flirting with malice. She shows me her teeth, licks her lips, picks up the clipboard, flashes a wink of cleavage, and we go to see the building….”
One of the more perplexing phenomena of the building craze in San Diego has been to see the rise of skyscraper condos (must as described in the Vanity Fair article) on Market St. next to the convention center. At least in New York, this makes some sort of sense, given the 24 hr lifestyle and culture. In San Diego, with neither, they make no sense at all.
I haven’t been to San Diego since 1998, but I remember that I thought it was odd because it lacked a proper downtown area. I assumed that many of the new condo towers were hoped to build a populated urban core in San Diego. It’s a good idea if done well, but to pull that off it takes a lot of coordination between developers and city planning. I don’t know enough about San Diego to wager a guess on whether the city government has what it takes to make this succeed.
I love living in high-rise apartments. The views alone make it worth it for me.
There will always be a percentage of people that do like high-rise living. But the question became, was the coincidental surge in condo projects everywhere from Maimi to Montana an aspect of the housing mania, or a fundamental shift?
And that shift just happened to have a handy line of reasoning to fit each city and price range. In New York, it’s the high rollers with their bonus’ that justify these $multi=million designer pads. In Florida, the rich foriegners will pay the big bucks for water-front condos. In San Diego, it’s the hip, young urban professionals wanting to live near work that will take up the slack. And if it’s anywhere metro, look for the down-sizer line, where retiring boomers are tired of yard work.
Well, it’s difficult to coordinate to coordinate municipal planning and developers when you have a city, like San Diego, which is just a hop-skip-n’-a-jump away from bankruptcy.
In its haste to ram through bonds for San Diego’s Petco Park, then Mayor Murphy papered over the entire multi-billion pension fund scandal:
http://www.sdreader.com/php/cityshow.php?id=1505
Now, San Diego is no longer in a position to float municipal bonds for the simplest things, having been locked out by the SEC and Wall Street. One of the more bizarre phenomena is to see these huge downtown condo-skyscrapers, serviced by pothole-filled roads that can’t be fixed.
For those interested, in the archives of the San Diego Reader are filled with Don Bauder’s analyses of our erstwhile city leaders, aka ‘Enron-by-the-Bay’ crooks.
ot………but a good read. Everything that has been spoken about right here.
http://www.dailyreckoning.co.uk/article/231120062.html
Good piece. I wonder if anyone has done research into how people’s time-weighted perception of risk (If an event happens 1 year in 100, people are excessivly worried about it if it has happend recently, and not worried enough about it if it happened more than 50 years ago) effects economic markets. Even those who are professional risk estimators do this. Look at how insurance rates in Florida rose after the hurricanes of ‘05.
I work for one of the largest wood product manufacturers in the world. Our motto used to be “From Stump to Rump” until we got out of the newsprint and Toilet paper business.
Anycase we just got our quarterly target updates and our containerboard market has just about fallen off the cliff. There is a boatload of excess product looking for a buyer *AT ANY PRICE* . This is after shutting down several mills and plants.
Lumber prices have fallen from $380/mbf in Q305 to $300 Q306. If 25% reduction in pricing is not a collapse i do not know what is. This is a double whammy since the energy costs have not declined by the same % so it is eating into the margins.
The ripple is starting in ALL manufacturing sectors and will be evident in the next couple of quarters.
Thanks for the update. Is it true that British Columbia is planning a massive harvest of beetle-killed trees? Any insight about what this means is appreciated.
Yes, Weyerheuser etc are going to do some serious harvesting to avoid losing a sizeable chunk of lumber to the pine beetles. For the short term this will further gut the market ( inventories will rise , us market will get even softer , since the US-Canadian lumber dispute has conveniently been resolved after the demand from the housing bubble has slowed down)
For the long term it might make the northern lumber / paper mill towns even harder to recover ( if not impossible ) since the reason to keep these mills will be gone. This is because the growth time in the northern provinces is measured in decades. Our south american forest lands can give us a tree every 7 years , ready for harvest esp for paper and pulp.( and for the eco-nazis this is regular FARMING of trees i.e. cut , sow and come back in 7 years over a fixed area of land ).
Some of the south american mills have so much excess pulp material on site that they can run 3-4 YEARS without cutting another tree. This makes it harder to harvest forests that go beyond 7 years since the trees are beyond optimal size etc. Think regular farming.
I do not see the lumber / paper industry surviving without serious mergers and consolidations in the next few years.
But Vancouver, BC RE prices are recession-proof because “It’s Different Here!”.
I am always reminded by what Charley Munger said were the two sectors he and Warren Buffet never liked (Paper and Airlines). Too much fixed cost supported by too few variable profits. Hyper competative to boot.
That said, SWM has been very very very good (If you bought after they got killed in 2Q06). SWM is KMB’s old cigarette paper division spun out in 1995. Long term the future is quite bright for SWM as they are a key maker of self-extinguishing cigarette paper. In a few years all US states will require self extinguishing cigs.
“vertical trailer park”
A classic description! They don’t put that in the brochures, do they?
That was very good, wasn’t it?
Take the Richard Meier buildings, the spare glass blocks in the West Village where 682-square-foot studios go for more than $1 million. Looking out over the Hudson, they squat like Papa Bear, Mama Bear, and Baby Bear, waiting for some entitled Goldilocks to come home. They’re striking because they’re so unlikely. Like finding three zebras in your garden. But in a suburb of Berlin they would be as unexceptional and uninspiring as leather shorts and an oompah band. Inside, they’re a precious design oxymoron, a mixture of Minimalism and old 70s industrial functionalism. There are obtrusive pillars, and there’s hardly anywhere to hang a picture, let alone your hat.
Now that’s a bit snarky. I love Richard Meier’s work. His buildings are beautiful and there are plenty of them in Malibu and L.A. as well (the Getty Museum). The coolest house in Dallas was designed by Richard Meier. The guy who commissioned it doesn’t live there any more though. I believe it’s empty and is used as a venue for charity functions.
http://www.dougnewby.com/Architecture/Architects/Practicing_Architects/practicing_richard_meier.asp
Txchick, I do not know Richard Meier. But somebody should be beaten for those buildings at the end of Charles Street. The people with the mindset that built those buildings are going to kill the West Village. They are completely out of place.
I always wondered if that was a house or a professional building. It’s cool looking, but a bit out of place for the neighborhood.
To say it is a bit out of place is like saying Britney Spears would be a bit out of place at a Mensa meeting. These buildings are awful. Not only are they out of place but they have now officially blocked all view and light of the buildings that are east of them on Charles Street. Because they are right on the West Side Highway nobody can ever block their view. That seems unfair to me.
The funny thing is that there is also a fourth building going up. Directly east to 165 Charles Street is another, much smaller building. It is the exact same sterile all glass design. Oh, I want to cry when I see these buildings. The little one looks like a piece of excrement that 165 Charles Street could not hold in.
I do not know Richard Meier. But somebody should be tarred and feathered for dreaming up the idea of putting these three buildings in the spot where they now stand. Just awful.
Howard Rachowsky. Hedge fund guy. Of course. Also art patron. The place looks like the inside of an art museum. I offered to live there and take care of the place
I went to one charity function there. The place is simply awesome.
The Getty Museum is a big pile of white crap on top of a hill. No organization, unfocused, and once again Meier designed a museum where there is too much distracting emphasis on the architecture, not the art.
Recently there was a NY Times review of a museum Meier designed for Rome. It was about the most scathing architectural review I have ever read. Meier is better with the small scale homes, but I think his bit is getting old, plus, the guy is color blind.
An Oracle of Modernism in Ancient Rome
ROME — The opening of the Ara Pacis Museum should have been cause for celebration. The first major civic building completed in the historic center of Rome in more than a half-century, it trumpets this city’s willingness to embrace contemporary architecture after decades of smugly turning its back on the present.
That the building is a flop is therefore a major disappointment. Designed by Richard Meier for a site at the edge of a Fascist-era piazza overlooking the Tiber River, the museum boasts a muscular main hall built to house the Ara Pacis, an altar erected as a symbol of Roman peace — that is, military conquest — from around 9 B.C. The building’s glistening glass and travertine shell has all of Mr. Meier’s usual flourishes, from the expansive use of glass to obsessive grids.
But in its relationship to the glories of the city around it, the building is as clueless as its Fascist predecessors. The piazza, designed in the 1930’s, was a blunt propaganda tool intended to invest the Fascist state with the grandeur of imperial Rome; Mr. Meier’s building is a contemporary expression of what can happen when an architect fetishizes his own style out of a sense of self-aggrandizement. Absurdly overscale, it seems indifferent to the naked beauty of the dense and richly textured city around it.
That kind of insensitivity tends to reinforce the cliché that all contemporary architecture is an expression of an architect’s self-importance. The building is bound to give ammunition to architectural conservatives who clamor that there is no room for bold new architecture in the eternal city.
But if you’re going to fiddle with ancient Rome, there are few better places to start than this site, the Piazza Augusto Imperatore. Designed by Vittorio Ballio Morpurgo, it is a prime example of how the Fascists used architecture to reshape and distort history.
The Ara Pacis was excavated from its original site and carted in pieces a short distance to its present location in the 1930’s. Mussolini reinstalled the altar in a new glass-and-stone building by Morpurgo next to the ancient tomb of the Emperor Augustus (63 B.C. to A.D. 14), implying the dictator’s supposed bond with ancient emperor-conquerors. The symbolic link between a modern Fascist state and a heroic classical past was fortified by the flanking buildings, with their abstracted facades and shadowy arcades.
Like other Fascist-era planners working in the city’s historic heart, Morpurgo callously razed the decrepit old neighborhoods that once surrounded the ancient mausoleum, as if to liberate the city’s repressed imperial history. But he ignored the essence of the city’s beauty, the wondrous way you suddenly press up against the facade of an unfamiliar church, for example, or enter an airy piazza that appears out of nowhere.
Although Mr. Meier speaks eloquently about the architectural past, his buildings can be stubbornly oblivious to physical and cultural context. In Barcelona, Spain, the enormous glass facade of his Museum of Contemporary Art inexplicably exposes the interior to the blazing sun. His Getty Center turns its back on the car culture of Los Angeles in favor of the themed fantasy of an Italian hill town.
The Ara Pacis Museum rises between a roadway that runs along the Tiber and the enormous weed-encrusted drum of the ancient mausoleum of Augustus several yards below. Anchored by the main entrance at one end and an auditorium at the other, the museum’s main hall is sheathed in glass on both sides so that motorists can catch glimpses of the Ara Pacis and the mausoleum just beyond it as they speed along the river. A pleasant marble stairway near the main entrance leads up from the piazza to the river embankment.
The building’s best features reside in the interior, along the carefully calibrated approach to the tomblike altar. Just inside the entry, for example, a long, low window extends along the base of the wall to remind you briefly of the world outside. From here a few shallow steps lead up to the altar, which is bathed in natural light.
Mr. Meier has also responded deftly to the Roman altar, supplying a structure that stands up to the sculpture’s weight and stark power. The main hall is supported by four heavy white columns that rise to meet a grid of deep beams. The contrast between the rough finish of Mr. Meier’s travertine and the ornate stonework works just fine.
There are other nice details. At the back of the hall a stair drops down behind a towering travertine wall to the theater lobby, which acts as a hinge separating the room housing the celebrated altar from the bustle. Above the theater an outdoor terrace juts out slightly to afford a view up toward the Piazza del Popolo.
Yet in Rome context is inescapable, and Mr. Meier’s building seems intent on shunning the city’s seductive charms. Like most new museums, the Ara Pacis is stuffed with unnecessary add-ons: an overly formal lobby, a bookstore and a 150-seat theater that seems a wrongheaded fillip in a museum with a single work of art.
The museum’s bloated size was not entirely Mr. Meier’s fault; the government client had something to do with it. But he compounds the problem by playing to the piazza’s monumentality rather than countering it with the quietness that its pomposity demands.
There is nothing lighthearted or gentle here. The formal symmetry of the two white blocks framing his building at either end, for example, gives the structure a self-important solemnity. The thick slab of a roof only adds to the composition’s oppressive weight.
Still worse is Mr. Meier’s treatment of two churches, San Rocco and San Girolamo dei Croati, at one end of the piazza. To root his building in the city’s ancient fabric, he created a long travertine wall that extends from the museum’s main entrance to the roadway beside the river. Viewed from the road, the wall chops the churches off at half height, so that you don’t feel the full effect of their coming into view as unexpected treasures. And Mr. Meier’s project overwhelms the piazza below, pressing in on it disrespectfully so that the church facades almost seem to recoil in embarrassment.
In the end his building may be as telling about the sins of our era as Morpurgo’s design was of his. While Mussolini’s architects can be faulted for trying to reshape the city’s history for their own propaganda aims — and to satisfy the egomaniacal drive of a despot — the museum reminds us that vanity is not unique to generals or politicians.
It may be another half-century before Romans go down this road again.
Now this is a lovely museum building. You must see it sometime.
http://www.miho.or.jp/english/index.htm
I know that building, IM Pei. Maybe his best. Beautiful, perfectly scaled, crisp appropriate detailing, perfectly sited and related to the landscape. Meier’s buildings never ever relate to their surroundings. They exist as pure abstract objects. Pei has no ego. Meier’s ego is almost as big as Donald Trump’s.
Hmm! Beautiful Meier buildings!!
Well, maybe if you want to live in a monument (i.e., Parthenon or Pantheon), but most of us have lives to live.
And by the way, I’d be the first to subscribe to more bathrooms and less beauty, as in the much-criticized Getty museum:
http://strweb1-12.websys.aol.com/time/magazine/article/0,9171,988374,00.html
No less than Isaac Asimov subscribed to the “Freedom of the Bathroom” as the most important freedom of all — that is, the freedom to use the bathroom as long as you wanted, anytime you wanted.
Meier obviously forgot this dictum when designing the Getty - guess bathrooms were too mundane to bother with.
they have had major problems at the Charles street condos. Living in a leaky glass fishbowl you paid $1250/sf for sucks big time. Did I mention someone was shooting at the windows?
http://www.nyc-architecture.com/CHE/CHE030-PerryWest.htm
Rich and famous fall out of love with the ‘Faulty Towers’ of New York
By Charles Laurence in New York
(Filed: 09/05/2004)
Draped in glass with a soft aquamarine tint, and commanding uninterrupted views of the Empire State Building and the Statue of Liberty, the twin towers on Manhattan’s waterside Perry Street should rank among the most desirable homes on earth.
The towers were designed by the leading architect Richard Meier, and a who’s who of the rich and famous - including Calvin Klein, the actors Nicole Kidman and Hugh Jackman, and the disgraced home guru Martha Stewart - rushed to buy flats at $1,000 per square foot.
Martha Stewart paid $6 million for two floors of the north tower
Klein, the designer, paid $20 million (£11.2 million) to buy and decorate a three-floor penthouse in the south tower, making him the biggest investor in the project. Before signing the cheque, he even went up in a helicopter to check out his views.
For four years the apartments have been the talk of the town, ever since New Yorkers driving past the towers on the banks of the Hudson first saw their revolutionary glass “curtain” walls, and wondered what it might be like to live with the glitterati in such a place.
Yesterday, they got an answer when the new issue of Vanity Fair landed on the news stands with a shocking headline: Faulty Towers.
There is, it turns out, a giddy price to pay for architectural fabulousness and social prestige. The monthly service charge for doormen and cleaning has recently doubled from $2,000 to $4,000 (£2,200) - a significant increase even for multi-millionaires.
Worse still, the very fabric of the glass-clad apartments appears to be failing. According to the increasingly irritable apartment owners, the ceilings leak, the heating fails and the balcony floors buckle. Perhaps inevitably, lawyers are said to be circling, ready to deal with residents’ grievances. As if Ms Stewart, who paid $6 million (£3.3 million) for the top two floors of the north tower, did not have enough to cope with after her recent conviction for obstructing justice, she has also suffered flood damage.
In a recent rainstorm, the magazine claims, her balcony overflowed, sending water cascading down the tower. Six levels below, Joe Castaldo, owner of the Style Council textile company, discovered that his expensive rosewood floor was so badly damaged in the downpour that it had to be ripped up and replaced. Some apartments are already on to their third new floor, the magazine claims.
“You won’t believe what’s going on in these buildings. It’s a microcosm of everything ugly in human beings - beautiful, beautiful architecture desecrated by scandal, greed and gluttony,” Vincent Gallo, the film-maker and actor, told Vanity Fair.
The towers were developed by the team that made a fortune in the 1990s with a series of Manhattan “boutique” hotels.
“It felt like Star Trek: you know, going where no man has gone before,” said Richard Born, one of the developers.
Yet the excited owners were later taken aback to discover that the building’s plumbing was set in concrete. They could not so much as move a sink or a bidet without drilling a hole in their downstairs neighbour’s ceiling.
When Michael Jackson, the British-born head of Universal Television and former chief executive of Channel Four, wanted to do just that, Mr Gallo - whose own apartment was newly decorated - firmly said “No”. Many other residents have taken the same line.
Paul Sinclaire, a friend of Calvin Klein, was the first to move in and had to walk a plank over an open drain to reach his door. When winter came, he discovered that the builders had forgotten to fit wall insulation. It was so cold that he “could not get out of bed”.
According to Vanity Fair, he was offered a discount to move temporarily into a hotel. While he was there, he says, someone stole his watch and television set. He also discovered that the building’s doorman had been charging curious tourists to tour his home.
Mr Castaldo recalled how he stood by his glorious glass wall one morning, admiring the rain streaming down it like a waterfall - and then reaching out a hand to discover that the water was flowing inside. “I fail to see how this is not going to go before Attorney General Eliot Spitzer,” he said, referring to the legal official responsible for property laws and disputes.
The problems continued. A gunman who has never been caught began taking potshots at the towers. Though the glass panels cracked, bullets did not penetrate them.
It was enough to make even the most modest of homeowners complain, and the residents of the Perry Street towers are hardly that.
Many had already made exceptional demands of the developers. Kidman, for example, begged them to install a secret passage between her apartment and the parking garage next door so that she need never appear in public. The request was turned down.
Ms Stewart demanded that a special area be designated where her limousine drivers could wait for her. She, too, was refused and is now trying to sell her penthouse for $7.2 million. As for Klein, he has allegedly been pushing for doormen to be armed, for staff to wear designer uniforms, and for the gym to be moved to create more space for residents’ mailboxes. Mr Gallo told the magazine: “I do object if Calvin suddenly wants an armed doorman, and I’m supposed to pay for it.” Other concerns sound more petty. There have been complaints, for example, that Rita Schrager - the former wife of the hotelier Ian Schrager - has defied house rules that preserve the uniform appearance of the glass walls by hanging up white curtains.
More and more original residents are moving out. According to estate agents, they may sell in disgust but they should make a profit. The design of the buildings still mesmerises New Yorkers, and the value of the apartments is assured.
“The waterfront is becoming the new Fifth Avenue,” confirmed Ron Teitelbaum, an estate agent. Some comfort, at least, for the disgruntled Perry Street residents.
LOL. Wonder if one of those wealthy homeowners can get a waldorf salad in the place.
Where’s Robin Leech’s “Lifestyles of the Rich & Famous” when you really need him?
In Robin Leech’s voice:
“Over $1000 dollars a square foot and you can’t even move the toilet.”
In case you’re wondering how society values the “rich & famous” as opposed to the rest of us, the following quote from the article is instructive:
“….The problems continued. A gunman who has never been caught began taking potshots at the towers. Though the glass panels cracked, bullets did not penetrate them….”
When I worked in the Biophysics Department, Johns Hopkins University School of Medicine in the ’70’s (i.e., downtown Baltimore MD), our windows did not stop the bullets that gangbangers shot at us.
The glass nonsense going up is ridiculous.
The view from Brooklyn, however, is that there is lots more money going into the external appearance of buildings than their had been for 50 years. For much of the time, we’ve had the infamous “Fedders” buildings in the outer boroughs, the dirt cheap Trump Senior design with metal lintels, a Fedders air conditioner in view below each window, and a row of garage doors across the bottom.
As for the empty apartments, at the right price they’ll sell or rent to the rest of us. Why should the Southwest be the only place to get cheap housing at the expense of stupid investors? I wish we were getting over-priced but soon to be underpriced office buildings too, a la Texas.
Wait till the Frank Gehry abortion is slammed into Williamsburg. Now that will be a freaking ugly bunch of buildings.
Now that I’d agree with.
You’ve heard it all before from me, but I must pipe up again: Wait a good 5-7 years, and all these humpty dumpty new construction projects - from the glamorous to the brick boxes, are going to have some serious problems that need fixing-from brick to drywall to plumbing. These buildings were not built to last, they were built to maximize profits. And they are being especially slap-dashed up now that the bust looms. Even if the market bounces back, these things won’t be sellable. A double whammy for anyone who can see a few years beyond their “lifestyle” decision.
Hey, Ozarkian: I emailed you this but in case you don’t see it, check this out
http://www.agentjo.com/index.php?action=listingview&listingID=60
Thanks this house is truly gorgeous. And claims to have a basement too! But Plattsburg, MO is north of Kansas City — about 3 hours away from where I have to live (near Springfield, MO).
Sleep well. Tomorrow our fellow sheep rush out an go deeper into debt. My family has come up with a very cheap and fun way to celebrate Christmas. We do a secret Santa drawing so that we only buy on gift with a cap at $50. I am a financial terrorist according to Wall Street and Washington.
Rock on - I’ve been financial terrorist for years! My group of friends (some Cal Arts alum and others) have an unspoken agreement that we never buy anything for each other. We make things or find things on the side of the street and refurbish them. Our Xmas party is never dull >; )
Ben
Glad you appreciated the Vanity Fair article. Scathing and to the point. I’ve sent it to many of my friends.
Great article. “vertical trailer park”. That definitely goes on my hardrive.
I also don’t like Richard Meier. He’s only marginally better than Gehry who is hands down the most obnoxious architect around.
With all that money, why didn’t they bring in the Europeans? Foster or any of the Zurich guys would have done a far better job.
Maybe though these buildings reflect the lifesyle of the hedgies - crass, boring, vulgar.
Who was it that said “money can’t buy class?”
Frank Gehry is not an architect, he’s a sculptor. What he makes is not architecture. Architecture is about space and the enclosure of space. His buildings are skin and surface only draped over dumb boxes. He designs his ‘buildings’ always the same way. gehry has some staff member organzie program into dumb blocks, they stack them 100 different ways, they glue cardboard, crumpled paper, wire, mesh and anything else lying around the studio onto the model. Repeatedly cut and paste bits an pieces unitl he is satisified. Then they scan the whole thing in and develop construction documents off off the original POS model. There is no proportion, no scale, the materials seem temporary, and very faddish.
Check out Big Lots for Christmas gifts. Stuff is usually high quality at a much discounted price. Discontinued, or surplus doesn’t mean something isn’t a good item at a great price. Send Macy’s and other overpriced crapbox stores a message.
I think it’s cool that us regular folks on Ben’s blog have beat the “big city insiders” at Vanity Fair for the next meme. The uber kewl (so they believe) smart set are just now discovering the bust, and we’ve been writing about it for 2 years now.
the writer is an idiot
he is english, from london and probably likes the classic old european look where nothing ever changes. one of the nice things of living in NYC is that so much culture clashes here that you get a lot of fusion in food and other things.
back in 1981 when i first came to the US there was no home depot, no nice kitchen renovations, no starbucks, only crappy american coffee everywhere, very little ethnic food, everything in pretty much one style, etc. i like 2006 a lot more than 1981.
there are a bunch of buildings where the only thing you can say is wtf were they thinking building here. other buildings they are building within 5 minute walking distance of whole foods, trader joes and any other store you may want to go to so you don’t waste a minute of your busy lifestyle and people will buy them up.
“The final, unpalatable, zero-tolerance truth is that hedge-fund managers, bankers, cynical architects, and insecurity-exploiting designers are far more damaging to the unstylized life of a city than all the junkies, prostitutes, panhandlers, urban cowboys, bag ladies, homeless, and graffiti kids they replace.”
AWESOME! Finally, leading periodicals are shining a harsh spotlight on these soulless monstrosities, the modern Potemkin Villages. The glossy “lifestyle” image notwithstanding, these sterile and barren ‘filing cabinets for young professionals’ (FIGHT CLUB) reflect the worst of contemporary urban living. The coming depression, in addition to flushing out the excesses and rampant irresponsibility that infects our fat, complacent society, will hopefully usher in a new era of austerity, simplicity, sacrifice, and deferred gratification.
Call me Nostradamus, but I have a dream…I see a vision of blacked-out, prematurely decrepit condo towers, embroiled in lawsuits, while the neaveau rich posers who bought into the garish “lifestyle” chimera are getting their pink slips en masse as the giant debt and speculative pyramid their “wealth” was built on collapses under the weight of its own artifice. Legions of “lifestyle consultants” will fan out for the flyover states, destined to live in the basements and spare rooms of whatever family members or relatives will put them up.
Reading the Vanity Fair account of the Latino construction workers and their barely-concealed disdain for the realtors and occupants of the upscale condos they were building — but could never afford even if they wanted to — I’m reminded of another dangerous truism: the underclass isn’t so much unhappy at their own poverty and lack of opportunity, as they are seething over the undeserved wealth and perceived happiness of their social “betters.” When they find themselves out of work and with hopeless prospects, it doesn’t take a penetrating analysis to figure out who is going to bear the brunt of their fury and discontent.
(Of the empty new apt. bldgs. from the Vanity Fair article):
“Their gymns will have Fox News silently terrrifying the unexcersized machines…Their entrance halls will doze as the elevators wink…”
At long last a bit of poetry injected into wrings about The Great Housing Bust. That is one terrific tell-it -like -it- is article.
Now I am going away to do my breakfast, once having my breakfast coming again to read other news.