“A Market In Transistion”: New York
The Wall Street Journal reports on New York. “Five-Fifteen Park Avenue has everything one could want in a Manhattan home. But on most days, the limestone and beige-brick tower at the elegant Upper East Side address lacks one thing: many of its residents. More than half of the building’s 35 units belong to absentee owners.”
“‘It can feel a little empty,’ says Las Vegas developer and billionaire Phillip Ruffin.”
“A number of the 180-plus residences at the Time Warner Center condominium belong to absentee owners. Thomas Siebel, who paid $28 million for his full-floor home, has rarely been there since buying it early in 2006, say real-estate professionals. The condo fees and taxes on the 79th-floor unit total almost $20,000 a month.”
“Michael Linn recently spent about $2.3 million for a Manhattan residence. He says he bought the Manhattan home for convenience, but ‘putting money in New York real estate was an important investment for us.’”
“The occasional occupants are troubling to some full-time residents, who say their buildings are left depressingly hollow. ‘It deadens the whole neighborhood,’ says Keith Irvine, a long-time Upper East Side resident. ‘You sometimes get a sense that whole streets are deserted.’”
“Antonio Reid says the building can ‘go dead’ some weeks when many residents are gone, leaving hallways empty and his kids without playmates. ‘Let’s just say that my kids aren’t going next door to borrow a cup of sugar,’ he jokes.”
From Newsday. “In Nassau, the median home price fell to $450,000 in January from $470,000 in December, down 6.3 percent from a year earlier. Nassau’s median closing price is at the same level as it was in March 2005. In fact, broker Dianne Clark said it’s increasingly common to sell homes at prices prevalent two years ago.”
“‘That’s what you have to do,’ Clark said. ‘You have to do that. If people price them unreasonably, nothing’s going to happen.’”
“A Freeport homeowner eager to move lowered the price every two weeks when there weren’t interested buyers, Clark said. The small two-bedroom home in Freeport sold last month for $315,000 - $50,000 less than the original listing price in 2006.”
The Democrat and Chronicle. “The market hiccupped a bit late last year, but buyers have come back in force after realizing much of what is happening with falling home prices in the South and West isn’t happening in Rochester, said John Antetomaso, president of the Greater Rochester Association of Realtors.”
“There were 840 home closings during the month, compared with 759 in January of last year. The Monroe County Clerk’s computer system failed for a week in late December, causing some closings to be pushed to January, but the numbers were not significant enough to make much of a difference, said real estate attorney Michael Ringrose. Home closings were down 14.1 percent in December.”
“Buyers are a little more cautious than they were two to three years ago, but ‘buyers are willing to buy if there’s value,’ said John Arquette, general manager of Nothnagle Realtors, which has 570 agents in the six-county region. ‘We may be headed to the market we had 24 months ago,’ he said.”
“Penfield resident Jim Crowley purchased and sold a home last year because his family needed more space. But Crowley did make a few concessions to the buyer. ‘We sensed that things were starting to change,’ he said, adding he did not want to pay two mortgages since he was building a new home.”
“In December, Crowley and his wife Michele and children moved into their 3,400 square-foot home in Penfield. ‘We’re hoping that the house will be an investment,’ Crowley said. ‘We’re not under any delusion that it’s a hot Florida market.’”
“The intensity of the pace is not quite at the level it was two years ago, when sellers were in the driver’s seat, said Rome Celli, broker in Brighton. While home sales are still strong, the asking prices are not as firm in the current market, he said.”
“‘What we have is a market in transition,’ Celli said. ‘We have to assume trends that were there last year will still be around.’”
The Staten Island Advance. “For 2006, Staten Island experiencing a 47 percent jump in the number of people who fell far enough behind in their mortgage payments to slip into some stage of foreclosure, according to year-end data. One in every 52 households here defaulted on a loan, 1.8 times the national average. By comparison, one in 121 homes in Queens entered foreclosure, and one in 96 homes in Brooklyn was in foreclosure last year.”
“Experts have said the problem is driven by an increase in high-risk, predatory lending in the borough, the $6.5 billion in commercial and residential loans taken out by Islanders in 2005, and a general downturn in the housing market. Foreclosures represented about 2 percent of the 163,993 households in the borough last year.”
“The Advance first reported last summer that Staten Islanders were slipping into foreclosure faster than the national average and the rest of the city, and that concern about the problem was enough to prompt Legal Services for New York to open a foreclosure prevention project in Staten Island in St. George.”
“‘We’ve been flooded with calls. We are getting calls from all over the Island and all ranges of incomes,’ said Margaret Becker, an attorney with the foreclosure prevention project. The project opened one year ago and is currently working on about 15 lawsuits against lenders.”
“Citywide, foreclosures jumped 40 percent from 2005 to 2006, according to RealtyTrac.” “A report last year by New York University, found that the rate of sub-prime lending in Staten Island for purchases and refinances nearly doubled between 2002 and 2004, while housing prices here increased at a slower rate than in the other boroughs.”
“Ms. Becker said the majority of cases involve people who have refinanced multiple times, moving from sound, affordable mortgages to risky loans and lumping unsecured credit card debt into new mortgages, often under pressure from brokers and without realizing the ramifications of those loans. She said many people often get into trouble after becoming temporarily unemployed.”
“‘It’s because they are put into these unsound, risky mortgage products that they are losing their homes,’ she said. ‘On Staten Island, something really bad is going on and I can’t quite figure out what it is.’”
‘Donald Trump says that more than half the condo owners at his buildings on Central Park West and Park Avenue are part-timers. These people ‘may not even know the address’ of their New York holdings, says Mr. Trump, but ‘they’d still rather own a place in New York than schlep to a hotel.’
IMO, these folks are speculating, pure and simple, and will look to get out as soon as they realize the party is over.
Donald will say anything to move those places. I actually toured a $900K unit on the second floor near the West Side Highway. It was a very nice place, to be sure, and it was actually for rent: $2,300 a month. And this was just before bubblemania got going. Still overpriced, and if it retreated to that price I don’t think it would sell.
Guys I am back from a long hibernation. I was extremely busy at work and traveling. I just saw the news about house sales for Q4 ‘06 and also saw the comedian DL’s commnet.
Anyways here is something I was not aware of
The median price of a new home, the midpoint where half the homes sold for more and half for less, was $219,300 in the fourth quarter of last year, a drop of 2.7 percent from the same period a year ago.
Median home prices fell in 49 percent of the 149 metropolitan areas surveyed in the fourth quarter, compared to the same period a year ago. That was the largest percent of metro areas reporting price declines since the Realtors began tracking price data in 1979.
And the comic DL said “David Lereah, chief economist for the Realtors, said he believed the data shows that housing, which had enjoyed a five-year boom, was bottoming out in the final three months of last year.
“This information confirms 2006 was the year of contraction and hopefully the fourth quarter was the bottom,” Lereah said. “When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices.”"
I have never seen steady state reached so abruptly. You are far far far away from Bottom Liar -Ah
“that concern about the problem was enough to prompt Legal Services for New York to open a foreclosure prevention project in Staten Island in St. George.”
That’s great. Take money from the responsible people and spend it on the deadbeats. They get carried away with this junk and I will be posting as FormerlyNYCityBoy.
“I think we’re still at the beginning of the down market,” she said. “And I think we’ll see gradual declines this year and possibly even into next year before the market stabilizes.”
The east end (Hamptons) rental market is picking up intensity. Reason # 1 - buyers are expecting prices to unravel over the next couple of years. If you want to impress people, and there’s a fair amount of that out there, you don’t make a stupid home purchase and watch it drop in value by 50%.
This will be a true freefall.
Anyone want to buy a used Mercedes?
Here in Florida there’s a whole page full of BMW’s.
Good friend of mine just bought a condo on 42nd street. They put down a prepurchase deposit of $10k about 18mo ago. The units were projected to sell at $1m, in fact they are offered at $750k.
Rather than lose the 10k they decided to close at $750k. Now they have a special assessment to cover unexpected cost of services???? In the amount of $800/mo above and beyond the $1100/mo regular assessment.
Poof goes the $10K, anyway!!!
Just goes to show that despite the market rolling over and prices starting what will most likely be years of decline, there remain sheep lining up for the shear.
p.s. I tried desperately to convince them this investment was going south. The deciding factor; the developer rebated their 10k deposit and applied another 10k to cover closing costs.
I’m still trying to figure out how a condo is a good investment. It’s like saying a boat is a good investment.
Q,
I’m with you. There are too many people who buy condos as a temporary stage before buying a house. Between school and marriage, or kids, I’ve mentioned this before, but I have a whole mess of friends trapped in condo’s now, just married, looking to have kids…she has a condo and he has a condo, they want to move to a house…that’s two condos that need to sell, two sets of dues, etc, etc.
I think they would be great if we could just make them into more liquid assets. Any ideas?
This is radical, but one possibility is just designing condo buildings differently. It is very common for hive like condo buildings to build built right alongside single family homes that have basements, attics, and yards. It is completely possible and arguably economical to add similar equivalent structures to condos, at least with low to mid rise forms. Condo units that had buffers of both structure and space above, below, and to the sides could provide a very new kind of living.
It seems that one of the reasons this has not yet happened is that so much energy in architecture and building and design especially recently with new urbanism has been all about packing people in as tight as possible. What the green building revolution seems to be telling us is that there are significant practical limits to floor plate density such that the hive like condo buildings that have been built up to now and continue to be built are both radically inefficient and at best borderline habitable.
I don’t understand a word of what you’re saying… Condos suck
There are Garden style condo complexes, which are very much like garden apartments. You should have a balcony or patio, and in the nicer ones it will open onto a big shared yard (or a small fenced bit).
Some also have storage rooms or garages, which give you most of the advantages of a basement or attic.
Unfortunately, most of these (at least the nicer more house-like ones) are almost as expensive as a SFH, so you might as well just get the house and not worry about common charges or special assesments.
I think they would be great if we could just make them into more liquid assets. Any ideas?
We already have things that are like condos but more liquid. They’re called apartments.
You mean “throwing your money away on rent”!
They fulfill a niche demand and that’s about it. I live in one, but between work, school, and travel it functions as a crash pad/oversized P.O. Box for me.
The condo mania that has swept the U.S. will end badly. There’s no way all those buyers of granite and stainless ever fully grasped their potential carrying costs in the long term. In union cities like NYC and Chicago the tax increases alone will assure a collaspe.
The comparison between boats and second homes is an excellent one. I have a relative who bought a used sailboat after he retired last year. Having a lot of free time on his hands, he works on it or sails it almost daily. When I last visited, we went down to the marina, which was filled with dozens of other craft. I asked him how many of the boats actually were sailed by their owners. His answer? “Maybe five.” Yet they all cost money to moor, and for upkeep and insurance.
“I asked him how many of the boats actually were sailed by their owners. His answer? “Maybe five.”
I live on near the water and a rule of thumb I have about boats is that the bigger the boat the less it is used. I will see some guy going out every other day in his 16 foot skiff, but the 40 foot boats just sit at the pier.
It was a good investment for Noah.
42nd St. and what? I didn’t know there were condos on 42nd. It must be far West Side.
Just think what is going to happen over there in Long Island City. Do you see all of those towers going up? Holy moly. But still, Riverdale is worse.
There is actually a good nice for condos (a la Manhattan). Certain locations require high rise housing. In my opinion many cities were due for the transition… but for a fraction of the units.
I also don’t understand why none are built for families. Take the “great park” concept in OC. Why are all the housing SFRs? Multi-bedroom condos would work there (if the glut wasn’t going to be so bad). Open space is needed (and there is far too little of it).
Not to say I’d buy a condo today… oh boy no. Look out below.
Got popcorn?
Neil
The condo market will take a bath in NYC. Co-op prices should hold up better for mnany of the reasons mentioned above in the article. Stricter financials, more likely the owners will live there full time. On another NYC real estate thread someone who was buying a condo on a really desolate stretch of West End avenue was trying to talk himself into believing their will be future retail in the area. I systematically debunked his hopes illustrating how it will not change no matter what the broker says.
http://www.wirednewyork.com/forum/showpost.php?p=144787&postcount=48
Was it the Atelier or the Orion? I think the Orion will hold value better than the Atelier which is right next to the Chinese embassy and faces Falung gong protesters every single day.
To the whiny neighbors: People buying $28 million condos at the Time Warner building with the nice Whole Foods in the basement and the mall on the first 3 floors and where they film FoodNetwork show episodes aren’t the Cleavers. They travel all over the world all the time to make that money and have enough money to have condos all over the world. I think Siebel is a billionaire, but can’t remember. And you should have thought that a lot of apartments in a building that houses the TW global HQ are executive apartments for execs that visit from all the world and aren’t meant to be lived in or to have families. Citigroup is doing the same thing in Long Island City. If you want to complain, cancel your TW cable service.
Nassau is toast. Property taxes are beyond any level of reality and white flight, town independence and other stupid policies are catching up with people. Each town is like it’s own country and the property taxes reflect it to pay for infrastructure 1000 times over instead of once at the county or state level. people there are morons and if you suggest giving more power to the county, they refuse.
Staten Island is a dump and full of stupid people that fall for the crappy home and a crappy mortgage scam from shady builders and brokers.
http://en.wikipedia.org/wiki/Thomas_Siebel
there used to be a nice steakhouse at the TW building on the third floor. Wife and I took some people there as a wedding gift one time and for four people the bill was $450 including tip. Best steak I ever had, but for half the price they have the same brand at Whole Foods downstairs.
Did get a nice view of Larry King, his hot girlfriends and the CNN crew at the next table over. they also have another restaraunt called Per Se down the hall. Reservations take months and the bill is around $500 for two people including the tip and alcohol. Wife wanted to go there, but we didn’t get a chance and probably won’t for several years at least.
Per se is Thomas Keller, the French Laundry guy. Never been there. I wouldn’t even let someone buy me a meal there. What a disgusting waste of money.
‘What a disgusting waste of money.’ I’ll second that. I love to eat and I sure love a great meal, but there is a point where somethings are out of wack and dinning out is becoming one of them.
Per Se isn’t even the most expensive restaurant in that building — Masa is. No way two people get out of there for less than a grand.
Isn’t Masa that LA sushi place? What a weird name. It sounds like it should be a Mexican place.
Yeah, that’s what’s funny — the two most expensive restaurants in NY are basically branch offices of CA places — French Laundry and the Los Angeles Masa. At least with Masa, the celebrity chef himself (Masa is his first name) actually moved there and prepares the food.
Keller works out of Per Se. Has since the opening. Both kitchens are connected via video conferencing and big flat screen T.V.’s
As a woman, no matter how much money LK has, I just can’t imagine it.
Gag.
Nope, but that extends to Howard Stern too. You wanna really gag, read about the “proposal” on his website. I know $400M or so can make it more palatable to some people but still . . .
I can only imagine!
Howard Stern used to be funny when I was first in NYC in 1989. This was back in the work all day and night time in my life at a Wall Street law firm.
We’d order breakfast in at 5 a.m. and he’d be on the boom box and was quite funny. He went too far for me a long time ago.
I went to a NYC escort service website a couple of weeks ago. You can rent a nice looking “model” for $600. King makes a lot of money. He can rent two at a time and have plenty of money left over for grape juice.
A good friend of mine who often seems wise even beyond his many years has a saying that always makes me laugh: If it flies, floats, or f**ks, RENT! Btw, it kind of sounds like these current housing prices have already done the first two for their owners, and are now moving into the f**king stage.
So the meal was about $90/person, before tax and tip. For the whole meal that’s not a whole lot anymore, especially if it included booze. In Paris it would be an entry-level price.
No, it’s $500 for two people at Per Se “without” tip and alcohol.
I was referring to: there used to be a nice steakhouse at the TW building on the third floor. Wife and I took some people there as a wedding gift one time and for four people the bill was $450 including tip. Still, $100 plus booze, tax and tip is pretty standard at top-shelf restaurants nowadays.
I thought a dinner for 4 at Per Se was around $800.
A couple of notes on NYC.
The overall homeownership rate is 30%; only the best off people buy, particularly larger units (which make up just 1/3 of the housing stock vs. 2/3 nationally). So in general we have an overprice problem, not a subprime problem. But this doesn’t apply to suburbs like Nassau. Nor does it a apply to Staten Island, the most “suburban” borough in the city and the only one not connected to the subway system.
The second home phenomenon in Manhattan is longstanding, as is the “corporate apartment” phenomenon, and not a product of the bubble per se. But it has mostly been confined to people who are here frequently on business. Those that are almost never here are in fact speculating, and there seems to be more of that now than before, especially in new buildings.
I think I just said the same thing as dba, but with less attitude.
some of the big hotel chains have executive apartment hotels here in NYC. for some reason some big companies decided to buy into their own RE.
might be cheaper once you factor in the taxi/limo costs, the time spent in traffic, etc since most times their condos are across the street from the expected work area.
i work a block away from the chelsea arts tower and a bunch of other condos on the west side. in my building we have martha stewart, tommy hillfiger and a bunch of other companies. wouldn’t surprise me if they bought a few condos for their visiting execs, models and other VIP’s so they walk to work instead of taking a taxi from 2 miles away.
People all over say their town is different, that “everybody wants to live here.” In fact, there is only ONE city in the U.S. for which that statement has any truth at all: Manhattan.
If someone wants to live in San Diego or Miami, it’s not difficult to do so; pretty much anybody that really wants to be in those places, already is. Don’t confuse the dream of a beach compound in La Jolla or Key Biscayne with simply wanting to be in those cities — the latter is fully obtainable and getting more so.
But in Manhattan, the word “exclusive” can be used literally. Among other things, you need $3500 per month to rent a decent 1BR, and $2 million (and another $5k per month maintenance) to buy an apartment suitable for raising a family. Let’s not get into the prices for schools, food, entertainment, etc. — only so many can swing it, no matter how badly they want to be in the city.
And lots of people want it very badly. There are literally millions of people in the boroughs, toiling away on the dream that they, too, will make it to Manhattan someday. The mindset here (admittedly silly, but hard to escape) is that to resign yourself to living anywhere else is to surrender any hope of a meaningful life and be banished to obscurity and boredom.
Thus, there’s only one thing that will bring more than a modest slowdown in housing here: a big shock to the economy, a major correction in the financial sector. I’m not saying this won’t happen, but that’s what it will take. And even then, the prices in the city will decline only enough to allow the very top layer of NY dreamers to get their foot in the door.
I fully agree that the suburbs are toast, because nobody dreams about living in Manhasset or New Rochelle, even though they’re perfectly decent places. Even Greenwich and the Hamptons will face the same cyclical pressure we’re seeing in other states. But until there’s another 1987-type shakeout, Manhattan stands alone. I wish it were otherwise, believe me.
It won’t happen here, is different. Isn’t that what everyone’s saying?
It won’t happen here, INSERT LOCATION is different. Isn’t that what everyone’s saying?
* the comment utility ate my what I wrote previously I had to repost
My point is, YES, everyone says their place is different, but NO, their place is not different, unless it’s New York.
New York is indisputably different. Things can and will go wrong here, but in its own way.
If NY is so much different then you should buy a condo and just wait for the appreciation to roll in. Why stop at one might as well get two.
If you stopped even for a second to consider what would happen if the properties you’ve purchased might go down. You’ve admitted that prices can go down.
I said it’s different, I didn’t say prices wouldn’t go down.
In its own way as in prices dropping…?
We had a discussion here about 18 months ago about which parts of the country would be most vulnerable to a downturn in the housing market and I submitted that NYC (specifically Manhattan and Brooklyn) would go down less than places like NoVA, SoCal, Vegas and Florida. So far I have been right and I continue to believe that this will be true over the next few years. My reasons then as now:
* Co-ops require high downpayments, limiting speculation
* Rents are high and rising
* The job market is excellent here right now…I know this can change, but the hedge fund, banking , PE boom still has some legs.
* Renting in NYC sucks. Even in the new “luxury rentals”, you subsidize/share your building with low income low-lifes.
* The city is a playground for wealthy trust fund children. There are legions of people like this in NYC who don’t even hold down steady jobs and live in (fully paid for) multi-million $ apartments.
* NYC demand is different for all of the reasons noted above in other posts…execs, celebrities and wealthy foreigners indeed keep pied a terres here in large numbers. What out-of-town celebrity keeps a place (and always will) in places like Boston, Vegas or NoVa?
I have a friend who recently bought a $3.6M condo, been trying to sell his 1BR PH co-op for 9 months now. He bought it in 2002 for $1.15M the day it was listed. Since then he put about 50K into the place, and started the listing last spring at $1.5M, he had it down to $1.35M, but the accepted offer just backed out after the engineer found something they did not like. He may have to sink another 20K into the place just to sell it.
It’s not so nice out there. Meanwhile he has 2 mortgages, one for $3M.
I couldn’t disagree more. Housing bubble subsidies keep the rent in this city high. Let’s just look at so many of the young people that are living in the City and pushing rents up. They are funded by their parents who were in turn funded by the equity in their POSs in Jersey, Queens and Long Island. That funding will soon enough be turned off. Mommy and daddy might require them to go back home.
Credit cards are also funding a lot of the “beautiful people” to live here. Any credit crunch will slow the flow of that spigot.
They are building everywhere around the city. Those places are being bought with “suicide bomber loans”. They will blow up very quickly at the first sign of a downturn. Please also refer to that little thing called the “Law of Supply and Demand”. Supply is booming.
I live and work in Manhattan. I really like it here. But none of the streets are paved with gold. I am the ultimate minority in this city. I am a saver. I can withstand almost any downturn. I doubt many of the other people in this city can say the same thing.
NYCityBoy, I hope you’re right, I really do. While I laugh at those who think crossing the Hudson means leaving civilization, I do really love it here and want to own a home someday on the island.
I am a saver too, and unfortunately I’ve watched my reckless-borrowing friends make far more money just owning crappy condos than I’ve made working and saving over the last few years.
I very much want that to change, but it’s not changing yet. There is demand as far as the eye can see, even though there’s a lot of supply in the pipeline. Credit is tightening, psychology is changing, but that just makes still more people hope that maybe they too can get a piece of the dream.
I’m afraid it’s going to take a real shock, not just an incremental shrinking of liquidity, tightening of credit and flattening of prices.
Sorry if I’m a little downbeat today.
Have they actually “made” the money yet or is it a paper gain..?
“Have they actually “made” the money yet or is it a paper gain..? ”
Exactly, appreciation on your home is far different than say making money from increases in a stock portfolio. The big difference is that your apartment that skyrocketed in value is a non-divisable asset. You can’t sell 10% of your apartment to raise some cash like you can with 10% of your stock portfolio. So unless you’re going to downsize or move way out of Manhattan, you really can’t monitize the value of a bubble apartment. Thus the term “House rich, cash poor”. I think that term applies to many people in NYC.
Oh, some of them have sold and put the money in the bank, believe me. One friend of mine made a profit of $400k on his bachelor condo when he sold and moved into his fiancee’s place.
Thats the shrewedest move to make. But I know of very few people who actually sell their apartments and rent somewhere else. Most owners feel thats like taking some sort of step down. Whatever.
Thus, there’s only one thing that will bring more than a modest slowdown in housing here: a big shock to the economy, a major correction in the financial sector. I’m not saying this won’t happen, but that’s what it will take.
Well, that’s certainly happened before, at least three times in the 20th century (Great Depression, 70s-era, early 90s).
I fully agree that the suburbs are toast, because nobody dreams about living in Manhasset or New Rochelle, even though they’re perfectly decent places.
Actually those places tend to be where most folks want to raise their kids once they pump out a couple. Much cheaper (you can send your kids to public schools) and allows for a more normal childhood. I’m biased here; I grew up in Darien CT.
“And lots of people want it very badly. There are literally millions of people in the boroughs, toiling away on the dream that they, too, will make it to Manhattan someday. The mindset here (admittedly silly, but hard to escape) is that to resign yourself to living anywhere else is to surrender any hope of a meaningful life and be banished to obscurity and boredom.”
How pathetic. NY NY is crowded, noisy, and dirty, and too many people find it necessary to shout all the time. Yes, NY is different, but I wouldn’t be all that proud if it.
I described the attitude, I didn’t say it was justified.
Reply to lowtenant:
NYC is a great place. I don’t want to live there though, to crowded. I love Northern Virgina because of the history, don’t want to live there because it’s so close to D.C and I can’t stand bureaucrats. To each his own. You say there are millions toiling away with the hope of living in Manhattan. If that’s the case, why is my home town of Santa Barbara filled with people from Manhattan? We have a woman here that is from Manhattan. She owns several apartment buildings on the Mesa. She’s obnoxious. She goes to City Hall and brags on NYC and suggests that Santa Barbara would be a better place if it was more like Manhattan. She wants subways, elevated trains, dense construction, you name it.
I’ll give you this much, NYC is one heck of a place. World class.
i don’t know about you but in over 20 years of living in NYC i never wanted to live in manhattan and neither has my wife. in fact i know plenty of people who never lived in manhattan and don’t ever want to.
i work there a few times a month and hate it. almost everything costs more just because it’s manhattan.
Short of a wall street crash or a major terrorist attack, Manhattan wont itself wont have a major downturn. The outer boroughs are a different story. Condos will still dip as they are overpriced and even for those just wealthy enough to buy entry level condos are leveraged to the gills with I/O and ARMs.
“Manhattan wont itself wont have a major downturn”
It’s different there in Manhattan, because of all the Wall Street bonus money
Staten island is a world unto itself, a place you drive through on your way south.
if you can afford a place in the time warner center you are not as concerned with a slowing market as the couple who buys the 750k one bedroom with the 1800 hoa fee’s
70’s headlines ? stagflation alert
# Industrial Output Falls 0.5 Pct. in Jan. AP
# Hershey to Slash 1,500 Jobs Over 3 Years AP
# Oil Prices Hover Above $58 a Barrel
We have MASSIVE inflation in America………but its now called:
PRODUCT DOWNSIZING!!!”
Here is my smal list:
The lastest Skippy Peanut Butter all natural…hmmm All Natual? and its called “peanut SPREAD”????? Now only 16.25 oz down from 18oz
Hellmans mayo…now 30 oz down from 32 oz……Tea bags now 36 in what used to be a 40 box……..Tuna fish now 6 oz used to be 6 1/8 6 3/8 6 1/2oz cans………Most instant coffee is going to 7oz jars…
Entemanns is now smaller, the aluminum tins used to fill the box…not anymore………IAM’s Cat food was 3/$2 for years now 75-79 cents
Table talk 4 oz pie were 2/$1 for years now 69 cents each…….Even cat litter is $1-2 for 14lb jug higher
Even my cheap 24 oz 50 cent bodega soda is now 22oz and a flimsy plastic bottle…they used to be thicker and reusable…
I could remember they always had no-name mouthwash on sale( eckerds Rite aid) for $1.99 32 oz…but the cheapest i’ve seen is $2.99
Even toilet paper…Marcal used to be 59 cents now its 75 cents…all this in the last 2-3 years…
And lets not forget the ICE CREAM PRICE FIXING FRAUD…The price of milk went up real fast 2 years ago….so all the major companies Breyers, Turkey Hill, Edy’s,Friendly’s all went to 56 oz from a Half a gallon ALL WITIN 2 WEEKS…. collusion anyone????…
Now milk prices are down Breyers has a 15% free special to guess what 64 OUNCES ….A HALF A GALLON!
Oh lets go one step further with this “Sheeple Economy” ………..Did you know UPS/FED EX rate increases are not counted in the CPI index?????
Its true….UPS FeDeX base rates are counted but NOT the extra fuel surcharge delivery or oversized fees. UPS made their oversize boxes smaller so more qualify for the extra fees…….
I’m glad you brought this up. I’ve been seeing these price increases over this past year too. It’s insidious in nature and not picked up by the Feds and BB and crowd, however, it does effect the bottom line of the food budget per month.
The ice cream thing really pissed me off. I recall Edy’s was first.
How about yogurt: a few years back Dannon went from 8-ounce cups to 6-ounce. They cut the price a nickel maybe, for a 25% reduction in size.
They do this with salty snacks repeatedly on multi-year cycles. You start with a 14-oz bag maybe, then cut it to 13.5, 13, 12.5 etc. Then when you get down to 11 oz or so you introduce a NEW! Larger 16 oz size! Lather, rinse, repeat.
Looks like this bubble is going to burst for the poor who bought in marginal areas with adjusting rate loans. I think the rich in places like NY and SF will be fine. This is sad as it really shows how America is becomming a have and have not society not only with your income but now with where you can live.
Remember the past: Manhattan co-op prices are dipping now, and slid about 30 percent in 80s RE slump - not as much as boros, but Manhattan isn’t totally immune- especially if the economy goes south. Also - NYU’s furman center’s latest report had some very interesting stats on affordability in NYC as a whole, both in terms of rent and owning:
In the three years between 2002 and 2005, the median monthly rent for unsubsidized apartments in the City
increased by 20 percent. Even after adjusting for inflation, the median monthly rent increased by more than 8
percent. But the citywide median income fell by 6.3 percent, again adjusted for inflation, during those three
years. The combination of decreasing real income and increasing real rents (not to mention other rising housing
costs, such as heating bills), left individuals and families in a serious bind: the median share of income spent on
rent by New York City renters rose from 28.6 percent in 2002 to 31.2 percent in 2005, surpassing the 30
percent threshold that is commonly considered the maximum burden households should bear.
…
The median price of condominiums sold in the City rose 12 percent between 2002 and 2004, reaching
$430,000 in 2004. The average sales price per unit of 2 to 4 family homes rose even more rapidly,
increasing by 34 percent over this two-year period. Housing appreciation obviously is a significant benefit to
existing homeowners. The downside of rising home prices is that they may make homeownership difficult for
more households. Nonetheless, the rate of homeownership continued to rise in recent years — from 32.7 in
2002 to 33.3 percent in 2005.
Other promising signs include: the rate of notices of foreclosure issued fell slightly citywide between 2002 and
2004, and the percent of properties with tax delinquencies of more than one year dropped significantly
during that period. The warning sign, though, is that the percentage of home purchase loans that were
subprime more than doubled between 2002 and 2004. While subprime lending may allow borrowers with
imperfect credit records to gain access to financing, some subset of these subprime loans are predatory and
force borrowers to pay unreasonably high interest rates, making them far more vulnerable to foreclosure risk.
In 14 community districts, over 30 percent of all home purchase loans were subprime in 2005, and in two, the
share of refinance loans that were subprime was fifty percent or higher.
yikes sorry for word breaks…
Just a note: Staten Islanders just saw their property taxes increase on the order of 40 to 50% about 10 days ago. One friend’s taxes went from $3500 to about $5100. The rest of his family and co-workers on the island saw similar increases. We’re wondering what is happening in the other boroughs in terms of their taxes. Could they be far behind?
Well, the governments have a captive market. These folks can sell and downsize without bringing mucho bucks to closing.
“can” should be “can’t”.. ie these folks are stuck in their houses anyway
I have a good friend who is the treasurer of his town. That town and others are moving from annual tax bills to quarterly, in part b/c they think they’ll get more people to pay four smaller amounts than one large annual payment.
Which means that they know they are charging too much so they want to hide it from the taxpayer. I wonder if they will start a withholding system so no one will notice how much it is.
Billyburg shifts to rentals: High-end luxury condos out of reach for hipsters
“With an increasingly saturated condo market in Williamsburg — and with most hipsters unable to afford the high-end luxury units that have popped up all over the neighborhood — renting may be the new buying….
“In response to changing market conditions, developers are also taking other routes: One is converting older buildings into rentals and another is adapting plans to create a condo-rental hybrid. With land prices dropping following December’s 421-a tax abatement changes, the neighborhood appears to be poised for rental development.”
Why “New York is different,” at least for the time being:
Big numbers bode well for ‘07
“If the surprisingly high fourth-quarter numbers in Manhattan’s residential market offer any hint of what’s to be expected during the first months of 2007, brokers will be extremely busy.
“Historically a slow period, the fourth quarter had 2,441 sales — up 55.1 percent from the 1,574 recorded sales transactions of 2005’s fourth quarter. Sales were also up 15.5 percent from the quarter before, according to a report by appraisal firm Miller Samuel.
“I was away after Christmas and came home from my trip four days early because we were that busy,” said Prudential Douglas Elliman executive vice president Darren Sukenik in late January. “It’s been steady, constant and serious since the first week in November. It hasn’t let up at all, there have been no breaks.”
“Buzz about Wall Street bonus money and declining interest rates are responsible for the 15.5 percent increase in sales activity, brokers say. The average rate for a 30-year, fixed mortgage dropped to around 6.04 percent last month from 6.8 percent during the summer.
“Sales under $1 million were interest-rate sensitive and sales under $2 million were bonus driven,” Sukenik said.
“But downward-trending mortgage rates didn’t really result in much change in affordability, according to Miller Samuel president and CEO Jonathan Miller.”
This is why we need links to the actual data- the results for this quarter were skewed (as clearly stated in the report) because co-op sales were just added to public domain.
http://www.millersamuel.com/reports/pdf-reports/MMO4Q06.pdf
Never underestimate the ability of realty news services to spin…also interesting is how they explain a dip in inventory due to overpriced listings being pulled from mkt.
ok trying again- forgive if this is a double-post -but miller samuel clearly indicates in its report that sales figs are skewed up for 4thQ because it’s the first quarter that co-op sales (a gigantic manhattan mkt btw) have been publicly reported.
http://www.millersamuel.com/reports/pdf-reports/MMO4Q06.pdf
“‘It’s because they are put into these unsound, risky mortgage products that they are losing their homes,’ she said. ‘On Staten Island, something really bad is going on and I can’t quite figure out what it is.’”
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Uh, Ms. Becker, I think you answered your question. Of course, what is bad for these FBs is good for those who want to buy a house that they can actually afford. So, it’s not all bad.
Hi Everyone in NYC..my fiancee’ owns a townhouse in Staten Island, I am truly amazed at the prices and taxes for what you get here. I live in Northern Minnesota a beautiful place, where you can buy or build a house for $400K and would be well over 3000 sq ft and a huge yard or land to run naked if you want to.. Soon as my fiancee’ retires we are buying 3 acres of lake shore property from my parents and building a 3500 sq ft house for $450,000 and you all are invited for a BB-Q… But I love you New yorker’s for being so tenacious!!! Deb Minnesota girl Oh PS and we have “great food” the best steak dinner you will ever have for $20 come on over!!!