This Isn’t An Aberrant Market, It Is The Market
A report from Crains New York. “Manhattan’s residential real estate market frenzy is fizzling. The number of apartment sales fell during the second quarter from the year-ago period, according to reports released Wednesday by four major brokerages. Two of the firms also reported a sharp increase in inventory. The average apartment price hit $1.7 million during the second quarter, down 3% from the first quarter of 2008, according to Prudential Douglas Elliman.”
“It also said the number of sales dropped 22% to 2,282 during between April and June, compared to the year-ago period, while inventory surged 31% to 6,194 units.”
“Brokers say the fall off in prices from the first quarter isn’t unexpected. They note that JP Morgan’s recent purchase of Bear Stearns Cos. in a fire sale, which threw about 7,000 people out of work, took a psychological toll.”
“‘This year we have a Bear Stearns hangover,’ said Pam Liebman, president of Corcoran Group. ‘There is a lot more news to make people more hesitant (about buying) than they were before.’”
“Ms. Liebman notes that the price of a one-bedroom apartment on the Upper West Side reached $998,000 during the second quarter. ‘That is a big number. You’ll get a lot more push back from buyers in those [apartments,]‘ Ms. Liebman said.”
Bloomberg on New York. “Transactions are declining as financial firms have announced plans to cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns. Those companies may lose as many as 175,000 employees by next June, according to executive recruiters such as New York’s Gerson Group, casting a pall on a property market driven by Wall Street compensation.”
“‘People are asking: ‘Am I going to have a job?’ said Liebman.”
“About a third of second-quarter closings were new condominiums, some of which went into contract before turmoil hit the credit markets last August and September, said Gregory Heym, chief economist for Terra Holdings. Once the remaining units in Stern’s building and the Plaza close, average prices may drop as much as $200,000, Heym said.”
“‘Real estate markets go up and down, and when it comes to New York City, it’s an island. There’s not a lot of land, and it’ll survive,’ said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I think we need to kiss the ground because we live in New York.’”
The New York Times. “One month’s free rent. Two months’ free rent. No security deposit. How about a year’s worth of storage at Manhattan Mini Storage or an appointment at a doggie day spa for Rover on moving day?”
“As the rental market in Manhattan has softened in recent months, these are some of the incentives that owners of high-end buildings are offering to lure tenants.”
“‘We definitely have seen a shift in the dynamic of the marketplace,’ said David J. Wine, a vice chairman at the Related Companies, which owns and manages about 5,000 rental units in New York City. ‘The frenzy of a year or two ago has abated, and we’re seeing renters be a lot more thoughtful in their rental decisions.’”
“‘A lot of landlords were getting ready to increase rents for the busy season, but they’re finding that those projected rents aren’t attainable,’ said Daniel Baum, the chief operating officer at the Real Estate Group New York, a Manhattan brokerage. ‘No one anticipated having problems on the rental side, and it’s definitely forcing property owners to take a second look at marketing and to rethink their pricing.’”
“Looking ahead, Mr. Wine of Related said that a year from now, the Far West Side of Manhattan between 37th and 42nd Streets may be one of the busiest areas in the city for rentals.”
“Related and several other major developers plan to open buildings that are expected to add 1,500 to 2,000 new apartments to the area.”
“‘In that submarket,’ he said, ‘there will probably be incentives for renters. Or maybe the timing will be great for the market to absorb it - it will be a very interesting time when all those buildings come online.’”
The Hartford Courant from Connecticut. “The decline in the median sales price of single-family houses in Connecticut gained momentum in May, plunging nearly 11 percent, the deepest decline in five straight months of eroding sales prices.”
“It was also the biggest drop since 1992, when the state was digging out of a deep recession. Meanwhile, the number of house sales tumbled more than 24 percent in May, continuing a slide that is now in its third year, according to The Warren Group.”
“The state’s median sales price, where half the sales are above and half below, was down 10.8 percent, to $272,000, from $305,000 a year ago. Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in New Haven, said Tuesday’s report shows the declines will continue. The price decline in May, for example, exceeded the 8 percent price drop for the first five months of this year, he said.”
“‘That shows an acceleration to the downside,’ Klepper-Smith said. ‘There’s no sign that we’re going to see bottom any time soon.’”
“Affluent Litchfield and Fairfield counties took the brunt of the price declines in May. In Litchfield County, the median sales price of a single-family house plunged 17 percent in May to $250,000, from $302,000 a year ago. Sales plummeted nearly 31 percent.”
“Fairfield County saw the median sales price fall 13 percent in May, from $627,500 a year ago to $545,000. Sales plummeted 35 percent.”
“Todd Martin, a Fairfield economist, said the slowdown in Litchfield and Fairfield is being driven economic by troubles on Wall Street. ‘And there’s lots and lots of inventory,’ Martin said.”
From The Day in Connecticut. “The same steep housing slump that has taken down markets in Rhode Island and Massachusetts has finally caught up with New London County and Connecticut. What’s more, there’s ‘no way out’ in the near future, said Vincent Valvo, group publisher of the Warren Group.”
“In New London County, single-family home sales were off 21 percent in May compared to a year earlier, numbering 195 instead of 247. Median prices were down 7 percent, from $270,000 to $249,900.”
“For some time, New London County was showing resilience in the face of a housing downturn across Connecticut, but no longer, Valvo said.”
“‘The numbers you’re seeing in New London County are tremendously off,’ he said. ‘It shows very clearly that home sales are sliding and median prices are decreasing and that the county isn’t immune to the problems affecting the rest of the state.’”
“The dropoff mirrors what happened 16 years ago, in 1992, with one startling exception: The country was emerging from recession then, whereas the nation is now heading toward a recession, Valvo said.”
“‘The only real way to look at this is to realize we aren’t seeing a short-term economic downturn,’ he said. ‘What we’re seeing is a fundamental change in the market. This isn’t an aberrant market, it is the market.’”
The New Haven Register from Connecticut. “‘Last time prices in Connecticut fell more than 10 percent in a month, it was July 1992,’ said Timothy Warren Jr., CEO of The Warren Group.”
“‘But there was a difference then: the state was already pulling out of its housing slump, and sales during that month increased by more than 7 percent. But there was no sign of such a silver lining this May,’ he said.”
“‘Buyers are pushing (the median) down a bit, without question,’ said Sam Ratner, owner-broker at Keller Williams Realty Central Connecticut in Cheshire. With buyers taking their time looking around the market, sellers have been forced to set more realistic asking prices, he said.”
“‘When they over-list the price, they wind up getting less than if they priced it correctly from the beginning,’ he said.”
The Connecticut Post. “Today, it’s the lack of credit that’s driving down prices and sales, Valvo said. Lenders are not only reviewing borrowers’ histories more closely but are also requiring down payments, usually of 10 percent, he said.”
“That means to buy a $500,000 house, Valvo said, a buyer would have to be able to come up with $50,000 for a down payment. That doesn’t include the $10,000 to $20,000 in legal fees, inspections and other costs that pile up as part of the transaction, he added.”
“‘You’ve got economic gravity working against you,’ said Valvo.”
“Donald Klepper-Smith, chief economist of New Haven-based DataCorps Partners, said the real estate market, like the state and national economies, is a mix of good and bad news.’
“‘It depends on which side of the equation you’re on,’ Klepper-Smith said of falling prices. If you’ve already got your house, this is terrible news because your equity is being eaten up. If you don’t have a house, it means you might finally get one you can afford.”
“Mark and Bonnie Fodor were content on Jennie Lane. After moving here from Norwalk in 1999, the Fodors sank thousands of dollars into practical improvements. So when Mr. Fodor developed health problems that left him partly disabled, the couple struggled with the decision of whether to sell their home.”
“They finally decided to sell, thinking the house would quickly attract interest. But they found themselves stuck in a market so unkind that they are still looking for a buyer a year later. ‘We can’t believe it’s taking this long,’ Mr. Fodor said. ‘I thought I would be more insulated in the town of Westport. We thought Westport would have a buffer.’”
“The Fodors tried to negotiate with the one buyer who made an offer on their three-bedroom house, but they couldn’t come to terms. Since the property went on the market in May 2007 they have gradually lowered their $1.199 million asking price; it has now reached $879,500.”
“Even with that reduction, however, many buyers still won’t look beyond the dated kitchen, said the listing agent, Debra Kandrak. ‘If they don’t have their remodeled kitchen or remodeled baths,’ she said, ‘they’re just moving on to the next property.’”
The Worchester Business Journal from Massachusetts. “The number of foreclosure deeds filed in May reached an all-time high in May, rising 107.5 percent over May 2007, according to The Warren Group.”
“The Warren Group said 1,405 foreclosure deeds were filed in May. Not only is that up from 677 in May of last year, it’s up 5.3 percent from the 1,334 filed in April. And year-to-date, 5,576 foreclosure deeds have been filed, a 139.6 percent increase over the 2,327 filed in the first five months of 2007.”
The Cape Cod Times from Massachusetts. “Foreclosures on Cape Cod this year have increased more sharply than in any other county in the state. As of the end of May, 261 foreclosure deeds had been filed in Barnstable County, a jump of nearly 175 percent over the 95 foreclosures completed in the first five months of 2007.”
“Particularly hard hit were the towns of Falmouth, which saw a 725 percent increase in foreclosure deeds; Centerville, with an increase of 383 percent; and Hyannis, with a 350 percent increase.”
“Across the state, the number of petitions fell from 2,158 in May 2007 to just 390 in the same month this year. This decrease is due to a new state law, which took effect May 1, that requires lenders to give struggling borrowers 90 days before filing a petition to foreclose.”
“This drop-off in foreclosure petitions, however, is unlikely to signal the end of the foreclosure crisis, housing experts said.”
“‘Many of the people who had problems paying their mortgage up to the foreclosure are still going to have trouble paying their mortgage,’ said Pam Parker, a mortgage foreclosure counselor in Hyannis.”
The Boston Globe from Massachsuetts. “There is no glaring reason that this five-bedroom Colonial in Waltham has been on the market for three years. It could be any large house in a groomed Boston suburb.”
“The problem, said Glenna Gelineau, a Waltham real estate agent who has watched the tortuous history of the house, was that its initial list price was too high. When the real estate market began falling, it never caught up. It was first listed for $849,000, at a time when the sales market was still strong. Despite 15 downward price adjustments, the house apparently never hit the right number.’
“‘They’ve been chasing the market down ever since,’ she said. Gelineau, who has been inside the house, said it ’shows nicely.’ But, at some point, properties that languish that long without a sale are stigmatized among buyers and agents and become ’stale.’”
“The seller has now cut the price again, the 16th time, a $10,000 reduction to $534,900. Dave DiGregorio, the listing agent for the property, predicted the new price would attract an offer, because it’s now priced ‘below market value.’”
“In this challenging market, which is flooded with properties for sale, setting the ‘right price’ is, paradoxically, more critical - and more elusive. Last month only 3,739 single-family homes sold in Massachusetts, the lowest sales activity for the month of May since 1990.”
“‘The majority of things, unfortunately, are staying on the market way too long,’ said Marybeth Muldowney, owner of TradeWinds Realty Group in Norwell.”
“And buyers know they have the advantage. ‘You’re either going to take my offer or I’m going to walk’ was the attitude of Steve Pelland and his wife, recent buyers in Holliston. ‘We had set a budget, and that was it. I wasn’t going over that by a dollar more,’ he said.”
‘Real estate markets go up and down, and when it comes to New York City, it’s an island. There’s not a lot of land, and it’ll survive,’ said Dottie Herman, chief executive officer of Prudential Douglas Elliman. ‘I think we need to kiss the ground because we live in New York.’
Arrogant REIC BS is a classic sign of this housing bubble, and NYC revels in it. Long time readers will remember that NYC cracked a bit in 2006, but the flood of HB dollars, with a lot of cheer leading from these big brokerages, turned that into a false bottom. But a mania is a mania and nothing can change the result.
NYC is a can of human sardines that can’t see beyond the 5 boroughs…
This is the stupidest thing I’ve ever seen. I live on the UWS.
A 1-bdrm is totally inadequate even for a DINK couple so they were betting on a single greater fool coming along.
That’s a cr@pload of delusion.
The extreme pricing in Manhattan has bled over into surrounding areas. I have seen many 1br apartments in so-called Luxury buildings in Hudson county that were listed at anywhere from $450-$600k. Many of these apartments have been languishing on the market and are now being turned into rentals. Eventually the builders will capitulate and lower the price, but they seem to want to put off that day as long as possible. In the meantime the building in the Jersey City/Hoboken area continues unabated.
Same here in Queens. The expectation that 6 figure incomes from Wall Street will buy POSs in bad neighborhoods at HB prices surely must be losing some ground with the RE faithful.
Sometimes listening to RE bullshiters is like listening to Creationist.
“‘Real estate markets go up and down, and when it comes to New York City, it’s an island. There’s not a lot of land, and it’ll survive,’ said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I think we need to kiss the ground because we live in New York.’”
And another asshole thinks Manhattan is safe from decline. Was she here in the early 90’s when prices fell by 40%?
I remember walking around my neighborhood in the 2003-2004 time frame, looking at the prices for pre-construction condos and thinking, “Where the hell are all these rich people going to come from?” We do get a lot Wall Street people because of the proximity to lower Manhattan, but even if Wall Street was doing well there are still a very limited supply of people who are willing to pay $500k for a 1br apartment.
There is a building that down the street from where I live that was completed about 6 months ago. IBR apartments were being advertised for around $500k. This is a building that is charging $600 a month for condo fees. When you add in property taxes and insurance you basically have another mortgage payment. I now see a few of these same apartments being offered for $3200 a month for rent, which is way over what similar apartments in the area are renting for. I don’t know how these builders haven’t given in to the market yet, the only thing I can think of is the banks are being flexible on loan payments or re-negotiating terms.
She is also incorrect. NYC is not an island, Manhattan (presumbably what she was talking about) is an island.
It seems that prices are now erroding in the less desirable Manhattan locations. I guess the better locations will be next which is unfortunate since I own an apartment in one of them. OTOH I did sell a house in Fairfield County to buy it. If I hadn’t I would already be losing money.
Did I miss a big earthquake?
Manhattan is a peninsula, not an island.
Staten Island and Long Island are islands. Last I saw though you could drive and take the subway from the mainland to these islands though, so it’s not like if you work on them that you have to also live on them.
(BTW the majority of Long Island is still undeveloped)
Actually, NYC is an island, except for the Bronx. Everything else is separated from the mainland by navigable water. That means Brooklyn, Queens and Staten Island, too. And yes, Manhattan got crushed into screaming buy territory in the early 90’s.
Had to look this up to make a clear statement: Manhattan (the island) encompasses two boroughs (Manhattan and the Bronx). No peninsula involved here.
I stand corrected about Manhattan - I didn’t see the Harlem River on the map since I didn’t zoom in close enough. I never really thought of something separate by such a narrow waterway and connected by about 20 bridges an “island” but I guess technically it is so.
Bronx is a peninsula. For all intents and purposes so are Brooklyn and Queens, since Long Island is so large.
At any rate, we’re not talking about Key West here, which truly is an island with very limited land and accessibility. All of NYC is very accessible from the mainland, thus isn’t subject to land shortage. San Francisco for instance is much less accessible than NYC, being on a true peninsula with extensive water all around and only two bridges.
Anyone know what happened to NYCboy?
You’ll get a lot more push back from buyers in those [apartments,]‘
You want to see push back ?? I give you push back….
I believe it gets back to interest rates…Until post 9/11 and the ownership society doctrine being put into place, going back to the early seventies will show interest rates for home purchases ranging from the lows of 8+% to high’s in the 13 +%…Cheap money and loose standards has goosed this whole housing market from San Francisco to NYC….If we see interest rates rise back to those levels (which I believe we will see) no location will be immune from a severe haircut including, NYC…
Amen, and amen; their names are Legion.
‘I think we need to kiss the ground because we live in New York.’
LOL!
Personal story: I interviewed for a job in Lower Manhattan 2 years ago, which would have sucked for a variety of reasons, but had a salary offer of $275K. At the time I thought “geez, I have it made!”…the last time I lived in NYC in 2001 I lived in a tiny Bronx apartment on a salary of $55K/yr.
Turns out my prospective salary wasn’t enough when I pencilled out the numbers using realistic lending criteria that I couldn’t even afford a decent one bedroom anywhere near my job, and I was told to go look at Park Slope, UWS, etc…didn’t sound so appealing when viewed in the context of a brutal 70-80 hour workweek and the fact that I was 37 years old and not so interested (or marketable) in the singles bar scene. Needless to say, I turned down the job.
Irrelevant side story: A buddy took me to a certain notorious singles bar on W. 19th St. after my job interview, where we bumped into a couple of good-looking Realtors™. After some small talk and a round of drinks one of them asked me what I did and how much I made within 10 minutes of meeting me. After I got over the shock at such a brazen question (and the ‘eye sign’ from my friend that this was indeed a perfectly reasonable question), I told them the ballpark figure and that I had an advanced degree, and was a little surprised when they seemed bemused. Turns out, they were making about $1M a year apiece with a lot less education than I had. One of them gave me a phone number when we parted, but feeling insecure about my paltry income and exhausted from the day’s interviews, I junked it. It just reinforced my perception that I am more of a small-town boy and not really cut out to live there. In reading today’s Manhattan update, I’ll admit to a tiny bit of schadenfreude in thinking the RE crowd will eventually be taken down a peg or two with the upcoming sh*tstorm.
Kind of surprising considering the whole objective Post 9/11 was to “de-centralize” our financial infrastructure? The BNY had just previously moved their admin. ops to Mil. WI and with all the brokerages that had “back systems” ( in the OTHER Tower ) you would have thought more headway would have been made?
I suppose it’s a large part of the reason I clear through a broker/dealer in the midwest. There 40k a year buys a very loyal and dedicated employee. Million dollar realtors on every corner in Manhattan? Given this day and age, who needs to fund THAT?
This is what I don’t understand. On one hand, many HBB posters bandy around six figure plus incomes as the norm (not in my world), then you read stuff like this on CNBC: “The tax stimulus is helping to boost personal income, but persistently high gas and food prices will eat away at overall resources,” he said.”
We live in a parallel universe. A $1,500 tax rebate is considered a boost to personal income? Who exactly is CNBC’s audience?
It’s not the norm, nor is it something I would discuss openly if this weren’t an anonymous forum. Besides, I don’t currently earn what I was being offered in NYC, but it’s still a good income and it goes much farther here in Alaska than 300K would go in NYC.
I finished grad school in 2003 and earned very little money before that. I used to think that a six figure income would actually mean something, but here I am still renting 5 years later, still single and still driving the same beater car…
This housing bubble is a great equalizer, because I refuse to spend money on a house I don’t consider reasonable for my income (I figure I can afford about $450K for a mortgage). I know many people who have a mortgage that big, and they earn a third as much as I do. It really messes with my mind.
Ben’s blog has done a lot to make me feel like I made good choices after all, and we’re all in the same boat.
I would have taken the 275K annum and rented. Maybe even in Brooklyn. You would be way ahead by now.
If only…
Idiots who follow Chimp Cramers advice
Loved this story. Thank you for posting it.
prior posting::: “And buyers know they have the advantage. ‘You’re either going to take my offer or I’m going to walk’ was the attitude of Steve Pelland and his wife, recent buyers in Holliston. ‘We had set a budget, and that was it. I wasn’t going over that by a dollar more,’ he said.” ::::
noticed with amusement many times watching all the TV FLip/Buy/Renovate home shows that realtors always push sales of homes to the upper limit, or even a bit beyond, the purchasers stated budget.
they figure that if the home strikes a chord with the buyer that either party will come up or down on price to make a deal happen. after all, when yer spending THREE/FOUR/FIVE HUNDRED THOUSAND dollars, whats a few more thousand to get thehouse of your dreams . .. ?!
I’ve even seen a show where a older mormon relative was an agent and STILL highballed all the homes for a young couple (nephew/niece?)who were grateful for the ” help “. OYE !!!!
these high-dollar, commission-driven, quick-payday-sales are just making people insane with greed. not to mention all the other vultures at the trough in the transaction.
OMG, the worst is Property Virgins. The RE Agent, Sandra, always pushes the “virgins” over their stated limit by telling them there are other offers on the house or that their offer is too low for the buyer to even consider. I just sit there and scream at the TV for these cornballs to wake up and see what she is doing. They never do. They fall for her traps. I want to punch her. Then, I want to punch the cornballs.
Looks like this “cornball” woke up……
Tague said Johnson plotted to kill VanderStelt, took a .22-caliber semiautomatic handgun to the real estate agent’s office, got him preoccupied with some paperwork in a conference room, stood next to him, pulled out the gun and shot him once in the temple.
“We believe this was a planned-out execution-style murder of the real estate agent,” the prosecutor said.
Tague told WOOD-TV in Grand Rapids that Johnson believed that VanderStelt took advantage of him in a real estate deal. Johnson bought a house through him in 2005, then recently decided to sell it and went to a different real estate agent. The second agent told Johnson that, because of the slumping housing market, the home was not worth what he had paid for it.
http://www.businessweek.com/ap/financialnews/D91LB27O1.htm
OMG This shows you just can’t mess with some people.
I’m still waiting for the first “Foreclosure Tour” bus to be shot up with a semi-auto by a disgruntled FB.
That’s when the next stage sets in……
‘I think we need to kiss the ground because we live in New York.’
While you’re down there, kiss your ass goodbye.
LOL
From the original post:
“The seller has now cut the price again, the 16th time, a $10,000 reduction to $534,900. Dave DiGregorio, the listing agent for the property, predicted the new price would attract an offer, because it’s now priced ‘below market value.’”
To which I say, “below market value” may well be lower than the price of this property. Much lower.
Right, three years and 300k later and the Globe still doesn’t get it. What are the rents in the area, Ms Blanton? What are the incomes? As someone said the other day, ‘this isn’t rocket science, it’s a lot more important than that.’
Kim Blanton…HA HA HA!
A shill for the Mass Realtors who is too lazy to do her own investigating and relies on Realtors to feed her information. Typical of the Globe Cheerleading to keep the real estate ad revenue.
Next story from her will be a tear-jerker about the immigrant couple who will be out on the street unless the government helps.
I thought we drove Kim out of Real Estate reporting by pounding her with facts but she must be off her mental break and thinks the bloggers will not be watching her written vomit.
BTW; typical of New Englanders, everyone is trying to maintain the facade of wealth while working 50 plus hours to pay the mortgage nut. Boston prices are not down as much as some places because of this….But when they go…they will go hard and fast.
re Blanton — I concur. Sent her an email once. She did reply…with total BS
I found that Waltham house on Zillow. The owners paid 150K for it in January of 2001. So they were looking for a 100k a year appreciation at the 850k asking price.
How is a $ 10k (less than 2%) reduction in price change a property value relative to market. Apparently, this homeowner has the right realtor for them, a dumba** realtor for a dumba** homeowner.
I’d say 250K for the shack is a good price for Waltham, uh well thats if the economy wasn’t heading into the crapper like it is. So 250 is perhaps way too high. Keep that puppy on the market and compete with foreclosures I say….
“‘A lot of landlords were getting ready to increase rents for the busy season, but they’re finding that those projected rents aren’t attainable,’ said Daniel Baum, the chief operating officer at the Real Estate Group New York, a Manhattan brokerage. ‘No one anticipated having problems on the rental side, and it’s definitely forcing property owners to take a second look at marketing and to rethink their pricing.’”
A) No one anticipated? - Wrong!
B) And it is not really a problem anyway for Manhattan renters.
Yay renters! Yay renters! (That’s our team)
“Even with that reduction, however, many buyers still won’t look beyond the dated kitchen, said the listing agent, Debra Kandrak. ‘If they don’t have their remodeled kitchen or remodeled baths,’ she said, ‘they’re just moving on to the next property.’”
my wife and i looked at a 1.2 million dollar home in northern va. it was a very nice home.
the house, however, had NO bathtub in the master bath. now…i never take baths…and probably wouldn’t even if it had a bathtub in it.
but i will not pay 1.2 million dollars for a house that don’t have a bathtub in the master bath!!!
litttle things like that irk the shit out of me. and hollow plastic feeling interior doors in million dollar homes…oh just don’t even get me started.
Personally, I couldn’t care less about remodeled kitchens and bathrooms. My needs in both rooms are quite simple. And they can be taken care of without granite countertops and his and hers sinks.
But for $1+million dollars we’re not talking needs. There shouldn’t be anything dated or substandard in a house that price.
I’m willing to compromise a lot on my house “needs”, but I’m being a price fiend too. Above about $300k I’m not willing to compromise on anything. For that price I expect everything to be as I want it and in new condition. For $150k I’ll take a whole lot of dated.
Too true. I rather have dated, and not pay some premium for someone else’s horrible, more debt than brains, taste.
I would much rather buy someone’s outdated house and spend the money myself to update it, than to buy a house where someone spent $10 grand to update the kitchen and believes that it added $100 grand to the value of the property.
When we were looking to buy our first house, we were shown one that had just had new carpet installed. We liked the house and neighborhood, but even our innocent eyes could tell that the carpet was cheap. We said, “No thanks.” “But it has new carpet.” “And it’s carpet that we don’t like.”
Maybe there should be self help groups in ‘how to deal with realtors’.
It so happened that I watched a few of those ‘house buying’ TV shows (or parts of them), and all these, forgive the expression, bimbos start out by telling the owners that first, they need to upgrade. The owners then usually grin at them stupidly, and say “such a great idea”.
These realtors are very pompous when it comes to other people’s money, telling everyone how to live, and at least on these shows, no one questions these 30 year old manipulative narcissists.
yeah, AGAIN, what is not making sense is how No Va is escaping all the mess. Yes, things have come down a little but not alot. Condos in Clarendon which is about 4 miles from D.C. are going for 400K - 550K. 1br / 2bds. And there’s alot of them. People are buying them. This is a gov’t town. When did gov’t employees become so high paid? Or is it the defense contractors (subsidized by the Fed) that are paying such high salaries.
NoVa is/was one of the highest bubble areas in the country. CA/Fl/AZ have been affected but NoVa is just percolating along..bubble? what bubble?
give it time.
i think the d. c. metro area will be hit the hardest.
it’s just gonna take the folks a little longer to capitulate due to the “d.c. is immune to recessions” mentality.
Buddy of mine in Arlington lives a block off Glebe Road, near Ballston Mall and about a quarter mile from the Ballston Metro.
His apartment is next door to a large, 10 story condo with approx. 450 to 500 units….he was recently talking to someone who lived in the condo, and he mentioned that there are several condo units for sale that have been on the market for more than 12 months and nuthin is selling.
IMO, a hard rain’s gonna fall in NoVA pretty soon and you’ll start to see median price declines in the 25%++ range
Well that’s comforting at least. I’ve got a friend who can’t sell her converted condo right near the Ballston metro - don’t know how much she’s asking for it. But 2 yrs ago she paid around 330k for it. Feel bad for her - she was in a bind when she bought it.
However, I really think a 40% drop — at least on condos — is needed. These units are tiny - one person could go crazy in them. There’s no way a couple could survive which means there’s going to have be a lot of single 80K earners out there looking to buy. Not likely. imho
The Orange Line in Nova is going to be devastated. I commute through the Va Square stop, have been for several years. Two years ago, with great expectations “The Monroe” opened its doors, starting price for a 2 br/2.5 ba 1400 unit was $825,000. (If you look due North from the Va Square Metro, it’s the 8 story building directly behind the block in front of you and just west of FDIC). I greatly enjoyed sending emails for nice SFH’s that were twice the size, yet only 2 miles away, to the realtor marketing them, but consistently received the reply that “that is a beautiful home, but the buyers of our units are interested in something different” type responses. As if condo living, with its convenient shared walls and monthly a**-reaming HOA fee is far superior to living in an actual SFH. Within 6 months, I never saw another ad for the units, and still wonder what’s happening with them.
There was also an Ed Peete developed condo building on Wilson Blvd (Directly South of Pollo Rico) and about 1.5 blocks from GMU law school. That building is notable because it is literally developed around a gas station with a full service garage…so you get to wake up to the air wrenches in the morning. Nothing like sitting by your rooftop pool to the quiet serenade of lug nuts being tightened. This particular building is now a high-end hotel…it couldn’t even make it as a rental building.
In short, I have been an avid spectator of teh Orange Line Condo Canyon, and it IS going to fall HARD. There are already signs of distress showing. Now that the “Liberty Center” (so ironically named, as you look out the window only to see other FB’d yuppies staring back at you from their 900 sf prisons) has hit the market, Ballston - Va Square - Clarendon is going to TANK. And I’ll greatly enjoy watching.
I take comfort knowing the cost of my law degree is a fraction of the losses being sustained around me as I walk to class (at least in dollar terms…though usually I would have to be getting paid to work this hard).
I had to follow up my comment with proof that I do not lie…that Ed Peete building is now the “Hotel AKA” in Va Square: http://www.hotelaka.com
If you look at the left side of the pic of the Va Square location, you will see a red pickup in the driveway of the garage. The garage is literally a street-level tenant of this former “luxury condo” building…
Sorry…just had to post it. Note that another proposed condo tower in the immediate area will have a funeral home at street level…BAH!
Yeah, its sad how much the Orange line area has changed. I moved here 10 yrs ago and it was a cool, hip, moderatley affordable area then. It also had alot of unique individual owned restaurants/shops. Most if not all have been run out of business by the corporate invasion. Yeah, there’s now a Barnes/Noble, Pottery Barn, etc etc but I still prefer the old Arlington. sigh..
I hear you. It’s sickening the corners these builders cut to pad their bottom line. Cheap fixtures, cheap carpet, all bought in bulk and sold at maximum markup.
“Ms. Liebman notes that the price of a one-bedroom apartment on the Upper West Side reached $998,000 during the second quarter. ‘That is a big number. You’ll get a lot more push back from buyers in those [apartments,]‘ Ms. Liebman said.”
I lived in NYC in 2001, right before the run-up (which stalled a bit after 9/11). A 1BR decent but no-frills apartment in the UWS rented for about $2500/mo back then.
There is no way that kind of rent would support a $1M mortgage. I wonder what rents are in 2008? My guess is they still don’t support that kind of mortgage.
‘For Mackenzie Rosenthal, who will be a senior at New York University next year and who will be moving into a one-bedroom at 20 Exchange Place this summer, ‘the perks were just kind of too good to pass up.’ She said she and her father had “pored over the lease, saying: ‘Where’s the catch?’ but as far as we can tell, there doesn’t seem to be one.’
‘When she and a roommate moved into her current two-bedroom walk-up in the East Village, they had to come up with $12,000 to cover the broker’s fee, security deposit and first and last month’s rent. ‘That was just ludicrous,’ she said. ‘But when I move into my new apartment, all I need is the first month’s rent.’
‘Ms. Rosenthal said that after factoring in the free month’s rent, her $3,000 apartment will cost her $2,750 a month. She worries that she will not be able to afford to stay in the apartment when her one-year lease is up, but her broker, Jeffrey Carlson of Platinum Properties, said that as an original tenant, she might be able to negotiate the same rate at renewal time.’
I have a friend who just recently moved back to NYC and I was very surprised at the kind of deal he was able to get on a studio rental on the Upper East side. As dependent as NYC is on the financial services industry it makes sense. The whole New York area is going to take a huge hit over the next few years, I think we are just seeing the beginning.
Frank,
That’s kind of what I alluded in my post above. I thought the whole idea was to allow NYC the space to diversify ’somewhat’ and to create a number of fiduciary/custodial/admin. centers across the country?
It seems to me almost 7 years after 9/11 our finances are as concentrated as they EVER were? If you didn’t have huge brokerages “crowding out the sun” there might be room for other industries to get a toe-hold.
Some of the diversity that places like Goldman Sachs have done is to move back office and operational personnel to Jersey City. But you’re right that they haven’t done the kind of geographic diversity that was being talked about after 9/11. The entire New York metro area (NYC, North Jersey, Southern Ct and a few counties in New York state) is tied into financial services. The repercussions of downsizing of these businesses is enormous for this area.
Ben, that is just freaking insane! I love Manhattan, but not that much…
$12K to move into an apartment?
Wow…
“Jeffrey Carlson of Platinum Properties, said that as an original tenant, she might be able to negotiate the same rate at renewal time”
That and $2 will get you a ride on the subway. Or has it gone up?
What is this with the might? What value is that? Even if he said it without the qualification it isn’t binding if it isn’t in writing. Who would take the word of a realtor? Haven’t they heard of all the people who were told they could “just refinance”?
This is a prime example of people having more (fake) money than brains. A college student living in a $2750/month apartment? WTF? Why? In case you haven’t noticed, dimwit, the “catch” in the lease is that the monthly rent is $2750 and you are a college student whose lifestyle is being funded by your pops. To hear a statement like “the perks were just too good to pass up” from a college student simply reeks of greed, as does the fact that you’re working with a realtwhore from a group called “Platinum Properties”. And although some colleges have too little housing to go around, I’ve been told that NYU has enough dorm space for its students and that the dorms are quite nice…so it sounds more like a case of Miss Mackenzie Precious being too good for that.
There’s your glaring reason right there!
Nearly a million bucks for freakin’ Waltham! Oh! Ha! HAHA! HAHAHAHAHAHA!!!!
For those not in the Boston area, Waltham is a nothing-special suburb that, until the housing mania, was generally considered a low-rent district with some good restaurants/bars but overall a little shabby. Many residents do not speak English. It’s not even particularly close to Boston. The idea that anything in Waltham would be worth close to a million dollars is insane.
I can scarcely express how much I love to see this greed and stupidity rewarded so handsomely with a three-year excursion chasing the market down, down, down. Hey, free ride! Woo hoo!
Buuut… Waltham has the commuter rail! and easy access to the parking lot otherwise known as Route 128! And its next to Watertown! That’s got to count for something!
My dad grew up in Waltham. My grandmother still lives there. Her and my grandfather moved to Waltham from Italy in 1949. Neither had finished high-school due to the second world war. They bought a two-family house on High St. and saved every penny they got, including the rental income. The house has been paid for forever. They’ve gotten by just fine, but they were never rich. I’m guessing their house, with an incredibly dated interior, is probably worth $350K in real terms. At the bubble comps in their area were selling for around 600K+
This is just another soggy Kimberley Blanton piece. She should be fired, she seems to have no idea that local incomes don’t support Boston MSA prices. What an idiot!
And of course, no mention of the $900 per fill oil furnaces in NE this winter (up from $500 per fill last year). The typical house gets between 3-4 fills a winter. Have fun with that!
My problem with Kimberly is she refuses to research the very easily accessible registry records - despite the fact that I’ve sent her the link to the Mass Land Records site after each of her articles.
I’ve got coworkers that get fills on a 275 gallon tank every three weeks (Stay at home wife with two kids).
So say they’re down to 50 gallons in reserve, that is 225 gallons @ $4.60 a gallon (I’m basing that on the Globe - I rent and have natural gas) every three weeks. That’s $1035 every three weeks, or $1380 every four weeks.
Five months at that? Ouch.
So which market is the true Housing Crash poster child in the Northeast these days? I was thinking it was either Providence RI or Southern NH, since it seems Bostonians are still drinking the Kool-Aid.
Boston is coming down nicely, thank you very much. Still a few hold outs, but for the most part we are down at least 15%.
Boston is coming down nicely, thank you very much. Still a few hold outs, but for the most part we are down at least 15%.
But given the runnup over the last nine years, we’ve got a long ways to go. With food and energy inflation, interest rates moving higher, and an unstable economy, I wouldn’t think of buying a house for more than $300K and we are a mid six figure income household… 2X gross income still seems much to me.
BTW, that $300K house should be 1500-2000 sqft and fairly modern (i.e. built after 1990). Maybe we won’t be buying a SFH in Mass for a while…
If I earned about 150K, I’d definitely buy a 300K house. Just my opinion. Wish I had that option!
I’ve done Ms. Blanton’s work for her (as I’ve done many times before..)
The seller of the 4/2 in Waltham bought the house in Jan 2001 for, wait for it.. $150,000. (she did get a mortgage for $175,000 though - very odd at the time)
She refinanced 3 times but never went crazy - the last time was in 2004 - it looks like she may owe around $250,000.
So - 2005 comes along and she decides to try to sell reap a profit of 3 times her investment… amazing.
To answer Ben’s questions above - rents in Waltham for a 4 bedroom home start at $2300. I’d say the price now is getting into slightly realistic territory for a 2 income professional couple in the Boston area.
On th waltham shack… Thanks for the 2001 history
I revise my 250K zestimate. OK 100K dollahs, I forgot the heating bills with gas and home heating oil gonna be 2X last year. Maybe to save on heat, I could use some of those blue plastic tarps and duct tape to seal off some of the unused bedrooms.
The more I think about and the more I poke around the registry records - I’m thinking the 2001 price was a little off. I was actually looking for condos earlier that year - if there were 4/2 colonials actually going for $150,000 I would have snapped one up. She seems to have had a relationship with one of the sellers (they transferred the deed back and forth between one another on another home in Weston). Maybe she paid him under the table to screw over his siblings (?) - the 2001 sale was from an estate.
Regardless - I’d say the 2001 value was between $300 -350K - she was still pretty damn greedy when she asked for $850K in 2005.
I’m going on record stating that Kimblerly Blanton is the most pathetic real estate reporter out there.
Come on, who’s worse?
Some of those people at the Washington Post are pretty bad.
From today’s Post:
Guess who
also got a questionable Countrywide loan?
My word.
BO’s was from Northern Trust.
Jim Johnson was Countrywide. Getting hard to keep track..
“Some of those people at the Washington Post are pretty bad.”
Absolutely …. I can’t stand their Real Estate Discussion board. Basically, the main idea is “everyone wants to live in DC…”
I’ve mentioned this before on the blog, but I was on match.com for several months when I first moved to the D.C. area in late 2006, and as a faithful reader of the HBB, I couldn’t help but notice how many women (and I’d assume guys as well, but I don’t spend much time checking out their profiles
) felt it was important to mention in their match.com profile introduction that they were a homeowner or “recently took the plunge and purchased a chic condo in Bethesda” or whatever……seriously, it was almost like being a renter was a major deal-breaker to all these single folks in D.C. who we now know are major FBs….
Hilarious! It’s not just on Match.com. I live in Vienna, VA (for you non-DCers, a nice bedroom community 12 miles from downtown) and we recently re-located from our rented condo to a rented SFH. Apparently, the owner of our new home and our landlord has been renting this house for about 12 years now (he actually tried to sell it for over $600K as recently as 6 months ago, but of course didn’t get that). It’s an small-ish, average post WWII brick home on a pretty small lot. Our immediate neighbors are very friendly and nice, but recently they introduced us to one of their neighborhood friends. Upon introduction to us, she said excitedly “oh, I didn’t know that house sold!” to her friend. When I interjected that we were renting, we were promptly (and rudely) ignored.
We renters are certainly the skunks at the garden party.
Christie Smythe, Arizona Daily Star, Tucson
I second Kim Blanton. Even in the face of facts she can still cheerlead with the best….and sleep at night with the assistance of an Ambien and a nicer Merlot.
And she would have gotten away with it if it wasn’t for those meddling bloggers
To answer Ben’s questions above - rents in Waltham for a 4 bedroom home start at $2300. I’d say the price now is getting into slightly realistic territory for a 2 income professional couple in the Boston area.
That $2300/mo rent for a 4 bedroom in Waltham means the price (based on a cash-flow investment) should be somewhere between $275K and $300K depending on the condition (i.e. deferred maintenance). That house is still $200K overpriced from an cash-flow perspective.
“‘You’ve got economic gravity working against you,’ said Valvo.”
No, you don’t. Economic “gravity” goes neither up nor down but pulls toward a certain direction, even sideways. If you under the very simple, very basic laws of supply and demand, add in any anti-market forces (regulations, taxes, restrictions) and throw in a strong savings, you can ride WITH the flow of economic movement instead of against it.
Anyone who ridiculed the housing market as a wise investment in 2003 _was_ an idiot, even if they were correct in the long run. Malinvestment markets are relatively easy to jump into if you understand that cash tends to flow together in rises and exits together in falls. So short the falls when you realize a malinvestment market is finally reaching the pinnacle of who is buying into it.
I did fairly well in the dotbomb because I noticed a certain type of people asking about investing in Microsoft and the like. Didn’t take much for me to realize the malinvestments would be saturated. When the common man lost his life’s “savings”, I realized that the wealthy who exited early enough (as I did) would want to put their money elsewhere to con the common sucker. Housing it was.
So “economic gravity” can work for you. If you can live well beneath your means, and save more than you spend (including what you spend on our wonderful government costs), you will have more than enough to play with as you ride the indicators to profit instead of loss.
When a malinvestment market is forming, it makes sense to not be a contrarian. When that market reaches the masses, becoming a contrarian is a good way to succeed.
There’s not much to it. The key is to have money rather than not. And the key to that is to not live beyond your means ever. If you can’t learn that lesson, then yes economic gravity is killing you. Actually, you’re killing yourself, but while you do, you’re keeping me fed nicely. Thanks for listening to the masses, and keep on doing it if you can, I prefer steak over burgers.
‘Anyone who ridiculed the housing market as a wise investment in 2003 _was_ an idiot’
That’s funny, these people are on TV now being praised for seeing this bubble for what it was. When we get back to 2000 prices, you may sing a different tune. Relying on greater fools is not investing.
That’s funny, these people are on TV now being praised for seeing this bubble for what it was. When we get back to 2000 prices, you may sing a different tune. Relying on greater fools is not investing.
So name a single investment market that hasn’t proven itself that “profits” always rely on greater fools? Every basic publicly-accessible investment market is exactly that, which is why it is important to either learn to day trade in the short term, or try to figure out where the foolish masses are going next.
I only “invest” primarily in local, controllable businesses, preferably my own. Dividends of 20-40% on my money are realistic, as long as you have control over what the main managers are doing. Every other investment I’ve seen offers almost no dividend or profit sharing. Yes, I understand that some publicly traded corporations take their profits and roll them into expansion, but they also roll them into high bonuses for the top tier managers. No thanks. Combine no personal control (from me) with no dividend (to me) and you’ve got what I call “the next suckers game.”
I personally exited the housing market a few years before peak, but it was obvious when my $150,000 crapbox in Gurnee, Illinois went from $130,000 to $200,000 in a matter of a few years (and then up to $300,000 for the next sucker who bought from my buyer). Obvious, indeed. But I wasn’t one to try to time a market further when I was able to exit profitably, and yes, houses are difficult to sell unlike stocks or gold or currencies.
So I agree that when prices fall to 2000, or beyond, there will be many more knife catchers who tried to time the bottom. I do believe in the plateau theory for property investments, plateaus near the bottom, plateaus near the top, but I will happily wait until I can find property that sells for 50X or 60X rent in a primarily rental area. Until then, I won’t touch it again.
Problem is, the housing market is MOSTLY leveraged money, so any negative position is practically untenable and leads to foreclosure/ruin. Second, real estate takes time and costs to sell, so unlike a commodities index or mutual fund, you can’t just take the market price and be out. You need a buyer.
So your strategy sounds fine, but it doesn’t work as well in real estate. Timing a top or bottom to switch strategies is hard, and especially hard to people who’ve never done it before.
Problem is, the housing market is MOSTLY leveraged money, so any negative position is practically untenable and leads to foreclosure/ruin. Second, real estate takes time and costs to sell, so unlike a commodities index or mutual fund, you can’t just take the market price and be out. You need a buyer.
What investment market is NOT based on leveraged money?
1. Stock market? Yes.
2. Housing market? Yes.
3. Commodities market? Yes.
4. Currencies market? Yes.
That’s why investing, to me, is ALWAYS a gamble. ALWAYS. There is no way to look at it as anything else. And just like gambling will always run you to the game’s long-term casino profit margin (as low as 0.4% on craps), most investments will probably run you to the profit margin there, too, which tends to be the real rate of monetary inflation, as far as I’ve charted in most investments I’ve looked at.
This is why when people ask me “How do I make money quickly?” I tell the same answer, and have for 10+ years: You can make money quickly by working hard, saving in a basket of currencies and commodities, and spending way less than you earn. “But that could take decades!” Exactly.
Not only are most investments a gamble, the house always has the better odds.
A.B Dada,
I’m from that neck of the woods my damn self so I DO hear ya’. Most of my clients that have done very well do so for the most part because they own small businesses and value cash flow over “equity”. In ways I’ve come around to your way of thinking, sure… I’ll buy a stock but you know what? I kind of need to see the money up front. Let’s talk 9-12% on the dividend. If it appreciates, great but in the mean time I need to be compensated.
I will say though that most folks probably don’t share your ‘nose’ for a good local value and I think the point IS valid that RE is ALL leveraged money. When it comes to stocks if you fall below 35% equity ( you’ll be getting an unpleasant call ) Well compare that to RE. Who comes up with even 35% down anymore? Others here have pointed out that we need to raise min. margin requirements for commodities, and I agree.
And, of course, calling your primary residence an “investment” in any economic environment is nonsense.
Where you live is simple an economic decision. If you have a more generous budget you may decide to trade some money for amenities that are important to you, but in the end it should be simple economics.
I thought your style of thought and conversation went out of style.
There’s not a lot of land, and it’ll survive,’ said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I think we need to kiss the ground because we live in New York.’”
Icky! I would think New York is the LAST place in the world anyone should kiss the ground. But then, I am not accustomed to crazy city-folk ways. Maybe it’s a newfangled fad out there. Fasty? Is that how it is?
“Kiss the ground” sound more like a Mob threat, like “sleep with the fishes.
You know, “You better buy this apartment or you may kiss the ground.”
Whatever.
I love NYC, faults and all, because it has a lot to offer to me. It’s not for everyone. And I’m willing to put up with the warts for what I get in return.
However, I ain’t kissin’ no ground. Besides, the dog pee would get on my lips.
Speaking as the offspring of two born-and-raised New Yorkers who left the Empire State, I can say that kissing the NYC ground is the last thing I’d do. Must be the influence of my mother, who, as an Upstater, has only the saltiest things to say about NYC.
OTOH, Dad’s father worked on the Street back during the Great Depression. Dad still has stories to tell about that time.
My grandmother was working on the street during October 1929. According to her, the crash wasn’t considered a calamity at first since there had been other crashes of approximately the same magnitude in the recent past(although only hard core Wall St. historians today know anything about the crash in 1906 and one other sometime around WWI) and after those previous hits everything bounced back. She said that it really hit home about a week or two later when she was walking down a street and cops were shooing people away from the area where a jumper had just landed.
Fortunately (for the pedestrians, of course) most office building windows can’t be opened now, at least not easily.
Fortunately (for the pedestrians, of course) most office building windows can’t be opened now, at least not easily.
–So that’s why they built them like that. Always wondered ..
“‘It depends on which side of the equation you’re on,’ Klepper-Smith said of falling prices. If you’ve already got your house, this is terrible news because your equity is being eaten up. If you don’t have a house, it means you might finally get one you can afford.”
Or, you could already have a house, but have gotten one you could afford to begin with and that you planned on living in and view as a place to hold your books and shoes and yourself and NOT as a place to flip or pump equity out of, in which case falling prices only mean a potentially successful appeal of county property tax assessments and an opportunity to laugh heartily at people who were either not as smart as you, or else greedy, or else both.
Now watch me, because I’m going to laugh loudly and snarkily right now…here we go….’falling prices’…HAHAHAHAHAHA!
Equity is a moving target. I’m just glad that now the (traditionally qualified) buyers are the ones who get to have the final say.
“‘The numbers you’re seeing in New London County are tremendously off,’ he said. ‘It shows very clearly that home sales are sliding and median prices are decreasing and that the county isn’t immune to the problems affecting the rest of the state.’”
“The dropoff mirrors what happened 16 years ago, in 1992, with one startling exception: The country was emerging from recession then, whereas the nation is now heading toward a recession, Valvo said.”
“‘The only real way to look at this is to realize we aren’t seeing a short-term economic downturn,’ he said. ‘What we’re seeing is a fundamental change in the market. This isn’t an aberrant market, it is the market.’”
*****
Emerging versus entering a recession…
And it’s “the market”, not an “aberrant market.”
I’m going to remember these the next time I talk with the remaining Kool-Aid drinkers in the Alt-A Bay.
So maybe 1994 prices (inflation adjusted) aren’t out of the question….
That doesn’t include the $10,000 to $20,000 in legal fees, inspections and other costs that pile up as part of the transaction, he added.”
What baloney ! A lawyer is about $1200 a transaction, inspections are no more that $500, where the hell are they getting all these additional costs from ?
I made an offer on some land once that wasn’t legally split and had to be rezoned and have a wetland analysis done. (The offer was contingent being able to do this.) The process took a year and involved an attorney being present at two city hearings, two surveys, and a plant expert (to testify before the County about the wetlands).
The whole process, laywer, surveyor, expert, didn’t add up to $10,000—and took over a year to complete. And this was only a few years ago.
(BTW: The Realt-whore who listed the property allegedly knew “nothing” about the problems even though it was on the market for 8 years without a nibble.)
points? i know that is quaint….
The most hilarious thing about the story is that they’re using the worn out “not making any more land” excuse for arguing the health of the NYC mkt. Dudes, NYC grows vertically. And the problem with that argument is, they’re not making any more buyers.
Nice to finally see the nyc media discuss inventory. They should have been tracking that with ever RE story they did - but this is the first time in many many months I’ve seen it mentioned. You can bet it’s even worse than the RE-affiliated data providers are saying.
Please, forget the “vertical” part.
Take a drive down 10th Ave. There are empty unused blocks everywhere.
There is ungodly amounts of land waiting to be developed. As for the infrastructure, that’s a different story.
The thing that happens in NYC and other areas is they have this odd notion of “equivalence.” Fancy established apartments that overlook Central Park start selling for $XX Million Dollars, so people start thinking that Park Slope should be worth that, too, and everything starts to bubble. I think this provides one of the “seeds” for people believing that all apartments everywhere in NYC–from the Bronx to Staten Island–are worth a fortune.
I saw the same thing happen in Silicon Valley. For years, there have been some ritzy enclaves with truly nice homes and exclusive neighborhoods: Atherton, Los Altos Hills, parts of Palo Alto. In the very early days of the bubble, when prices here started creeping up because of legitimate supply and demand, Realtors starting holding up Atherton prices to “investors” buying in Fremont declaring “Look! Silicon Valley Prices are booming! Get in while you can!”
I’m not saying there wasn’t a bubble in Atherton, Los Altos Hills, etc. Prices there are coming down. What I am saying is that realtors will take a truly exclusive neighborhood and try to convince suckers that everything with in a 10 mile radius is going to be the next exclusive area. They use this technique to get bubbles to froth….
GM at 54 year low.
wow…that’s gonna be sore in the morning.
No kiddin’!!!
GM, as most of us probably know, makes (or rather, made) a large portion of its profits from its GMAC financing division. I’m sure they have defaults coming out of their wazoo by now.
I wouldn’t touch GM, but I’d try Ford, if you want to bet on an aquisition/takeover.
I remember when Ford and GM decided that the hybrid market wasn’t going anywhere in 2006, and scaled back their plans to debut a new line of them because it was a “niche” market. I bet heads are rolling now.
I don’t think there is any profit in the hybrids, even today. It is all about image. I think every Prius cost Toyota money to put on the street.