UrbanDigs on FOX Business News

well, I just found out that when you think you will have a minute of air time, and get to discuss 2-3 questions, you probably won't!

I found out from the other guest contributor of TheGlobalGuru.com, as we were talking before the segment, that I better compact my answer to about 18 seconds.

He was right! Anyway, biggest point I decided to get across was that YES, foreigners are still taking advantage of currency trends because of the weak dollar, but we must take into account the dip in confidence here as well as the credit crunch continues and headline shock is felt internationally. This headline shock is trumping what otherwise is a solid element supporting Manhattan real estate. We must take down expectations that otherwise would come from a US dollar at record lows against other major currencies, when it comes to foreigners buying real estate here in manhattan. The story is not new, and many foreigners already put money to work, which is one reason why new dev inventory has sold so well and our total inventory continues to be tight as the nationwide housing slump worsens.

Noah,
Good luck with the new site. Interesting piece from the NY Times this weekend......."While much of the country has been worrying about foreclosures on subprime mortgages, researchers at the Furman Center for Real Estate and Urban Policy at New York University found last month that only a tiny fraction of Manhattan apartments, eight-tenths of 1 percent, were bought with subprime loans last year.".......plus if I am not mistaken according to Bankrate 30 yr non conforming(jumbo) loans are back to pre credit crunch rates(April-May)? Those higher jumbo rates were basically my only concern for Manhattan. Do you have the same data?
Thanks, keep up the good work I am a daily visitor and an investor in Manhattan studios.

Steve,

Thx. Yes, its NOT the defaults and foreclosures that will effect Manhattan, its the side effects of all this:

a) dip in confidence in buyers?
b) tighter lending standards
c) higher jumbo rates
d) tighter appraisals

so its not the defaults, but the effects of all this that could change fundamentals here. Yes, it seem rates dipped back down again but that is in part to 75 basis points of fed easing and 10YR bond yield falling big time with stock market sellof from credit crunch. If it wasnt for repricing of risk and this credit crunch, we would have seen much lower rates!

Noah,
Yes, I failed to mention that I also have concerns about tighter underwrighting qualifications. I've been looking to refi for equity pullout to buy another property and I have run into unfavorable rates of about 50-60 basis higher than my comfort zone from Wells Fargo, BofA and as expected Countrywide. It's funny, I don't know what it means but Countrywide was really pursuing my business when they were in that meltdown a month ago. Anyhow, I'm BETTING that this too shall pass and the desire to live in Manhattan trumps the credit crunch. Thanks for your info and opinions.
Steve

Same issue with the Hamptons. Number of sales are up (YTD) and median and averages are up 20%. Inventory is aplenty in certain ranges, making for some terrific deals on some spec-homes, but inventory is still tight in the most in-demand properties. While business is ticking along nicely, the psyche is taking a hit due to Wall Street, Miami, Detroit, Las Vegas bad-new-drone.

Several of our financial guru clients say they will wait til after Jan1'08 to get back into the market. Well, that's when the market kicks off for rentals and "get in by the summer" sales out here. If they all wait, then the great deals out there now will evaporate.

Just another example of why we need to go to the expert in a field where we are not. md

You'll do great! Just be careful. Neil might ask you if you think that Hillary and the Dems might ruin free markets and democracy.....

Hey Larry! Thanks. Was fun, although I wasn;t crazy about the hair & makeup part of the experience. I usually limit those to Thursday evenings.

Regarding foreigners supporting the market:

I don't see why this a good thing, it basically means only speculators are propping up the market.. this may be good short term, but will lead to bad things later. The dollar can turn on a time for the following reasons:

- pull out of iraq
- the rest of the world catchs a cold from USA
- dollar literally crashes forcing the FEDs into an emergency rate HIKE
- inflation gets totally out of control forcing string of FED rate hikes

uwsider - I AGREE COMPLETELY! And this is the conversations I had with Nick before airing. Someone mentioned that 40% of buyers here are foreigners taking advantage of currency trends ( a Harvard Study or something), which I disagree with.

But if that is true, which its not, we are in deep sh$t!

We are better off with a healthy mix of buyer types so that all eggs are not in one basket. I would say 10-15% of buyer pool here right now are foreign investors taking advantage of currency trends. Of course, I have no evidence to support this!

I also think that buildings will become more selective in terms of the owner/occupied issue. Banks will require it. So, at least during early sales in new buildings they may need to have owners, not investors.