Halstead TV: Behind The Numbers
A: This is my company's new Market Report narrated by Halstead Chief Economist Greg Heym. Greg is very real, very in tune with the current situation, spoke to agents about a year ago about the challenges we face, and tells it like it is. Very refreshing I must say. Anyway, just wanted to pass this along, as I know they are working on enhancing this quarterly video report as we enter 2009. Enjoy.
While Greg discussed the raw data, it is important to understand that we are at now now. Greg mentioned the challenges NYC faces, and acknowledges the credit crisis that began just over a year ago. Its true that 'so far the data remains positive', but that is to be expected from lagging data. My own opinions on where we are now and likely trends looking ahead include:
There is nothing wrong with openly discussing what is going on in our market! Manhattan historically lags in recessions and leads in recoveries. Arguably, the national housing slowdown is in its 3rd year now and we are probably 8-12 months into our downturn with the severe knee-jerk adjustment lower occurring mostly in the past 8 weeks. Why? Buyers simply backed off. Local real estate is all about the buyers and Manhattan is no different. If a deal needs to get done, the seller has few options and time against them. Now is not the time for sellers to be anchored to peak prices!
This might surprise many, but I am a bit less bearish than I was 12 months ago when we were near peak levels and apartment sales were yet to catch up to deteriorating macro fundamentals. I know the worst is still to come for Manhattan, and I am still bearish, but when an illiquid housing market rolls over the initial adjustment is fast. Today, a noticeable adjustment has occurred and the pendulum has clearly swung in favor of buyers.
But who is buying? This is why I am still bearish. Consider me less bearish than I was 12 months ago, now that the downturn begun and prices are starting to correct; but still bearish for the next 3-4 quarters as job losses mount, distress rises, and negative wealth effect hits home. If it were a baseball game, I would say we are in the 2nd or 3rd inning; better than the pregame warmups right! The good news, we have to go through this. The bad news, we have to go through this. There is nothing I can do to stop it, so lets adapt to the changing world and act accordingly.