Fed's Beige Book: Manhattan Remains 'Sluggish'
A: From our dear all knowing Fed; the same fed that said subprime mortgage risk was contained in early 2007. You know my thoughts on our local market; and I work here!
From The Fed's Beige Book (Second District - New York District):
Manhattan's housing market remains sluggish, though there are signs of stabilization, especially in the rental market. Co-op and condo sales transactions were reported to have doubled in the first quarter from the depressed levels of a year earlier but were still down modestly from the 4th quarter of 2009. Prices were also down modestly for the quarter and continued to run roughly 20 percent below a year earlier, with milder declines on studio and 1-bedroom apartments but steeper price drops on larger units. Manhattan's apartment rental market showed further signs of stabilizing in March: rents edged up and were down just 1½ percent from a year earlier, though vacancy rates rose modestly.What are the buyers or other brokers out there seeing?
Posted by prospectbuyer10
Thu Apr 15th, 2010 03:24 PM
From a shopper-hoping-to-be buyer standpoint, I feel like it has stabilized but there is great value. I have been able to compare properties at price points and still see them on the market after doing comparisons. I find that the majority of serious buyers list at their absolute lowest price and there is no room to negotiate which has a flip side psychologically. If you are a buyer wanting to negotiate there is little or no room on the properties listed by serious sellers and as a buyer that is a mental adjustment. I have found myself going, oh, what is wrong with it and psyching myself out. I don't think the word is sluggish, I think it's a reasonable and fair market in contrast to other markets we've seen for Manhattan. I see the greatest value in co-ops, you get the best space for the buck even if the maintenance fee is higher, I find it a better trade than for a condo with high closing fees and maybe lower maintenance because condo spaces are just so much smaller. The real estate agents I've met have been fair too, most say, look it's busy but there isn't rapid price appreciation at the moment so I don't have to rush. This is just my small experience in this market place. I do feel pressure that I am placing on myself to find the right place though because I don't think this opportunity will last past 2010 and I think most of the buyers I've met at open houses feel this same sense of urgency. Hopefully the price appreciation won't get ahead of us pulling the trigger. But I think it's kind of a wonderful market for buyers, until it isn't and that day will come, it always does in Manhattan. Wall Street has stabilized and so real estate is right around the corner!
Posted by sal
Thu Apr 15th, 2010 03:32 PM
prospectbuyer10 = broker
Posted by SteveF
Thu Apr 15th, 2010 03:38 PM
prospectbuyer10...very reasonable summation. Thanks!
Posted by anon
Thu Apr 15th, 2010 05:06 PM
Hilarious - sal, so spot on.
The guy should've just said "buy now or be priced out forever".
Posted by anonandsalareidiots
Thu Apr 15th, 2010 09:25 PM
spot on nothing, it's just ridiculous that people who can't buy, have no intention to buy and only want to rent are on a blog that is supposed to benefit those who want to buy. honestly, it's pathetic, get a hobby really and leave those interested in buying to do the research where there is some value add from others who want to buy versus renters who never will for whatever reason but most likely because they cannot afford to. if you had all the money in the world, and you're here saying not to buy, you're a liar.
Posted by anon
Thu Apr 15th, 2010 10:42 PM
Flmao. Why would someone who is "looking to buy" resort to calling renters names???
I'm no detective, but sounds suspiciously like another dumb-as-rocks broker or owner (SteveF?) posing as the ole frustrated "wanna-be buyer."
Seen em once, seen em a million times.
Posted by Noah
Fri Apr 16th, 2010 07:51 AM
well if I had the funds, and the stability in my income, I would DEF have bought a home I can grow into and planned to live in for next 7+ years in the past 5-7 months. No doubt. But I dont so I didnt and will continue to save to be in a position to do so in the future. For me and my family, renting makes more sense. There were at least a few properties I would have loved to call home I saw in past 4-5 months
Posted by Fred
Fri Apr 16th, 2010 09:28 AM
It amazes me that just because someone isn't touting the market as a great buy that they must somehow be unable to afford it. It kind of sounds like those momma jokes that get slapped around in grammar school. It's kind of a stupid way to defend this so-called benefit of home ownership when in reality a home needs to be not only functional, but affordable. What use is a piece of real estate if the carrying cost eats up most of your cash flow?
Here's a little factoid: The median income in the 10023 zip code is about 180k. At prevailing FNM rates, you could finance about 570k in mortgage. In order to buy 1,000 SF, you'd have to pony up about 400k or more in equity. Pre-crisis you could done the same deal with 100k. The perma-bulls miss the point that the strength of the buyer pipeline is much weaker than anyone wants to admit. You don't have an expanding eligible pool of buyers - it is shrinking.
Credit market spreads are however coming in and i imagine we're going to see more jumbo financing and general availability of credit BUT we are not going back to the 10% down, interest only days. The underwriting standards are much much more conservative.
Re: Wall Street, whoever said that it has stabilized is smokin' dope. Your BAC may have quintupled off the bottom but that does not mean BAC is hiring highly compensated employees. What hiring is going on is middle of the pack, back office and ex-NYC.
Posted by Thisson
Fri Apr 16th, 2010 10:33 AM
Fred: housing is overpriced here in Manhattan for homes that anyone outside of the top 1% of earners would purchase. 180k median income for 10023 but what is the median home price? It is a huge multiple of that.
Meredith Whitney is calling for a double dip down in real estate, stating that Mortgage nonpayment accruals have doubled since last year:
http://www.youtube.com/watch?v=ElGgj4BKd_s
Posted by anonagain
Fri Apr 16th, 2010 12:29 PM
meredith whitney is a jackass and doesn't know what she's talking about ever. spare me.
Posted by Penny
Sat Apr 17th, 2010 11:24 AM
Robert Shiller who developed the Case-Shiller index of housing is giving an interview on bloomberg radio on Tuesday.
(I think it comes on at 11:00 a.m. in the "On the Economy" hour hosted by Tom Kenan.
I have a sense of what he's going to say since his recent editorial in NYTimes warned not to bet the farm on housing since we're not out of the woods yet.
I've been going to open houses and I'm looking at two properties this weekend in Washington Heights.
Frankly I don't see the value. The space is better priced than some areas but it should be priced even lower (just my opinion) because the neighborhood lacks charm, shopping etc.
I'm thinking that the Goldman scandal if it leads to stronger regulation of the financial industry will be a cloud over the housing market in NYC, too. When the million dollar bonuses become a rarity it's got to have spill over effects on housing.
Posted by BULL WITH HORNS
Sat Apr 17th, 2010 01:34 PM
I do not know what you are smoking fred but I am getting back $8000 from Uncle Sam because I own...
So if you cannot afford to own as #1 said, just say so...but spare us the b/s....
Posted by Fred
Sun Apr 18th, 2010 11:19 AM
BULL%^IT WITH HORNS - If it costs you $20k to get back $8k, you are still in the hole $16k. So what's the point - you are really good with cognitive dissonance? Oh, I know, posting on anonymous blogs about how superior you are because you (allegedly) own a - drum roll please - studio apartment in Manhattan makes up for the FV loss on your equity. It's kind of funny getting harassed by low end buyers in Manhattan who think a Federally subsidized price point is a sign of stability & health, yet ignore the size of the overhang waiting to crush them once banks start foreclosure on all that zombie inventory sitting out there.....
Posted by anonymous
Sun Apr 18th, 2010 11:43 AM
that's some math :)
Posted by rlmnyc
Mon Apr 19th, 2010 10:07 AM
Went to two open houses on the UWS this weekend; one was clearly overpriced by 100K+ and has been languishing for weeks, while the other was priced spot-on the first day and has likely received multiple bids at and over ask. As many have said, it's all about the pricing. Had an extended conversation with the seller's broker at the first apartment, and we agreed that inventory is severely limited; any property that's half-decent and reasonably priced is flying off the shelves. As content renters, we're not going to panic and overspend for a disappointing apartment. We'll sit patiently and wait, as I do believe inventory's going to rise.
Posted by Penny
Mon Apr 19th, 2010 12:53 PM
I just heard it again. Robert Shiller will speak on the housing market at 9:00 a.m. on Bloomberg Radio (1130 am)
I hope he touches on the NYC market. I know he had a very negative piece on it in New York Observer back in 2007, I think.
Posted by BULL WITH HUGE HORNS
Mon Apr 19th, 2010 03:52 PM
fred, your assumptions are impossible to follow:
where should I start:
-your math calculations, taken out of your a*s?
-the studio apartment? (who knew, I own a studio apartment! is this an insult when you are still a renter?)
-the banks that will start foreclosures? (it seems that you can now predict the future!)
You commie, you would really love to see the economy getting crashed - sorry to break it to you, it will never happen....go back to USSR fred... You are an anti - American piece of sh*t....
Posted by Somewhere Else
Tue Apr 20th, 2010 06:30 PM
btw, this is the same Fed that called the market crash when most of the folks in town we're saying real estate would go up...
Posted by Somewhere Else
Tue Apr 20th, 2010 06:32 PM
"BULL%^IT WITH HORNS - If it costs you $20k to get back $8k, you are still in the hole $16k. So what's the point - you are really good with cognitive dissonance?"
Ha.
Bulls are funny.
Posted by coach handbags
Thu Aug 12th, 2010 10:07 PM
wrong with it and psyching myself out. I don't think the word is sluggish, I think it's a reasonable and fair market in contrast to other markets we've seen for Manhattan. I see the greatest value in co-ops, you get the best space for the buck even if the maintenance fee is higher, I find it a better trade than for a condo with high closing fees and maybe lower maintenance because condo spaces are just so much smaller. The real estate agents I've met have been fair too, most