What do you expect for prices? I expect Reverse Check Mark Covid Price Action Pattern

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Ok Im sure Ill get lots of slack for this, but here goes. Goal is to get people talking. What do you expect??

Mark me down for smtg like this for covid price action when sales do start to come in (although vol will be uber light)
Phase 1 - destruction, first few months show how bad it got.
Phase 2 - normalize, after 2 months or so, we try to find a bottom
Phase 3 - bounce back from low, then gradual recovery

by this time next year, I would say we recover half the losses that ultimately reveal itself - i expect bottom to show in Aug, Sep timeframe and that can be off by a month or two but I think the shape will be the important thing..quick fall, find a bottom, quick minor rebound, normalize, then start to gradually recover.

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David Goldsmith

All Powerful Moderator
Staff member
My personal opinion is that you have way too much of a safety net to see it go down like that. There are lots of people who will need to sell but the market won't support their price needs. But they (and lots of others) are still in denial about how bag the market is. As long as the government is pushing forebearance (we haven't even really seen a big push for forgiveness forgiveness yet) we won't see anyone forced to actually face the music.

I don't see us seeing the final results of this for >2 years. We are just starting to see new developments fail (see my Haywood post). Those are going to take at least 2 years to unwind and unless they all get turned in rental projects: like 105 Duane St/Tribeca Tower which was built by DeMatteis to be a condo and after tapping out became one of Related's toe holds into NYC as a Rental. The event which sparked that market crash was Black Monday Oct. 19, 1987, the Real Estate market didn't really crack until 1990. The final unwind to rental wasn't figured out until the end of 1993:

But let's say it went the other way like 22 West 15th St, West 17th St and others which auctioned off individual units. The (low) prices tend to make the market. But again that occurs >2 years down the road. So far we're still seeing developers puffing out their chests and saying everything is fine.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Ah, I should have mentioned those are thoughts for RESALE. So sorry as that is a biggie. I do think new dev will be in its own world for a noticeable period of time. But for resale, I think there will be a big shock powered by: (i) no volume for 3 months so far and (ii) sellers hitting gap down bids to move property...that especially applies to sight unseen deals, which there are not many at all of. Only 400 listings or so went to contract since March 20.

I would not be surprised to see so few deals publish the monthly bars on UD of July, Aug, and Sept. Now, we need to wait until December to get Sept sales bar on UD, so Im saying by then, I think the bottom will be forming and it will be sharply lower than precovid levels. I believe I used a flat 20% to define the bottom month, which I have as Aug, meaning that bar publishes November on UD - 5.5 months away.

I do think the market will be under deflationary pressure for a while, offset by large fiscal/monetary stimulus around the globe. We just need to get showings started again and let buyers view property - i think the bottom will be the sight unseen deals, as few as those are.
 

David Goldsmith

All Powerful Moderator
Staff member
My personal opinion is that you have way too much of a safety net to see it go down like that. There are lots of people who will need to sell but the market won't support their price needs. But they (and lots of others) are still in denial about how bag the market is. As long as the government is pushing forebearance (we haven't even really seen a big push for forgiveness forgiveness yet) we won't see anyone forced to actually face the music.

I don't see us seeing the final results of this for >2 years. We are just starting to see new developments fail (see my Haywood post). Those are going to take at least 2 years to unwind and unless they all get turned in rental projects: like 105 Duane St/Tribeca Tower which was built by DeMatteis to be a condo and after tapping out became one of Related's toe holds into NYC as a Rental. The event which sparked that market crash was Black Monday Oct. 19, 1987, the Real Estate market didn't really crack until 1990. The final unwind to rental wasn't figured out until the end of 1993:

But let's say it went the other way like 22 West 15th St, West 17th St and others which auctioned off individual units. The (low) prices tend to make the market. But again that occurs >2 years down the road. So far we're still seeing developers puffing out their chests and saying everything is fine.
 

John Walkup

Talking Manhattan on UrbanDigs.com
This quote from David is spot on:
“I don't see us seeing the final results of this for >2 years. We are just starting to see new developments fail (see my Haywood post). Those are going to take at least 2 years to unwind and unless they all get turned in rental projects: like 105 Duane St/Tribeca Tower which was built by DeMatteis to be a condo and after tapping out became one of Related's toe holds into NYC as a Rental. The event which sparked that market crash was Black Monday Oct. 19, 1987, the Real Estate market didn't really crack until 1990. The final unwind to rental wasn't figured out until the end of 1993.”

Interesting to note that the city’s population was steadily growing from the 90s through to, well, now. If there’s a decline, the new dev game of musical chairs gets more and more punishing.
 
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