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April 13, 2009

Babs: 'Don't Ever Underestimate' New York

In her Daily News column on Friday, Barbara Corcoran busted out some major league cheerleading for the New York real estate market that was surprising even for her given the state of the economy and the downward momentum of apartment prices in the city:

All the financial mess here in New York City is really just a speed bump on the way to future riches. I’ve lived through real-estate markets a lot more hopeless than this one, and every time the city turned around and bounced back, taking real-estate values up with it. In 1974, I listed a 14-room, park-view apartment in the famous Dakota on Central Park West. The price the seller set was absolutely nothing! Zero! The owner was willing to literally give it away if I could only find some sucker to take over his monthly maintenance. I couldn’t find the sucker. That same apartment was sold five years ago for $18 million. New York City is a boom-bust-boom town, especially when it comes to real estate. Don’t ever underestimate its power to bounce back with bigger and better values.

Go, go, go!
Ask Barbara [NY Daily News via Curbed]

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"I’ve lived through real-estate markets a lot more hopeless than this one"

Uh....realy?

Perhaps there have been worse -RE markets- but I think the whole picture is far worse than its ever been. This is quite different than some octogenarian talking about surviving the Depression and how we'll survive this economic downturn.

How people can view the mess we're in as merely a RE market is at best naive and at worse, completely blind.

Posted by: Prodigal_Son at April 13, 2009 10:19 AM

What a great logic: "The price the seller set was absolutely nothing! Zero!"... Therefore, "Don’t ever underestimate its power to bounce back with bigger and better values"

This only tells us that, in theory, if the economic and cultural climate in NYC changes a lot, the RE prices in some areas can go to zero before bouncing back.

Posted by: Gravis at April 13, 2009 11:42 AM

"All the financial mess here in New York City is really just a speed bump on the way to future riches."

But NYC's got the sport package (lowered chassis, firm suspension, low profile tires and spoiler kit). WHAM!!! SCRAAAAAAAAAAPE!!! [sparks fly and smashed up body separates from chassis - total wreck, call Geico]

"I’ve lived through real-estate markets a lot more hopeless than this one, and every time the city turned around and bounced back, taking real-estate values up with it."

You're a liar, BABS. You haven't experienced the Great Depression.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 13, 2009 11:47 AM

"You're a liar, BABS. You haven't experienced the Great Depression"

Nor will anyone else these days, BHO. It's not going to repeat itself. Get a grip.

Posted by: daveinbedstuy at April 13, 2009 11:50 AM

She's right - in 2015.

Posted by: Suburbandude at April 13, 2009 11:52 AM

"Nor will anyone else these days, BHO. It's not going to repeat itself. Get a grip."

You're right. It'll surpass itself. Economic distress not seen since and worse, no manufacturing base. It'll take a war with China and their growing alliance with Russia to get us out of this one. Stop pressing snooze on your alarm clock. The dream is over.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 13, 2009 12:02 PM

They always trot out the conspiracy theories when their logic is attacked. Pathetic.

Posted by: daveinbedstuy at April 13, 2009 12:09 PM

of course Babs is right. why would anyone think otherwise.
we are not going to give up on making money. we are damn smart us americans in new york.

of course Obama's gov't will try to zap us with taxes and gross social programs where bureaucrats pocket all the money. but hopefully, he's toast in 4 years. imagine the democrats lose many seats in the next election in the legislature.

Posted by: wine lover at April 13, 2009 12:19 PM

Right, wine lover. It was those damn social programs that got us into this current mess!

Posted by: mopar at April 13, 2009 12:40 PM

I don't suppose her cheerleading could have anything to do with the fact that she's personally and heavily invested in the NYC Real Estate and bought quite a few properties from 05-07 in marginal neighborhoods including Red Hook and Bed Stuy. If she's so smart, why did she buy at the peak?

Posted by: Brooklynnative at April 13, 2009 12:46 PM

So let me get this right BHO....In order to somehow personally drive down prices with your web based fear mongering you are both advocating that new parks projects get canceled and cheerleading for a Third World War? You are completely off your rocker!

Posted by: wasder at April 13, 2009 12:47 PM

This is the same insufferable greedy bitch that told us to pave over our front gardens for parking pads to increase the value of our homes. For the first time in decades, hope is re-emerging that ordinary people like teachers, firemen, artists, editors, and non-profit workers could own their own homes in this city without mortgaging themselves into peril. This whole downturn is a CORRECTION, not a catastrophe, unless you're one of the folks unlucky enough to be attempting to unload a property at a still-more-bloated price than you paid for it. (I have as much sympathy as I do for folks who lose it all at Vegas--which is to say, a little sympathy, but no floods of tears.) "Cheerleading" for a return to greed-fueled speculation, flipping, overdevelopment and other insanity makes me want to puke. "Babs" can teach my grandmother to suck eggs; I hope house prices tumble another 20% and stay there where they belong for a good long while.

Posted by: Brenda from Flatbush at April 13, 2009 12:49 PM

Just as soon as those no-doc zero down sub-prime loans begin again everything will be peachy!

Posted by: williamsburgguy at April 13, 2009 12:50 PM

"For the first time in decades, hope is re-emerging that ordinary people like teachers, firemen, artists, editors, and non-profit workers could own their own homes in this city without mortgaging themselves into peril."

Huh? I'm pretty ordinary, and I bought a house in 2001. I know other "ordinary" editors (i.e., not wealthy) and artists who've bought homes either during that time, or since.

Posted by: East New York at April 13, 2009 1:09 PM

Babs is a very savvy businesswoman and putting this quote out there is a smart business move. This won't affect the market one bit, of course, but what it will do is give her tons of credibility when the market finally does recover (which might not be for a long time, but is bound to happen eventually). Remember, the real estate industry can spin data in almost any market to make it sound like a great time to buy. Let's say prices go down a total of 50% from the peak and then come back up 20%. The people who bought at the very bottom will have made out very well, and Babs can start putting out press releases about how prescient she was back in 2009, how she was a strong believer all along, how "see, people are always making money in real estate," etc etc. And of course she won't talk about all the people who bought in 2007 on her advice and lost their life savings. She won't talk about the lives that were derailed because she and her ilk lied through their teeth when values were completely insane and told people they had to buy right away or be priced out forever. No, those people will be forgotten and all she will talk about is what a visionary she was for supporting the market all along and how the people who finally had the guts to buy are getting rich (not the people who bought in 2009 and caught the falling knife, no, they will be forgotten too; only the people who hit the market just right). For all these reasons and so many more that I just can't take the time to write down, her quote nauseates me. But I have to admit it's a great business move. After all, what's her downside? The market never recovers at all from the bottom, wherever that might be? This quote is a guaranteed winner for her.

Posted by: lechacal at April 13, 2009 1:53 PM

And I agree with the observation that what her 1974 example really shows us is that, even in the great NYC, prices can actually go down to ZERO before they go back up. Again, she will only talk about the people who made money. She conveniently fails to mention the guy who bought it back in the 60s or whenever and ended up desperate to unload the place for nothing at all in a shitty market. Realtors will only ever talk about people who made money in real estate. But there are also plenty of people who have lost money over the years, and a lot of those were just following the advice of people like Babs. Is she offering an apology to the 32 year old recent parents who just lost their entire life savings on some new condo development in Manhattan after they read one of her quotes about how Manhattan is special, it's an island, gas prices will keep real estate there expensive, foreign money will save us all, etc etc etc? Nope. They are forgotten, because a disingenuous leech like this will never admit that most of what she has said in the past 5 years has been dead wrong and a lot of people have lost their life savings by following her advice.

Posted by: lechacal at April 13, 2009 2:05 PM

"if I could only find some sucker"... enough said, Babs.

Posted by: buttermilk channel at April 13, 2009 2:43 PM

dang! I would have taken that apartment off the seller's hands for nothing in 1974....then I'd have somewhere to park my crib.

Seriously, the ongoing maintenance costs where properties are empty is going to be a serious wakeup call for the condo market.

With rising unemployment, more and more people will either share or leave the city altogether, leaving behind a glut of empty apartments. It happened before, it's going to happen again.

Posted by: the chicken at April 13, 2009 3:38 PM

Don't believe her lies. Have you seen how many signs her group has posted in the same neighborhoods they gentrified and bubbled up the prices? Now she is just looking for more suckers to sell her Ikea homes to. It ain't gonna work. I will be glad to see her file for bankrupcy. The way the housing market is going it should not take long.

Posted by: hannible at April 13, 2009 7:36 PM

hannible, Babs sold the business but it still carries the Corcoran name.

Posted by: lechacal at April 13, 2009 9:12 PM

Hey you folks are being too hard on poor Babs; after all she is only doing her job right? Realize people to be very successful in her position a copious amount of er... deception is vital.
What a greedy liar this woman is!

Posted by: pierre de taille at April 13, 2009 9:35 PM

People please, everyone fleeing NY? Where are they going to go where there are more jobs? Detroit? Today Goldman Sachs said they were paying back Tarp funds cause it basically wasn't worth the strings attached. The best and the brightest will be here.

Posted by: bqe1970 at April 13, 2009 11:01 PM

So according to her bullshit story, she couldn't sell her first listing.

Posted by: Xander Crews at April 13, 2009 11:18 PM

bge1970, I take it your comment was aimed at what I wrote?

I didn't say people were fleeing NY - I said that unemployed people would have to either share apartments or move out of the city. As tenant-friendly as NY is, eventually you have to pay your bills.

Supply and demand of accommodation is finely in balance and it doesn't take much of a move in either direction to cause a big impact on pricing.

Posted by: the chicken at April 14, 2009 3:49 AM

This woman should be strung up. She could not have possibly witnessed a worse environment for housing simply because there hasn't been one this bad since the GD. I'm definitely a member of Team Bear, although I don't want to inflame people with hyperbole. We are nowhere near the end of this crisis and the cascading prices in metro NY are just a start. We don't have a manufacturing base and Wall Street is a smoking hole.

She is horribly irresponsible to be this bullish, especially given her vested interests. For what it's worth, I left metro NY and the USA about 7 months ago. I haven't a horse in the race there, but I sold a Manhattan co-op in early 06 and I thought that I might be too late then. Prices are going back to three times income. I just hope that we don't revisit the 1930s worldwide. I think that option is very much on the table.

Posted by: provocateur at April 14, 2009 5:16 AM

"In order to somehow personally drive down prices with your web based fear mongering you are both advocating that new parks projects get canceled and cheerleading for a Third World War?"

Just the parks, wasder, not the war. Please quote exactly where I cheerlead a war. As for the park, how 'bout affordable homes for families, who have already lived in the area for years and have saved to buy here, to let their kids run around the halls and backyards? I have money to burn on peak comps (why waste it?) but many of my peeps do not and until recently, they've been home shopping in LI and down south. But the slow but sure collapse is changing everything. Hallelujah!

"The market never recovers at all from the bottom, wherever that might be?"

Please explain, lechacal.

"a lot of people have lost their life savings by following her advice"

Good for them. If your that stupid and sheepish, you deserve what's coming. People need to take responsibility for their thought process. Mental laziness deserves distress.

"the ongoing maintenance costs where properties are empty is going to be a serious wakeup call for the condo market"

Absolutely. Co-ops too. Perpetual articles about rising costs. Downright scary.

"Hey you folks are being too hard on poor Babs; after all she is only doing her job right? Realize people to be very successful in her position a copious amount of er... deception is vital."

Very true. Respect her gangster.

"People please, everyone fleeing NY? Where are they going to go..."

The comfort of their parents home in Anytown, USA.

"The best and the brightest will be here."

Shaking martinis.

"As tenant-friendly as NY is, eventually you have to pay your bills.

Supply and demand of accommodation is finely in balance and it doesn't take much of a move in either direction to cause a big impact on pricing."

Ding ding ding!!!

And provocateur at April 14, 2009 5:16 AM is right on the money. The whole post.

Team Bear (Grrrrrrrrr!!!)

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 14, 2009 8:04 AM

"It'll take a war with China and their growing alliance with Russia to get us out of this one."

You are the only one taking an article about Barbara Corcoran and turning it into a discussion of war with China. Is this cheerleading? Who knows, but its fear mongering and ridiculous hyperbole in the mistaken hope that it will help you buy a house at a lower price. You are pathetic, and your attempts to justify your own greed with discussions of the plight of your "peeps" are disingenuous coming as they do in perhaps your millionth post and not before.

Posted by: wasder at April 14, 2009 9:26 AM

"Is this cheerleading? Who knows..."

YOU know that it is NOT, wasder.

"...its fear mongering and ridiculous hyperbole in the mistaken hope that it will help you buy a house at a lower price."

Greed mongering, fear mongering. Works both ways. Be a good sport.

Honestly, I'm out on a limb about this war theory but it is one of my fears and concerns. China is a rapidly developing country that the US will undoubtably see as a threat going forward given our economic fragility and dependence on them for debt. Just my general sense on how this depression will end. I'm a firm believer in the repetition of history.

"You are pathetic..."

For that insult, from now on, you are Aquaman.

"...and your attempts to justify your own greed with discussions of the plight of your 'peeps' are disingenuous coming as they do in perhaps your millionth post and not before."

How is buying a home at 3 times income, greed? How is price-fixing not greed?

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 14, 2009 12:55 PM

Be a good sport he says. I am, if nothing else, a good sport.

Your position is greedy because you have always said very clearly that your goal here is to drive housing prices down for your own benefit. Had you ever come on here and expressed any concern for anyone other than yourself your arguments would carry some more weight, had you ever told us about folks you knew who loved NYC but couldn't afford to buy here it would have provided a context that would make your position more sympathetic. But for you its always about the macho "we go hard" bullshit that makes you sound like an a**hole of the highest order. You have always been clear that you are looking out for your own bottom line (and don't tempt me to go reading your back posts for the proof). That is greedy.

I happen to believe that if the housing market were to collapse to the extent that you are hoping for it would mean a collapse of the very structures that make the neighborhoods we always discuss so nice. If that's the kind of world you want to live in, fine I guess. But I can tell you that it will be a pyrrhic victory for you and a big loss for everyone else. If you don't care then there's nothing I can do for you but again pray that your child sees the world in a more positive light than you do, cause you set a pretty miserable example.

Posted by: wasder at April 14, 2009 4:58 PM

And also, in re price fixing, who is price fixing? I had to deal with the same market as you when trying to buy a house. Do you think I wouldn't have rather spent less? Sure I would but I am not going to sit around pissing on everyone else when I have a family to raise and a life to live. I did the best I could in re finding something that fit spacially and price wise and I moved on with my life. Nobody on here, except maybe a lurking broker or two, has anything to do with price fixing.

Posted by: wasder at April 14, 2009 5:00 PM

I don't think that he's a bad guy. He's just tired of the bullish nonsense - and there had been a lot of it over the years. I've been a longtime lurker in this forum and a longtime bear, but people like me were laughed out of the room not so long ago. I'm not seeking to rub people's faces in it. I don't take pleasure in the misfortunes of others and I agree that a price collapse would be a pyrrhic victory in that the only place you'd want to be living (if even then) would be on some acreage somewhere with potable water. This is part of the reason that I think that prices will fall further than 50%. I gave a figure of 3 x income as a benchmark for prices. Income has been distorted in the boom and will fall, bringing prices even further down.

Posted by: provocateur at April 14, 2009 5:47 PM

Well, in response to provocateur, I can certainly sympathize with folks who have felt left out or ridiculed by pointing out that housing prices were in an unsustainable realm. I don't work in finance or have more than a rudimentary interest in or knowledge of markets. I understood last year that to buy a house in the current market I had to bite the bullet and pay more than I might have wanted to for a house. I didn't create the rules of the market or cheerlead for them. I simply participated in the city and market in which I happen to live. I object to people (like the unpleasant gentleman above) who use their blogging voice to advocate for the collapse of housing prices without a thought to what that might mean for the actual conditions of living. I don't have the time to cite every example of said unpleasant person's antisocial positions but certainly crowing about crumbling financing for parks projects is a typical example, along with the macho, faux-hip hop tough guy posturing. You just made a similar point without resorting to such cheap tactics and it just boggles my mind why the unpleasant one can't see that he would get more mileage out of his positions without such idiotic and hateful crap.

Posted by: wasder at April 15, 2009 1:24 AM

No wasder it is payback time for people like you who thought renters and people who did not want to buy two years ago were so stupid and scared. Then people like you started buying homes at overpriced values and started to raise rents until families and seniors got pushed out of their childhood neighborhoods. We have to drive miles for milk and bread because rents for stores has gone through the roof and stores need to make up costs. So you see your greed has affected people like me all over the city and we are bitter at people like you that don't get it.

Posted by: hannible at April 15, 2009 7:46 AM

Dude, hannible, don't know who you think you are talking to but I am nothing but a person trying to get by like anyone else in this crazy market. I bought a house on the very low end of the neighborhood where I wanted to live, I charge my tenants what is considered to be under market value rent, and I live in a way that is neighborly and community minded. I have never disparaged anyone for renting or called anyone stupid. I merely object to the attitude that you seem to agree with the unpleasant one about--that it is payback time and anyone who purchased a house in current market conditions is the devil himself. I am not a wall streeter, but a photographer. I have relatively modest income and I aspire to live in my house for many years, not turn it around for profit. So save your vitriol for someone more deserving please.

Posted by: wasder at April 15, 2009 1:22 PM

Let me get the picture. You have a modest income and you bought a multifamily home? Please do tell me how you calculated the numbers? Did you think costs and expenses were going to stay the same? Do you think home interest rates are going to stay at 4.5 percent for the next 40 years? I don't have a crystal ball but don't be surprised if we see 10 percent inflation soon.

Posted by: hannible at April 15, 2009 5:25 PM

Similarly I have no crystal ball but as I said I made the best choice I could for myself and my family and that is about the most all of us can do.

Posted by: wasder at April 16, 2009 9:46 AM

Then you have no bad karma to fear.

Posted by: hannible at April 16, 2009 12:25 PM

hannible - I too have a modest income but for a while now have been seeking to buy a home over $1mil - how? Previous RE transactions. Don't assume all home buyers - pre or post crash - are foolish. I feel for wasder - we could have been in same boat, but for the luck of not having found anything we liked pre-crash. I did think the writing was on the wall for a long time that prices had to go down, but also was actively looking before the crash. It was only after this fall that I realized how lucky we were to have NOT bought pre-crash and now of course we've gotten much pickier about price (since we're sure prices have further to fall). But you shouldn't paint with such a broad brush. Wasder is a nice, responsible guy!

Posted by: Miss Muffett at April 16, 2009 2:01 PM

« Cozy in Coney: Sitt and Recchia 423 Clinton Sells for Half Price »

April 13, 2009

Babs: 'Don't Ever Underestimate' New York

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