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June 8, 2009

Bob Shiller: 'Decline May Well Continue for Some Time'

Yale econ professor Robert Shiller had an op-ed in the Times this weekend that talked about why there's not necessarily an end in sight for the decline in the country's housing market. The piece examines why other declines have dragged out for years: "Despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline...Several factors can explain the snail-like behavior of the real estate market. An important one is that sales of existing homes are mainly by people who are planning to buy other homes. So even if sellers think that home prices are in decline, most have no reason to hurry because they are not really leaving the market. Furthermore, few homeowners consider exiting the housing market for purely speculative reasons. First, many owners don’t have a speculator’s sense of urgency. And they don’t like shifting from being owners to renters, a process entailing lifestyle changes that can take years to effect." He concludes: "Even if there is a quick end to the recession, the housing market’s poor performance may linger. After the last home price boom, which ended about the time of the 1990-91 recession, home prices did not start moving upward, even incrementally, until 1997."
Why Home Prices May Keep Falling [NY Times]

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Comments

I read this and thought: Why is this news? Why is this something anyone needs to be informed of? Is there are market less efficient than real estate? Isn't this blazingly obvious?

Posted by: northsloperenter at June 8, 2009 10:47 AM

Northslope--this was not "news" but rather an editorial. Yes, its obvious when you really stop and think about it that there are built in, systemic reasons why real estate is a less than efficient market organism but for me personally this was a well reasoned and well described column about why this is the case.

Posted by: wasder at June 8, 2009 10:55 AM

"I read this and thought: Why is this news? Why is this something anyone needs to be informed of? Is there are market less efficient than real estate? Isn't this blazingly obvious?"

ummm, to refute the the "bottom is in, green shoots" hype over at cnbc et al

Posted by: cornerbodega at June 8, 2009 11:27 AM

I think what many people are looking for is not necessarily prices moving upward but a stabilization. Realitive stabilized prices of several years is good thing. People are hesitant to buy because falling prices not stable prices.

Posted by: Petebklyn at June 8, 2009 11:32 AM

won't have "stabilization" until we get pre bubble = mid-late 90's pricing = Price vs incomes

Posted by: cornerbodega at June 8, 2009 11:38 AM

until prices go up, there's no urgency to buy cause risk of a drop is still there. with prices still so high, better to be safe than REALLY REALLY sorry

Posted by: more4less at June 8, 2009 11:48 AM

wasder -- you are correct, of course, with the editorial v. news distinction. In my defense, I'm sleep deprived and cranky...

Posted by: northsloperenter at June 8, 2009 11:54 AM

...unless we adhere to Dibs' line of thinking. He thought we were stable in dec08

Posted by: cornerbodega at June 8, 2009 11:55 AM

shiller is one of the most legit people commenting on this. he's a Yale economist, and is the same guy behind the case-shiller home price index -- so he's been looking into this for a long time. He was one of the first to call the dot-com bubble, and not just with some blog, with an entire book, "irrational exhuberance", which he then updated to correctly call the real estate bubble in 2004. fascinating book.

Posted by: joe_the_bummer at June 8, 2009 11:59 AM

I sort of agree that there is no reason in the world why prices should be higher today than say in the late 90's.
Is the economy better now? are there more big year-end bonuses? Is unemployement lower? No. No. And no. The bubble has popped and the underlying reality is that most people do not have a lot more moeny on hand than they did ten years ago.
Prices need to adjust down so things can start to sell again and we start seeing some real turnover. The tendency not to face reality is so typical of the NYC real estate scene. It is all based on hyperbole and snobbishness and fantasy in good times and now, when things have soured, the realtors nd their clients cannot let go of their delusions.

Posted by: sam at June 8, 2009 12:02 PM

I never said prices wouldn't fall, jackass. Brownstone Brooklyn will not fall 50-70% from the peak.

You need to start thinking about Plan B.

Posted by: daveinbedstuy at June 8, 2009 12:02 PM

dibs, how much have prices climbed in Brownstone Brooklyn since 2000? are such statistics available? It has to be over 100%.

Posted by: sam at June 8, 2009 12:06 PM

sam...the data may be available on the Prudential Douglas Elliman site where Mr. B posts the quarterly numbers.

I'm sure its over 100% in that timeframe.

I'll try and check that site.

Posted by: daveinbedstuy at June 8, 2009 12:09 PM

DIBS, a 50-70% drop would force you to change your ID to Daveinboerumhill

Posted by: more4less at June 8, 2009 12:10 PM

dibs,

I claimed when all said and done, Speculative Ghetto brooklyn will fall 50-70%. Yes your place falls in this category ;) Ever notice how Dibs in his delusional world groups his place with PRIME BK?

Posted by: cornerbodega at June 8, 2009 12:13 PM

Here's some composite data on Brooklyn from trulia:

http://www.trulia.com/real_estate/Brooklyn-New_York/market-trends/

Jan 2000 median price was $165k and prices peaked at $620k.

Posted by: daveinbedstuy at June 8, 2009 12:13 PM

I hope you don't live out your later years in a studio rental, bodega. That would be sad. Your SS check won't even go that far by then. Fool.

Its time you either added something to a conversation or got the hell out of here.

Posted by: daveinbedstuy at June 8, 2009 12:18 PM

holy cow dibs. 3.75X increase in 7 years? is that good data?

Posted by: joe_the_bummer at June 8, 2009 12:21 PM

It really was an enormous uptick in nine years. It would not be unreasonable to see a good chunk of that climb diappear, I mean, where will the money come from today?
Securities of all kinds are in the gutter. Municipalities are going bust. GM is now in covernemnt hands. I see no reason for optimism at the moment. I wish I felt otherwise.

Posted by: sam at June 8, 2009 12:23 PM

sorry dibs, bodega will be one of the homeless people living in the ORO for free. his entire monthly expense will be his internet connection, which he'll use to harrass you every day on brownstoner.

Posted by: joe_the_bummer at June 8, 2009 12:24 PM

dibs, enlighten us as to what you "add" besides delusional cheerleading?

Posted by: cornerbodega at June 8, 2009 12:26 PM

joe...he doesn't really harass me. I just find it incredible that there can be such a worthless, ignorant individual out there. Rather amusing were it not so sad actually.

Posted by: daveinbedstuy at June 8, 2009 12:32 PM

Schiller is smart guy and usually is pretty astute about the real estate market. But you also need to realize that his numbers for New York have almost nothing to do with New York City, let alone Brooklyn. Here's the list of cities that make up the New York metro area index numbers:

Fairfield CT, New Haven CT, Bergen NJ,
Essex NJ, Hudson NJ, Hunterdon NJ,
Mercer NJ, Middlesex NJ, Monmouth NJ,
Morris NJ, Ocean NJ, Passaic NJ, Somerset
NJ, Sussex NJ, Union NJ, Warren NJ,
Bronx NY, Dutchess NY, Kings NY,
Nassau NY, New York NY, Orange NY,
Putnam NY, Queens NY, Richmond NY,
Rockland NY, Suffolk NY, Westchester
NY, Pike PA

I'm not sure the price of a house in New Haven tells me much about condos on downtown Brooklyn.

Posted by: ralph gardens at June 8, 2009 12:36 PM

true that, ralph. it also doesn't include condos. the only argument you can make for it is that as long as people can move from one to the other without changing jobs, they are "substitute goods" and ought to respond to the economy in similar fashion -- but that's got some obvious weaknesses. curious to know how trulia compiles its data.

Posted by: joe_the_bummer at June 8, 2009 12:44 PM

Dibs is a financial professional and very knowledgable. I always take his opinions very seriously. He also has his cranky side though, and he doesn't suffer fools gladly as the saying goes.

Posted by: sam at June 8, 2009 12:44 PM

"...few homeowners consider exiting the housing market for purely speculative reasons...many owners don’t have a speculator’s sense of urgency...they don’t like shifting from being owners to renters, a process entailing lifestyle changes that can take years to effect."

If I fell for all the garbage (renting is throwing $ in the fireplace, etc.) that David Learah, NY Times RE, REBNY, et al, puts out there and bought out of fear that I'd be priced out and that RE only goes up (greed), I'd think the same way. But if homeowners knew the truth about this market, they would have been speculative and tried to take profits (that's what's slowly happening now since the music has stopped, capitulation). Now it's too late for most. Most homeowners follow the herd by definition whether selling or buying. The ones who are fortunate enough to keep their homes will still be kicking themselves for not cashing out the paper value they had (once-in-a-lifetime-cycle).

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 12:47 PM

BHO I totally agree -- if I were sitting on a brownstone for 10+ years after watching the price triple, I would be out the door faster than you can say "urban blight". Plus, I'd be able to sell it without paying cap gains tax, send my kids to Groton, and buy an entire county in Florida. Maybe I would have missed the peak by 15%, but shoot -- still basically won the lottery on it.

Posted by: joe_the_bummer at June 8, 2009 12:56 PM

Guys it's so over..

The What

Someday this war is gonna end..

Posted by: Return of The What at June 8, 2009 12:56 PM

"Schiller is smart guy and usually is pretty astute about the real estate market. But you also need to realize that his numbers for New York have almost nothing to do with New York City, let alone Brooklyn."

So the tripling of his NY index (+200%) and the tripling of NYC proper (yup, multi-fam brownstones/coops/condos all up +200%) from trough to peak was all one big random coincidence? Can you please explain the isolation of the NYC proper market from the rest of Tri-State? Don't Manhattan employees have the option to purchase housing in the five boroughs or Jersey or Upstate or Long Island. Don't their decisions affect the pool of qualified buyers in either market?

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 12:58 PM

BHO....NYC isn't really that "speculative" of a market. people don't buy things here as second homes (except maybe very wealthy Europeans). Most purchases in NYC are primary residences and selling your home and renting because you think the market is going down is not something a lot of people really care to do.

Anybody who bought in the early 200s or anytime before still has a nice profit, even at prices that have come off the peak.

Posted by: daveinbedstuy at June 8, 2009 1:00 PM

joe, why would you be exempt from cap gains tax????

Posted by: daveinbedstuy at June 8, 2009 1:06 PM

The only mistake I can cite on the part of Bobby Shilly is that a few months ago he illogically "told the people what they wanted to hear" by suggesting a price drop slow-down and possible rebound without addressing the data lag, teaser rate resets and tightening lending standards. Now he's quietly changing his position back to gloom and doom. I haven't completely confirmed my suspicion but this is my sense.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 1:07 PM

BHO leave these delusional Assholes alone! With the "Data" staring them in the face the Dumbasses are still incredulous!!!!!!

Cognitive dissonance

http://en.wikipedia.org/wiki/Cognitive_dissonance

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The "ideas" or "cognitions" in question may include attitudes and beliefs, and also the awareness of one's behavior.

See what I mean??!!! Leave them alone!

The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing their attitudes, beliefs, and behaviors.

At this fucking point the Mutant Asset Bubble is DEAD but the Assheads find something to "Hold on" to! Any piece of bullshit or the denial of a appraisal report is self-reinforcing nonsence.

You have T-Minus 5 months retards....

The What

Someday this war is gonna end....

Posted by: Return of The What at June 8, 2009 1:11 PM

I'm a homeowner looking to sell to rent to wait out mkt but freaking problem is rent is still pretty expensive. If these rents I'm seeing has dropped alot then rent might've been ridiculous before the correction

Posted by: more4less at June 8, 2009 1:15 PM

NYC isn't really that 'speculative' of a market. people don't buy things here as second homes"

Not anymore. But they did. An apartment in your brownstone is essentially a second or third home.

"selling your home and renting because you think the market is going down is not something a lot of people really care to do."

By definition, smart money is not a lot of people.

"Anybody who bought in the early 200s or anytime before still has a nice profit, even at prices that have come off the peak."

If you ignore refi's and over-the-top renovations.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 1:16 PM

"If I fell for all the garbage (renting is throwing $ in the fireplace, etc.) that David Learah, NY Times RE, REBNY, et al, puts out there..."

Its too easy to ascribe motives to buyers like that BHO and is the weak link in your analysis of the situation. As Joe the Bummer says if you were in the situation of sitting on a house for more than ten years previous to the bubble its an easy call to sell and cash in. But most people here are not in such a clear cut position and as much as you want to believe that people are stupid cows following the above listed sources over their own best judgment, many intelligent people looked into their own circumstances and bought a house as a place to live and to be the rock of their lives. These people will all have their own reasons and needs to get out when they do and they will not line up to some kind of pre-ordained market condition (something that Shiller points out eloquently). Trying to take the personal factors out of the decision is pointless.

Posted by: wasder at June 8, 2009 1:17 PM

m4l...how much longer are you going to wait to sell???

Posted by: daveinbedstuy at June 8, 2009 1:18 PM

BHO, contrary to your line of thinking, not everyone took money out with a refi. I will reiterate: Anyone who bought in the early 2000s or earlier still has a hefty profit.
If you plan on denying that you need to prove why its wrong.

Posted by: daveinbedstuy at June 8, 2009 1:21 PM

"selling your home and renting because you think the market is going down is not something a lot of people really care to do.

By definition, smart money is not a lot of people."

Who is "smarter"? The person who decides to sell their home and rent elsewhere (with the hassles and dislocation that this entails, especially with kids) or the person who decides that a house is a lot more than a financial bottom line? The answer is it depends on the person and the circumstances, a nuanced answer I know.

As always, I take issue not with the actual position you are putting out there for yourself but with the extrapolation that its the only smart or reasonable move for anyone.

Posted by: wasder at June 8, 2009 1:25 PM

DIBS, will sell when I see a compelling rental. right now, anything decent or comparable to what I have now is around 2.5x or more than my current carrying cost. Right now, the place is a hedge in case mkt doesn't tank and moves up.

Posted by: more4less at June 8, 2009 1:29 PM

Agree, wasder. Being single, it would be far less of a hassle for me to rent than for a family. I chose to take my profits in manhattan and go for the deep value in Brooklyn, specifically the real deep value in Bed Stuy. I'm sure I'm about $200k underwater but I don't really care. I've got a beautiful large house with a yard and a deck and I continue to put more money into it. Some of these people don't understand that.

Besides, one of the motivations to do that transaction in 2007 was the fact that cap gains taxes were probably the lowest they would ever be and most of us in the investment business realized that. It sdid actually drive a lot of decisions to liquidate long held stock in our clients portfolios.

Posted by: daveinbedstuy at June 8, 2009 1:31 PM

"BHO leave these delusional Assholes alone!"

They have to be corrected. I'm looking out for the innocent bystanders that might gobble up the garbage.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 1:32 PM

DIBS, you cant say you're 200k under water when you effectively traded in a massively profitable UES unit.

Posted by: more4less at June 8, 2009 1:36 PM

Yes, m4l, BHO and the others think every homeowner is mortgaged to the hilt. Many of us have carrying costs much less than what a comparable square footage would rent for.

My carrying cost is far less than what a nice 2 bedroom with a yard would run

Posted by: daveinbedstuy at June 8, 2009 1:37 PM

dibs -- I meant that you don't pay a capital gains tax on the price appreciation on your first primary residence -- that's still true, right?

more4less -- I think you have to look forward a few years -- if rents and prices are both falling, then pulling the trigger and selling now helps you on both sides of the equation, b/c you pay lower rent later. Plus, depending on your sitch, you might be facing property tax increases because of the lag in applying the higher assessments of the last few years.

Posted by: joe_the_bummer at June 8, 2009 1:54 PM

I am going to sell my house. The bottom feeders tell me this is what I should do, so I will do it.

To save money and maximize my gain on the sale of my property, I will live like a homeless person on the street and avoid rent. I will push my worldly belongings around in a cart. My family and I will live together in a cardboard box.

I will spend the next several years making low-ball bids on housing and be out bid by other buyers or ignored by sellers who are not as desperate I think they should be.

Real estate prices always go down.

Posted by: ghettoazzpnkbtch at June 8, 2009 1:58 PM

"BHO, contrary to your line of thinking, not everyone took money out with a refi. I will reiterate: Anyone who bought in the early 2000s or earlier still has a hefty profit.
If you plan on denying that you need to prove why its wrong."

Didn't say everybody. Just suggested many. Your statement is too absolute. The proof would be in the pre-foreclosure numbers (bonafide foreclosure numbers already getting worse). I'm still waiting for someone to present that trend. Refi's have gotten a lot of outright owners in trouble.

"Who is 'smarter'?"

Don't take it personally, wasder. I'm talking about asset bubbles. Few get rich (they call them 'smart' money) and most lose their shirts (they call them 'dumb' money). It's unfortunate that homes had to get speculated on but that's what happened.

"...anything decent or comparable to what I have now is around 2.5x or more than my current carrying cost."

Are you adding/subtracting the loss/gain between sale and resale spread out over the total months of ownership including all maintenance costs, fees, insurance, taxes etc.? Details please? I'm having a difficult time believing that you'd be paying more to rent considering the opportunity cost of not cashing out near peak during an era of falling rents (which by the way intensifies the loss in owning intensifies the gain in renting/waiting).

"Right now, the place is a hedge in case mkt doesn't tank and moves up."

But the banks are betting against you. Sell/rent/buy hedges against a market tank, the likely outcome.

"I'm sure I'm about $200k underwater but I don't really care. I've got a beautiful large house with a yard and a deck and I continue to put more money into it. Some of these people don't understand that."

We understand it quite clearly. Strictly from a financial perspective, you're behind and you're falling even more behind. But who buys a Lamborghini Diablo to make money? Rock out!

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 1:58 PM

dibs, why don't you put that cash to work? if you're a hedge fund guy, you must know of something that's going up, and yet you're staying under-leveraged and letting your cash rot in your dank brownstone basement. rates are low, lever up!

Posted by: joe_the_bummer at June 8, 2009 2:01 PM

BHO, easy explanation - NO mortgage. I think prices will continue to drip drip drip so selling is probably best decision. but given rent is still so freaking high, the urgency to sell & rent is not as compelling as I was expecting. small silver lining to holding the place is it is a hedge against small odds mkt has stabilize and move up. As a member of team reasonable, I track & consider all the scenarios

Posted by: more4less at June 8, 2009 2:05 PM

"Many of us have carrying costs much less than what a comparable square footage would rent for."

Please stop insulting my intelligence! Rentals don't require 20% down, losses between sale and resale, maintenance costs, taxes, insurance, water bills, sewer repairs, boiler replacements, etc. These costs are playing hide and go seek with today's home shopper.

"dibs -- I meant that you don't pay a capital gains tax on the price appreciation on your first primary residence -- that's still true, right?"

Only if you re-buy within a year, joe. We were discussing sell-rent-buy. Gains tax non-applicable. You're spot on about rising assessments. The lag does not favor the owner. It favors the future buyer.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 2:06 PM

Opportunity cost, M4L. It's a cost in dollars and cents. You have to add it to the loss column when comparing sell-rent-buy to holding. And NO mortgage does not mean you got the house for free. You (or someone for you) paid money. You have to subtract that from resale. The result is not positive for every outright homeowner.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 2:12 PM

Correction, joe: "Gains tax [waive] non-applicable."

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 2:13 PM

BHO, I'm not preaching, convincing others to do anything. I'm just glad my chicken little approach is panning out big time. suspicious of stk mkt, paid off mortgage instead,... helped me avoid skt mkt collapse, no mortgage, and basically monitoring mkt to make next move.

Posted by: more4less at June 8, 2009 2:14 PM

BHO, I consider myself to be LUCKY vs SMARTER than others. I'll take LUCK any day over SMARTS

Posted by: more4less at June 8, 2009 2:16 PM

the carry cost argument doesn't hold any water. it just reflects your financing position, and you're ignorning the opportunity cost of foregone investments. you need to look at the total round-trip after all costs, like BHO says.

I didn't see the original "hedge" line, but if you're really holding a house as a hedge, it means you are naturally short real estate, which is not normal. perhaps the poster means something else.

the lambo argument is great -- if you own it because you love it, just ignore all this chatter and focus on stuff like getting your front door up to the landmarks code!

Posted by: joe_the_bummer at June 8, 2009 2:16 PM

j bummer, my "hedge" reference is for in case my prediction of mkt continuing to go down is incorrect and instead it goes up, the fact I still own an apt unit means I get to partake in the upswing (albeit I don't believe it). So it's a hedge against me being wrong on my read of the mkt

Posted by: more4less at June 8, 2009 2:19 PM

m4l -- ok, I suppose I am being too wonkish -- in finance terms your basic position can't be it's own hedge, but I see what you mean.

BHO so what's the final final -- I didn't understand your post. If I sell my first home and go rent permanently, do I pay tax on the gain?

Posted by: joe_the_bummer at June 8, 2009 2:25 PM

j bummer, unless rules changed recently, no cap gains (250k per person or $500k for married couple) on primary residence where you live 2 yrs (during a 5 yr time frame)

Posted by: more4less at June 8, 2009 2:31 PM

Joe, exemption for single taxpayer is $250K, $500K if married. Anything above is taxed. Currently long term cap gains rate(assets held longer than 2 years) is 15%.

With all this run away gov't spending, the capital gains rate will definitely being going up soon. At the very minimum to the pre-Bush level of 20% and more likely 35% once the Dems get their way.

Posted by: Colonel Steve Austin at June 8, 2009 2:32 PM

> "exemption for single taxpayer is $250K, $500K if married.
> Anything above is taxed."

The Colonel is correct.

Posted by: SnarkSlope at June 8, 2009 2:35 PM

> "With all this run away gov't spending"

Thank Heaven there was none of that during Shrub's tenure.

Posted by: SnarkSlope at June 8, 2009 2:36 PM

I'm not sure if that exemption still exists for the first time home. ALL others pay tax with the $250k/500k deduction as the others have indicated.

Posted by: daveinbedstuy at June 8, 2009 2:38 PM

thanks folks -- I didn't realize that only the first 250/500K of gain was exempt. that's got to be a huge big factor in the brownstone market, don't you think? Long-timers are sitting on 7-figure gains, and would have to pay a six-figure tax bill if they sold now. If the home represents the bulk of their assets, and they have the alternative of leaving it to their kids (taking advantage of higher estate tax exemptions), there is a really good reason not to sell.

maybe one for team bull there.

Posted by: joe_the_bummer at June 8, 2009 2:43 PM

"BHO so what's the final final..."

I understood you avoided gains tax if you bought again within a year but I'm not certain.

***Bid half off peak comps***

Posted by: Brownstones Half Off at June 8, 2009 2:53 PM

Not anymore, BHO.

Posted by: daveinbedstuy at June 8, 2009 2:57 PM

this one's good & supports the colonel:

http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

On estate tax: http://wills.about.com/od/understandingestatetaxes/a/taxliability.htm

So, on a really quick read, it looks like the first 3.5MM is exempt? Then that's a huge big deal for brownstoners. You're supposed to keep that brownie in the family.

BHO what do you make of that?

Posted by: joe_the_bummer at June 8, 2009 3:10 PM

Joe, just as the capital gains rate will go up, the estate tax exemptions are going to go back down.

Currently the estate threshold is $3.5 million for 2009, with a tax rate of 45%. In 2010, the tax cut will be repealed and in 2011 they go back down to $1 million, taxed at 50%.

So those brownstone owners sitting on a million plus hoping to pass it down tax free are in for a rude awakening.

Posted by: Colonel Steve Austin at June 8, 2009 3:18 PM

OK, so say I'm a retirement-age owner living in my stone for 20 years. property taxes capped at laughably low rates. rental income from the garden apartment. probably net positive carry. I can sell now and write a 6-figure check to a broker and another 6-figure check to the IRS, or I can lord it over my lazy kids to get them to keep coming home for my birthday. total no-brainer.

Posted by: joe_the_bummer at June 8, 2009 3:23 PM

colonel, thanks -- we crossed posts. ok, I got too excited for the bulls. So a 3MM stone would cause a 1MM estate tax, assuming no other assets. zoiks. better to sell it.

"after further review, offsides, team bull. no score"

Posted by: joe_the_bummer at June 8, 2009 3:29 PM

j bummer, bears are ordering steak now

Posted by: more4less at June 8, 2009 3:37 PM

President Obama is thinking of perhaps financing his new national health initiative by taxing the rich.
You hear that all you brownstone-owning millionaires?
An asset (such as a house in Park Slope) worth well over a million dollars makes you a very wealthy person in most of the United States.

Posted by: sam at June 8, 2009 3:43 PM

OK, sorry. I just need to take a break. once you sell it, you have cash which would also be subject to estate tax. so it's not simply "better to sell it". but still not the freebie that it looked like for a minute.

Posted by: joe_the_bummer at June 8, 2009 3:45 PM

Ohhhhbodega....read down....ever heard of paul Krugman????

Nobel Laureate Krugman Says Recession May End ‘This Summer’

June 8 (Bloomberg) -- The U.S. economy probably will emerge from the recession by September, Nobel Prize-winning economist Paul Krugman said.
“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.”

"“Things seem to be getting worse more slowly."...that's what's meant by first derivative. Learn something, fool

Posted by: daveinbedstuy at June 8, 2009 3:49 PM

daveinbedstuy : Thanks for posting that.
If Krugman who is a big bear is saying things look brighter than the bears on this site are finished.

Posted by: sebb at June 8, 2009 4:01 PM

sebb...when Roubini says it, and he will, these fools will be all over themselves buying in the market.

Posted by: daveinbedstuy at June 8, 2009 4:05 PM

great news! sebb, can you show me a three bedroom near the park?

Posted by: joe_the_bummer at June 8, 2009 4:11 PM

DIBS, that might be true with stk mkt but still not buying it for real estate. When prices go up, then it's victory for team bull. until then, it's TBD (bear in the lead)

Posted by: more4less at June 8, 2009 4:12 PM

Its a victory for members of team Bull like me as long as prices of brownstones don't go down more than 20% or so. They are not going down 50-70% and that's why Team bear loses.

Posted by: daveinbedstuy at June 8, 2009 4:16 PM

aren't we in the middle of comments about an article saying that price declines can drag on long past an economic recovery?

Posted by: joe_the_bummer at June 8, 2009 4:17 PM

I think Paul Krugman is certifiably insane. He even looks insane.
His schtick is entirely political. That's why he got the Nobel. He fundamentally dislies the United States and its institutions. He much prefers the way the French or the Swedes do business. He used to like the Japanese back when everyone thought they had all the answers.
He does save me a lot of time in the mornings though because his columns are so repetitive, I find reading one or two a year is plenty.

Posted by: sam at June 8, 2009 4:18 PM

I didn't know that you also won a Nobel Prize, sam. :)

Joe....the point is that we are seeing more and more differing viewpoints. Not everyone is saying things will worsen and indeed the data is certainly "less worse" that's why the stock market, THE BEST LEADING INDICATOR, has rallied so much.

Posted by: daveinbedstuy at June 8, 2009 4:23 PM

Where does Krugman say real estate is at a bottom? T2 partners recently released a report of the next waves of mortgage meltdowns coming to a neighborhood near you: 1) Prime Loans 2)Jumbo Prime. Hmmm, I wonder which 'hoods this affects most? In any case, until the price vs income ratio comes in line with the history of this city then its all delusion. Even the boys at GS say we need to party likes its 1999

Posted by: cornerbodega at June 8, 2009 4:31 PM

DIBS, I won a lot of QOTD's back when that semi-prestigious award was being handed out but I have never been the gloomy sort of anti-capitaliist the Norwegians seem to prefer for their Nobels.
There is something about Krugman that is deeply irritating. It's not just that he seems to be always mistaken, it's that he is mistaken in such an annoying way. He has been predicting collapse of the American economy since 1997, finally when a downturn actually hits he is hailed as a genius. Gimme a break!

Posted by: sam at June 8, 2009 4:41 PM

« The Great Landmarking Debate Rages On Dose of Reality for Trust Fund Kids »

June 8, 2009

Bob Shiller: 'Decline May Well Continue for Some Time'

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