How much NYC will revert to the mean is, in my book, the $64,000 question. How much does the geography of the city mess with that 4x multiplier? How does the decapitation of the wealth creation industry in NY (Wall Street) exacerbate the decline in housing prices that needed to happen anyway.
One can imagine a model in NYC that sees dramatic further price erosion.

Full disclosure: reversion to something like 4x income would be very, very good for me, so that obviously colors my thinking.

Posted by: 2br_or_bust at February 23, 2009 10:28 AM in response to NYC Real Estate Market 'Most Challenged'

ditto-

Her first album sold 22.5 million copies. At 15 bucks per, that's approx 330 million bucks gross for her to draw her 10% from. Her second album sold about 13 million copies.

Add to that 11217 point that touring provide's the lion's share of musicians' bottom line, well you get the idea.

Long story short, 4 million is chump change for her.

Posted by: 2br_or_bust at February 17, 2009 3:29 PM in response to Last Week's Biggest Sales

What a weird group of sales. Does certainly look like some ammo for Team Bull. I'd discount the Norah Jones house just since insanely rich musicians aren't really notorious for making considered real estate decisions and the Gravesend listing went into contract so long ago. With what's left, the 21 Lincoln place listing seems like a sign of real strength, though an all-cash deal doesn't reflect the current difficulty of getting financing and unemployment concerns.

576 4th, though, is close to 20% below ask off of the August list.

I wonder if a "Last Week's Median Sales" would be more representative of the market; the movements of the high end seem so dependent on unique buyers than anything else.

Posted by: 2br_or_bust at February 17, 2009 2:48 PM in response to Last Week's Biggest Sales

lechacal-

I'm beginning to think the same thing about Lehman. I think there is some desire we have for things to unfold, whether they be for good or ill, quickly. If the sh*t is really going to hit the fan, I think most of us would prefer that to the sort of slow burn that seems to be happening in NYC real estate. At least that would give some clarity to the situation and make us feel like we could make decisions with some confidence. Or maybe that's just me.

Posted by: 2br_or_bust at February 13, 2009 2:23 PM in response to Open House Picks: Six Months Later

Fairness is usually the first casualty in crisis. No it's not fair that folks who lived within their means won't get help in this situation. But the goal here is not fairness--it's avoiding disaster.

I don't really know if this plan is the best choices, but from what I can tell, any and all proposals will have to be unfair to be sufficiently potent and widespread to have an impact on the overall economy.

Posted by: 2br_or_bust at February 13, 2009 10:46 AM in response to Housing Rescue Plan: For Some or For All?

Putting the relative merits of subsidizing mortgages to the side for the moment, this is an amazing indicator of how bad the economy really is.

No one has a good solution how to fix the housing mess. If you let it die a "natural" death as some would like, then you put the possibility of a total market collapse back on the table.

If you artificially prop up the market, then you end up spending unheard of amounts of money with no clear end to the hemorrhage in sight.

That something like having the government step in to help pay mortgages is even on the table, even if it never happens, shows just what a god-awful mess this thing is. And that might be giving god-awful messes a bad name.

Posted by: 2br_or_bust at February 13, 2009 10:15 AM in response to Housing Rescue Plan: For Some or For All?

Mopar-

Yea, I don't think anyone has a grasp of the actual closing prices.

And if you're going to offer some speculation, I will too: the price decline in NY will be slow and orderly over the next year and a half and then flat to slightly up for the next couple of years. From today, median psf decline of 15-20% in Brooklyn prime.

Posted by: 2br_or_bust at February 11, 2009 5:42 PM in response to House of the Day: 599 5th Street

Just a side note: you know it's bad when people thinking another 10-15% slide are thought of as "bullish".

If this place, which is cherry in my view, does go for 20% or more below this price, it'll portend ill.

Posted by: 2br_or_bust at February 11, 2009 3:27 PM in response to House of the Day: 599 5th Street

So Dave would you say anything over 2.2 is a good sign? Below what number on the down side would you be surprised?

My thinking is that 2.2 is a "tread water" point on this one...

Posted by: 2br_or_bust at February 11, 2009 2:36 PM in response to House of the Day: 599 5th Street

Becky-
Dave won't be right if it goes for 2 mil. That's 20% off ask.

I agree this will be a good test case. Very little we'll be able to point to as explaining away the eventual sell price for bulls or bears.

Posted by: 2br_or_bust at February 11, 2009 1:40 PM in response to House of the Day: 599 5th Street

This reminds me....anyone know anything about 360 Court? Seems like it has stalled.

Posted by: 2br_or_bust at February 11, 2009 1:03 PM in response to A Big Project Actually Gets Financing!

They just don't get it. Thinking that an Apple Store in your building adds value is two-year old thinking. The equation has simplified---value, value, value.

Posted by: 2br_or_bust at February 11, 2009 10:23 AM in response to Apple May Set Up Shop at The Edge After All

I bet these new investors got some pretty tasty terms. Also probably helped that construction costs are coming down. Only folks approaching the level of broker desperation right now are contractors.

Posted by: 2br_or_bust at February 11, 2009 10:18 AM in response to A Big Project Actually Gets Financing!

Something being dangerous doesn't make something else safe--economic pain is not a zero sum phenomenon.

The bad mortgages in the southwest were written, securitized, bought, and sold by giant investment banks and hedge funds, most of whom call NYC home. The financial collapse of these entities will be felt nowhere more so than here.

Housing in Phoenix looks like a classic bubble that deals pain by reverting to the mean. I think the real concern is that the underlying business practices that have made New York so wealthy for the last 20 years are being swept away--there is no mean left to revert to.

Posted by: 2br_or_bust at February 9, 2009 4:12 PM in response to Most Post-2006 Condo Buyers Are Underwater?

I don't think anyone is arguing that NYC real estate will continue to demand a premium over other parts of the US. The question is how much of a premium. As US population has shifted south and west over the last decade, it's not ridiculous that NYC might demand less of a premium going forward. Some have argued that we didn't see the same kind of speculative silliness that happened in sunnier climes, which is probably true. My biggest concern is that the landscape of the New York economy has been radically altered by the collapse of the finance industry.

And while NYC has had population increase during my adult life, 11217 data shows that is by no means a mortal lock. The biggest mistakes are made when we think we "know" beyond a shadow of a doubt that something is true, when in reality it is only the case that it has been true for awhile.

I think everyone is rightly re-examining their assumptions and trying to figure out what information now matters to our financial decision making. For my part, there's too much noise and uncertainty for anything to be clear and that in itself means something. As I try to figure out what is happening, the unemployment % is my key indicator. I don't see how we can expect a stabilization or even a shallowing of the real estate market until job losses decelerate. If NYC job losses continue the disturbing trend from the beginning of this year of outpacing the national percentage, then you may very well see a net loss of population. I agree that we may not have "white" flight, but we could see some kind of "white collar" drought.

Posted by: 2br_or_bust at February 9, 2009 3:12 PM in response to Most Post-2006 Condo Buyers Are Underwater?

And the Park Place place has a similar total percentage reduction from the original 2.35MM.

Posted by: 2br_or_bust at February 6, 2009 12:51 PM in response to Open House Picks: Six Months Later

christopher-

I agree. I guess the inclination decision depends on whether you think that 1MM is the floor there. Man, I just don't know that even there you're going to be pleased with the deal come the fall.

Posted by: 2br_or_bust at February 6, 2009 12:46 PM in response to Toll Even More Serious Than We Thought About Price Cuts

Right, because lightbulbs are the the only recurring costs of a house beyond the mortgage.

Posted by: 2br_or_bust at February 6, 2009 12:29 PM in response to Toll Even More Serious Than We Thought About Price Cuts

A small score for the bears I would think. Or a score for small bears. Go Team Panda Bear.

Posted by: 2br_or_bust at February 6, 2009 12:22 PM in response to 147 South Oxford #3C Sells for 7 Percent Under Ask

I am just going to keep nodding my head to northsloperenter.

Posted by: 2br_or_bust at February 6, 2009 12:02 PM in response to Toll Even More Serious Than We Thought About Price Cuts

northsloperenter, I think you just described my wife and I (and a couple of other folks I know).

I don't think condo prices/carrying costs have come enough to dissuade someone like me, who has a moderate preference for a brownstone-like place, but I can imagine a scenario where the scales are more even. Now if brownstones get even half the haircut these condos are getting, I might have to leave Team Groundhog (you know, those of us who have no earthly idea what the market it going to do and are staring and our own shadows and wondering whether to venture out or dive back in for awhile) and pull the trigger.

Posted by: 2br_or_bust at February 6, 2009 11:39 AM in response to Toll Even More Serious Than We Thought About Price Cuts

In my idle perusing of new listings, I somehow "wish away" common charges when thinking about the place. And then I remember to look at them. Dammit.

Posted by: 2br_or_bust at February 6, 2009 11:26 AM in response to Toll Even More Serious Than We Thought About Price Cuts

1842-

I guess you are referring to my username. It's from a not actually very funny thing my midwest born and bred father said in reaction to NYC housing prices. I'm interested in something more than 2 bedrooms, but the memory of that reminds me to keep some perspective on this whole scene.

Posted by: 2br_or_bust at February 6, 2009 11:21 AM in response to Toll Even More Serious Than We Thought About Price Cuts

As a waiting-thinking-wondering potential buyer in Brooklyn who prefers a brownstone to a condo, I have to confess that at some point, the value proposition of a dramatically discounted condo becomes too compelling to discount. I have a couple of "musts" and desire as I might a townhouse or duplex, I'd be foolish to pay too much of a premium to live in the brownstone belt.

Posted by: 2br_or_bust at February 6, 2009 10:46 AM in response to Toll Even More Serious Than We Thought About Price Cuts

I live around the block and these are attractive. The psf seems high considering the current conditions. Maintenance and tax costs seems reasonable and this part of South CG doesn't have many places like this. This place is right across from the monolith that is 505 Court, but is like the 2nd building in from Court, right next to the expansion to Frankie's 457. 10-15% below these prices and I would start to be interested. Way better priced than the seemingly comparable conversions at 150nelsonstreet.com.

Posted by: 2br_or_bust at February 4, 2009 10:25 AM in response to Conversion of 185 Huntington Nearing Completion

Yea, the size of the problem is going to foreclose (pardon the word choice) the possibility of separating those of good will from those of, well, less than good will. You'd need a bureaucracy on the scale of the IRS to make such delineations. As a renter, it hurts me to say it since I directly benefit from rapidly-falling prices, but we're going to have to bailout some that don't deserve it in the name of keeping those ship from sinking.

Posted by: 2br_or_bust at January 26, 2009 4:08 PM in response to Quote of the Day

The Park Slope place wouldn't have been a bad deal last spring, though 32 weeks on the market and only a 5k shave indicates some pretty stubborn sellers. Kudos to them I guess but I wouldn't suggest it to current/near future sellers.

Posted by: 2br_or_bust at January 26, 2009 4:00 PM in response to Recent Sales in Brooklyn