Elliman: Brownstones Kick Ass in Q1

“VINDICATION!!!!!!! As i predicted, brownstone prices bottomed around the end of the year.”

RETARDATION!!!!!! The first dip does NOT count. It didn’t count in November of 1929 and it won’t count now.

***Bid half off peak comps***

Brownstones kick ass while banks kick the can down the road. Good results leveraged on thin, maniplulated volume (default/foreclosure stalls).

Let’s put this in perspective with today’s links (thanks, brownie – awesome timing!)…

Wall Street Must Recover Before City Can Overcome Recession [NY Times]

“Ms. Rosen traced the rise in the city’s dependence on Wall Street, showing how financial jobs had provided about one-eighth of all wages paid in New York in 1972. By 2007, more than one-third of all wages came from the ‘very volatile’ financial sector, she said.”

Where Wall St goes (beyond the reGOVery rally), NYC and brownstone prices will follow.

Defaults Rise in Loan Modification Program [NY Times]

“About seven million households are behind on their mortgage payments…New elements focus on allowing distressed homeowners to sell their properties for less than they owe and on shaving the principal owed by borrowers…The notion of cutting principal, however, has already run into some resistance from the big banks, which do not want borrowers to get the idea that their mortgage can be chopped on a whim.” –

The defaults are not going to magically disappear. Now, the government is talking about reducing principal but the big banks don’t want that becuase they’ll have to recognize 100% losses on HELOC’s, a market that they have dominated. THIS WOULD TAKE THEM DOWN! You DO know where these big banks are, don’t you?

NYC Sees March Foreclosure Uptick [The Real Deal]

“‘The increases were more tilted toward the final state of foreclosure,’ Saccacio said. ‘[That] may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline.'”

Increases more tilted toward the final state of foreclosure. Looks like the “big banks” are moving on some of the +180% increase in lis pendens from 4Q08 to 4Q09. And we’re just talking residential which affects brownstone prices directly. Then you have commercial (see yesterday’s report), inlcuded in that +180% number which affects brownstone prices indirectly because the banks are where…? [see first link above]

Then let’s put it in perspective of Elliman’s number of brownstone sales for the last couple of years (as far back as they have reported them)…

Report, Current Q, Prior Q, Prior Year Q

1Q10 069 062 032
4Q09 062 062 060
3Q09 062 043 070
2Q09 043 032 064
1Q09 032 060 088
4Q08 060 070 094
3Q08 070 064 174
2Q08 064 088 124

Wow! We’re still -60% below the highest volume of brownstone sales reported by Elliman and that may not even be the peak.

When volume peaks again, because banks will dump defaults and foreclosures and sellers will panic again, you can be rest assured that prices will fall towards half off.

Supply and demand, fam.

***Bid half off peak comps***

I think we are perpetually in a brownstone bubble, in that there is something about this housing stock that causes people to pay more than they would for other options.

Could we in a Brownstone bubble?

http://news.yahoo.com/s/ap/20100415/ap_on_bi_ge/us_foreclosure_rates

We can’t have it both ways,
increasing property values in
an atmosphere of wealth redistribution.

Mopar, bring pic’s or the digital camera with the pic’s and be ready to be peppered with question from me