Goldman: NYC Prices Have a Ways to Go
“New York apartment prices are very high relative to the observable fundamentals. Using three alternative yardsticks—price/rent, price/income, and affordability—we find that prices would need to decline by 35%-44% to return to the valuation levels seen in the 1995-1999 period, before the start of the recent boom.” — Goldman Sachs via Curbed
First off, who has any faith in anything that someone from Goldman Sachs, Shearson Lehman, Bear Stearns, Smith Barney or Barney Rubble has to say at this point. I think most people can now understand that “analysts” are those people who have duped enough other people into believing that they know something about the future that others don’t. Despite ample evidence that we live in a probabalistic universe as opposed to a deterministic. In other words, scientists can’t even predict the weather more than 5 days out let alone economics which has much to do with the additional complexity of human interactions.
What we can say is that things go up and down, back and fourth. so while assclowns on this site get celebrated by obsequious sycophants for somehow “predicting” a downturn, serious individuals understand that markets are cyclical and that analysts are nothing more than snake oil salesmen with degrees from Yale or Columbia or whatever ivy league college is deemed the price of admission to this circus. That includes politics as well.
that being said, maybe prices will come down more. so what. what’s with the constant undertone of doom in here. did someone see an asteroid headed this way or something, let’s at least wait till 2012, at least you will have Nostradamus and the Mayans backing your predictions.
Perhaps if we all join in the tone of doom and gloom along with Governor Patterson and President Elect Obama we can all give ourselves a collective Oprah moment by 2011 and cry over tea with Doctor Phil like the skirt wearing cupcakes most here aspire to be.
Sebb if the financial industry is regulated correctly you will lose alot of jobs. Especially the ones selling worthless securities to other dumb firms who then sell them to other dumb firms. Think about all the dumb firms who won’t be able to hire those salespeople. But I think at one point you may be right , wall street always finds ways to sell something worthless to investors. So we may get some jobs back but it may take some time. MAYBE 20 YEARS , NO one knows….
OK Sebb, I’ll bite. I’ll just explain it without being demeaning.
NYC may very well continue to be the financial capital of the world. But being special doesn’t mean that prices will not go down. It just means that they should be higher than non-special places. Even after prices go down in NYC, they will be much higher than non-special parts of the country. There are lots of very special markets where prices are going down. NYC is one of them.
I didn’t realize HOBOKEN was looking for a fixer upper (see reno blog comment). Kind of softens his position a bit. Add at least half a mil to his BH tab. More if he’s going to preserve it right.
Never mind GS, here’s Roubini take:
“(MarketWatch) — The U.S. recession will last two full years, with gross domestic product falling a cumulative 5%, said Nouriel Roubini, chairman of RGE Monitor. Roubini was one of the first economists to predict the recession and the credit crunch stemming from the housing bubble. For 2009, Roubini predicts GDP will fall 3.4%, with declines in every quarter of the year. The unemployment rate should peak at about 9% in early 2010, he said. Consumer prices will fall about 2% in 2009. Housing prices will probably overshoot, dropping 44% from the peak through mid-2010.”
HOBOKENROCKS : So where will all the Jobs go? The jobs will come back to NYC in time. This will remain the Financial capital of the World and if not the World then at least the United States. Have you been to LA or Miami, do you think they are the next financial hubs? Or maybe you think Jersey city is where it’s at.
I ll send you off with a box of vino if you sell me your place now for 1 million. JUST KIDDING.
Hey HOBO, unless I’m the one having to sell the brownstone to you, in which case I think you’ll need to buy me a drink!
Okay Biff and I will take you up on that offer. I will need a drink if I am going to start one of those crazy reno jobs I have seen on brownstoner.