barely writes:
Paulson speaks == Markets sink
barely | 03.31.08 - 10:11 am | #

giacutter writes:
Real estate in New York falling?

I have it on authority that such a thing will never happen.

Just like it never happened in Tokyo ten or twenty years ago.
giacutter | 03.31.08 - 10:15 am | #

AllenM writes:
Surprise, surprise, surprise.

Simply amazing that the smart folks who run wall street wouldn't understand their own backyard property market.

Someday this war's gonna end...but a lot of folks that thought they were rich are going to find out they were merely upper middle class;-}
AllenM | 03.31.08 - 10:24 am | #

Marcus Aurelius writes:
After all of the damage caused by Cloverfield and Godzilla, I don't understand why everyone wants to live in NY in the first place. Insurance must be hell.
Marcus Aurelius | 03.31.08 - 10:25 am | #

Anonymous Bosch writes:
Since the island is so small, RE only goes up.
Anonymous Bosch | 03.31.08 - 10:28 am | #

zaleriana writes:
Nah, it can't fall. The rich foreigners will all see it as a buying opportunity and prop up the market.


Right? Right?
zaleriana | 03.31.08 - 10:29 am | #

Marcus Aurelius writes:
Paulson's got the market in a manic-depressive personality crisis.
Marcus Aurelius | 03.31.08 - 10:31 am | #

Rob Dawg writes:
Seattle and Boulder are both reporting similar trends after a year of bragging "it's different here."
Rob Dawg | Homepage | 03.31.08 - 10:31 am | #

Shnaps writes:
Does this mean that all the B&T people are finally going to get a place in the city?
Shnaps | Homepage | 03.31.08 - 10:33 am | #

Anonymous writes:
Lower interest rates to zero...that will keep the party going...!

Wait a second, no one is doing "no-doc" loans anymore, so you have to have a job to get a loan.
Anonymous | 03.31.08 - 10:34 am | #

w writes:
This sounds big.

http://www.telegraph.co.uk/money...31/ cnfed131.xml
w | 03.31.08 - 10:34 am | #

bacon dreamz writes:
OT: hooray!!!

http://www.bloomberg.com/apps/ne...4au0& refer=home
bacon dreamz | 03.31.08 - 10:38 am | #

Marcus Aurelius writes:
bacon dreamz | 03.31.08 - 10:38 am

I'll cheer when they start handing down indictments.
Marcus Aurelius | 03.31.08 - 10:39 am | #

w writes:
I wonder which IB is hiring him as a consultant.
w | 03.31.08 - 10:40 am | #

Anonymous writes:
Rob Dawg,
Do you happen to have links for Seattle and Boulder? Both are markets I'm interested in. Thanks in advance.
Anonymous | 03.31.08 - 10:40 am | #

trail writes:
w - that's a heck of a link! Is the Telegraph a serious paper, or one of those checkout counter rags? Either way, it's an interesting thing to speculate about.
trail | 03.31.08 - 10:42 am | #

Laurellium writes:
Shnaps writes:
Does this mean that all the B&T people are finally going to get a place in the city?
Shnaps

Two ways to look at it:
1) We're all bridge and tunnel if you go back far enough (or maybe just bridge)
2) Who'd want to move here with snobby neighbors who use derogatory terms to describe others?
Laurellium | 03.31.08 - 10:42 am | #

Joy writes:
They're not making any new land but they're in no danger of running out of sky.
Joy | Homepage | 03.31.08 - 10:44 am | #

Anonymous Bosch writes:
Something was mentioned the other day that I don't understand.

What is an "8 handle"? Is it an RE term?
Anonymous Bosch | 03.31.08 - 10:46 am | #

El Cliffo writes:
And it was even bigger, mr.w, when I posted that Telegraph story in the Mauldin thread last night:

http://www.haloscan.com/comments...2012069/ #445085
El Cliffo | 03.31.08 - 10:49 am | #

Marcus Aurelius writes:
Paukson:

"Innovation leads regulation."

Overlooking the fact that most of the innovation going on is illegal in the first place.
Marcus Aurelius | 03.31.08 - 10:49 am | #

Racer X writes:
bacon dreamz writes:
OT: hooray!!!

http://www.bloomberg.com/apps/ne...4au0& refer=home

I'm shocked, shocked to find cronyism in Washington!
Racer X | 03.31.08 - 10:49 am | #

dryfly writes:
This sounds big. - w

w - there will be two positives coming out of that:

1) It will finally shut up all those saying 'We are going Japanese'... they were wrong, we are going Norwegian.

2) Maybe I'll get Lingonberry on Lefse on the counter where I bank instead of those stale store bought cookies. Though I'm certain the coffee will be as bad as ever (If you didn't know five hour evaporated pot coffee = 'Norwegain Expresso').

dryfly | 03.31.08 - 10:52 am | #

Alpha_Bear writes:
"What is an "8 handle"? Is it an RE term?"

I believe the term was used in reference to the cost of fuel in Scotland. Diesel now costs almost $9US a gallon there.
Alpha_Bear | 03.31.08 - 10:53 am | #

YLSP writes:
re: OT "Nordic Style"
Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country's top four banks - Christiania Bank and Fokus - were seized by force majeure. "We were determined not to get caught in the game we've seen with Bear Stearns where shareholders make money out of the rescue," said one Norwegian adviser.

Has the JP-Bear Stearns deal been blessed and finalized? Or can the shareholders still get nothing and suck-it-up? I think the Fed is looking at a Nordic policy because they have no idea what to do...
YLSP | 03.31.08 - 10:55 am | #

dryfly writes:
Diesel now costs almost $9US a gallon there.

How much is that in pesos?

dryfly | 03.31.08 - 10:55 am | #

ano writes:
golly geez, now I can buy a 700 sq ft condo for $1,000/sq ft instead of 1250. Gas up the VW bus mineva, we be heading to that smelly city called Manhattan.
ano | 03.31.08 - 10:55 am | #

w writes:
El Cliffo, nice! Next time I'll read through the 1000 comments from the day before when I plan on posting.
w | 03.31.08 - 10:56 am | #

Anonymous Bosch writes:
Less than dollars.
Anonymous Bosch | 03.31.08 - 10:56 am | #

CRead writes:
Anonymous Bosch writes:
Since the island is so small, RE only goes up.

Exactly... just like Japan! Oh, maybe not like that... Just like it did in the 80s! Oh, wait...
CRead | 03.31.08 - 10:56 am | #

Shnaps writes:
bacon - that kind of sucks, I was getting his 'video tribute' in order. Well, I am sure he will turn up again somewhere.

Arrivederci, Alphonso!
Shnaps | Homepage | 03.31.08 - 10:58 am | #

dryfly writes:
"We were determined not to get caught in the game we've seen with Bear Stearns where shareholders make money out of the rescue," said one Norwegian adviser.

YLSP - I married a girl almost 100% Norwegian descended... plus part of my family is Norwegain too. Suckers have no sense of humor - well not visible anyway.

Uffda - those New York bankers gonna be in for one heckuva time for sure!

dryfly | 03.31.08 - 10:58 am | #

Rob Dawg writes:
Do you happen to have links for Seattle and Boulder? Both are markets I'm interested in. Thanks in advance.

Seattle: http://www.crosscut.com/blog/rea...g+prices+drop!/

Boulder: http://boulderrealty.blogspot.com/
Rob Dawg | Homepage | 03.31.08 - 10:58 am | #

Marcus Aurelius writes:
Godzilla got Tokyo, too.
Marcus Aurelius | 03.31.08 - 10:58 am | #

Rob Dawg writes:
dryfly writes:
Diesel now costs almost $9US a gallon there.

How much is that in pesos?


Which kind? US pesos or Mexican Pesos? Or wait and they difference will be negligible. Hoocoodanode that when dollar parity was first mentioned they meant Mexico and not Canada.
Rob Dawg | Homepage | 03.31.08 - 11:00 am | #

Anonymous Bosch writes:
Well, I am sure he will turn up again somewhere.

Let's hope it's the greybar hotel.
Anonymous Bosch | 03.31.08 - 11:01 am | #

El Cliffo writes:
No, mr. w, it would have only required reading just a few posts at the end of the thread just previous to this one.
El Cliffo | 03.31.08 - 11:02 am | #

dryfly writes:
Hoocoodanode that when dollar parity was first mentioned they meant Mexico and not Canada.

LOL. Exactly.

dryfly | 03.31.08 - 11:02 am | #

Anonymous Bosch writes:
Don't you have to go to Minnesota for Norwegian humor?
Anonymous Bosch | 03.31.08 - 11:02 am | #

Lionel writes:
Rob Dawg writes:
Seattle and Boulder are both reporting similar trends after a year of bragging "it's different here."

Seattle has a long, long way to fall. I just rented a nice house for 1800; two doors down an identical place, built by the same builder in 1931 went on the market for over 700K. You don't need to get out your rent/own calculator for that one.

Another Seattle site is --

http://seattlebubble.com/blog/
Lionel | 03.31.08 - 11:02 am | #

anonymous writes:
Hat tip to w AND cliffo!
anonymous | 03.31.08 - 11:04 am | #

steelhead writes:
Marcus Aurelius writes:
Godzilla got Tokyo, too.

My keyboard just took a shot. LOL
steelhead | 03.31.08 - 11:04 am | #

dryfly writes:
Anonymous Bosch writes:
Don't you have to go to Minnesota for Norwegian humor?
Anonymous Bosch | 03.31.08 - 11:02 am | #

Got 'Norwegian Charissma' there too dontcha know.

;)

dryfly | 03.31.08 - 11:05 am | #

jm writes:
High on the slopes above Lake Superior you will find Duluthans of grandeur.
jm | 03.31.08 - 11:10 am | #

Joe Six Pack writes:
I'm beginning to believe that the issue isn't credit crunch and high house prices. When you look at many of the cities that are going into the dumps, their housing wasn't that expensive. What really showed up was a lack of yoy job growth to maintain the cash flow needed to justify the prices. Even in places like Seattle, which had positive job creation, the number of new jobs wasn't sufficient for the existing economic reality. With recession kicking in, the situation can only get worse. Look at Cleveland, where even in good times job creation was non-existent. People were bailing out for better opportunities, and now the banks can't even give a house away.
Joe Six Pack | 03.31.08 - 11:17 am | #

Yossarian writes:
People in Portland Oregon finally getting the 'come to Jesus' moment, as well... big story on the local NPR station about the Portland bubble .. 'is our 'immunity' to real estate declines finally over?"
Jesus H. Christ. Doesn't anybody on NPR read ANY real estate blog?
Yossarian | 03.31.08 - 11:19 am | #

Rob Dawg writes:
J6P,
This is where i am finally being vindicated. Flyover america had their bubble too. Prices held stead or kept with inflation. Without the bubble they would have declined. It is a mistake to think they don't have far to fall. Their advantage is fewer exotic mortgages. 30yr fixed rate notes can be paid back in pesobucks in a few years.
Rob Dawg | Homepage | 03.31.08 - 11:20 am | #

alykatz writes:
I'm a proud B&T person who wouldn't move back to Manhattan now if you paid me (and I grew up there). With the spike in RE prices half the creative population of Manhattan decamped to Brooklyn, Manhattan is full of boring people and chain stores. Like the rest of the marketplace: the inflation of values was a delusion covering up a systematic devaluation of the asset -- in this case, a place that's no fun to live in (unless you're a multi-millionaire).
alykatz | 03.31.08 - 11:24 am | #

Jack Staub writes:
Holy complications, Batman!
Jack Staub | 03.31.08 - 11:30 am | #

Bob_in_MA writes:
alykatz writes:
...With the spike in RE prices half the creative population of Manhattan decamped to Brooklyn, Manhattan is full of boring people and chain stores.

As an occasional visitor to NY over the last 30 years, I've really noticed the trend. Manhattan has become increasingly homogenized. In 1980 there were still all sorts of funky neighborhoods, ridiculously cheap places to eat, etc.

My biggest pet peeve is the way the museums have become expensive and crowded. Going to a show at the Met now is like being in a shopping mall. Art museums wanted to bring in the masses and they succeeded in spades.
Bob_in_MA | 03.31.08 - 11:42 am | #

Cobradriver writes:
Rob Dawg | Homepage | 03.31.08 - 11:20 am

Yep,before I transferred to Florida I was looking at rural land west of Columbus,Oh. I grew up in the area and wanted to move back. I have a good job with a large company. Make quite a bit more than median income. I was looking 4-5 years ago and thought "How the fuck can people afford this land at these prices?"
Prices haven't collapsed but I can show you 8-10,2-5 acre lots that have been on and off the MLS for the last 4-5 years...

Christ,prime farmland has went from 3k-10k per acre in 8 years.

Chris
Cobradriver | 03.31.08 - 11:46 am | #

FT Woods writes:
Is there a connection between these two or is it just coincidence?

Fed eyes Nordic-style nationalisation of US banks Fed looking into Nordic banking

The North Atlantic conspiracy Krugman on Iceland and Bear Stearns
FT Woods | 03.31.08 - 11:55 am | #

Rob Dawg writes:

Christ,prime farmland has went from 3k-10k per acre in 8 years.- Cobradriver

That roughly parallels our prime farmland going from $15k to $50k in those same 8 years.
Rob Dawg | Homepage | 03.31.08 - 11:58 am | #

Jim writes:
Have to laugh a bit. The Harry Potter movie wizard, Daniel Radcliffe, bought two multi-million dollar apartments in NYC recently, advised as I recall by Coutts (?), the royal bankers. I suspected this was not a smart move (he could have rented when he needs to be in NYC) and now he may discover that.
Jim | 03.31.08 - 12:03 pm | #

Karen writes:
Say what you will about Manhattan. It's the only place I'd want to live in the USA. I don't own a car. I walk, subway, bus or taxi to get around town.

I don't think it's boring or homogenized. We Manhattanites need some of those big box stores, which give greater choices than mom & pop stores.

The development of Brooklyn is wonderful.

Looking at Manhattan from a tourist's eye is not the same as living here.

In any case, I welcome the drop in prices.
Karen | 03.31.08 - 12:30 pm | #

Vega writes:
RE prices in NYC are insane. The building next to mine is 70% complete. The developer is trying to sell 2BRs *starting* at $1.65 million. Nobody in their right mind is going to pay that amount with any consistency. Wealth is being destroyed here in NYC as banking stocks trade lower and lower, and the median income for all non-financial gigs is about $77,000. Taking a page of 'awesome understatement' out of CR's book, I venture to believe that many developers around here might be in for a surprise fairly soon.

Oh, and this: the aggregate amount of new retail and commercial development in Manhattan now is astounding. You can't walk five blocks without passing a new high-rise going up. They are everywhere.

I'm looking for some emotional symmetry on the downside: we might feel as much pain at the bottom disscussing RE as we felt joy at the top.

We shall see.
Vega | 03.31.08 - 1:04 pm | #

Lurker writes:
For perspective, it would have been nice to include this paragraph from the Miller & Samuel press release that the Bloomberg story is quoting:

"...Manhattan apartment prices have more than tripled over the last 10 years as employment and population climbed and crime plummeted. The last time year-over-year prices dropped for a quarter was at the beginning of 2002, just after the Sept. 11 terrorist attacks. The last annual decline was in 1995, after the Federal Reserve increased interest rates seven times in a year."
Lurker | 03.31.08 - 1:41 pm | #

julia writes:
great news! i was expecting that to happen, but not so soon.

now tell me that there's not going to be a bail out for homeowners... you will really make my day if so!
julia | 03.31.08 - 1:45 pm | #

Jim writes:
Here is the story about what Radcliffe paid for his apartments.
http://www.showbizspy.com/2008/0...for-49-million/

The writer is a bit confused. A 5th story apartment is probably not a "penthouse" and Radcliffe is worth around $40 million, not $6 million. But the prices are interesting: 4.3 million for a two bedroom and 4.9 million for a three bedroom.
Jim | 03.31.08 - 2:02 pm | #

jk writes:
Manhattan residential rents declined 10% before Bear Stearns. It is not hard to imagine another 10% post Bear.

Co-ops will hold up better than condos. Manhattan co-op boards require 20 to 50% down payments so there is plenty of equity to ride out the storm.

All new construction in Manhattan has been condos for years and anything goes with financing. Expect to see more fallout there.

The bigger bubble to burst will be in the Hamptons. Some prices are already 20% lower than last summer.
jk | 03.31.08 - 2:08 pm | #

julia writes:
jk,

jonathan miller once explained to me how this "co-op boards require 20-50% down payments" it's not widely applied but widely assumed.

would be great to know what the real minimum down-payments are. 25% in manhattan pay cash, so that might be were the real cushion for co-ops is. although... the price is set at the margin.

still, i expect that many will try to sell before the bubble earnings evaporate. tons of baby boomers without appropriate retirement savings were betting on nyc real estate. it would be interesting to know whether they will engage in fire selling.
julia | 03.31.08 - 2:36 pm | #

transient writes:
I was in NYC last week, and there was a sign hanging from a half built new building advertising:

"For sale or rent. Foreigners welcome."
transient | 03.31.08 - 3:03 pm | #

las writes:
NYC real estate has experienced some pretty dramatic swoons in the past, and could well happen again with job lay offs from wall street. My next door neighbor bought his Manhattan apartment 14-15 years ago for about $74K (in a big dip). He comes and uses it about 1-2 weeks out of each year. Other than that it stands empty. The unit has appreciated in value so much that his use of it is still very rational. I too bought during the same low at about the same price despite being poor at the time - really. It was the best investment I ever made.
las | 03.31.08 - 3:13 pm | #

bk writes:
Julia,

There now seems to be more baby boomers looking to retire soon than there will be people who can afford current market prices. Many bought at remarkably low prices, so they may have room to cut the competition if they need to sell.

Regarding the security of coops, I know a number of families who qualified for their coop purchase, and then immediately purchased lavish second homes. Even if you qualified for your coop, that hardly guarantees you haven't subsequently overextended.
bk | 03.31.08 - 4:14 pm | #

julia writes:
bk, great points!
julia | 03.31.08 - 4:18 pm | #

LArry writes:
Any websites breaking it down by neighborhood? Interesting to see about particular neighborhoods in Manhattan. Village? East Village? SoHo? Harlem?
LArry | 04.01.08 - 10:44 am | #