Inventory over 7,000

7,628 according to streeteasy, with some 250 houses = 7,378, w/o FSBO's, small brokerages, some new development.

A one-year supply, and more coming online daily.

"Seasonally strong" = Hamptons, where prices are down by nearly 10%.

On the other hand, intreesting article in NY Mag this week:

"....the number of apartments in Manhattan is on the rise. This shouldn't be much of a surprise, given the economy is looking rough, particularly in the financial sector...But the surprise...Greenwich Village inventory (East, West, and central alike) is going against the trend - it's actually fallen slightly. Why the disparity?...the Village is largely cordoned off into histioric districts, meaning that almost nothing new is built, and demand stays tight, year after year. (Data supplied by StreetEasy.com.)"

Again, sweeping generalities (INVENTORY OVER 7,000 screams the board title) really don't tell one the whole story.

So Palazzo Chupi didn't flood the west village with inventory?

Must be all of those foreclosures hitting the market.

Im 2 weeks into new charting system! Man, this tech crap is so frustrating. Should be up soon, but want it to be perfect and accurate. You guys will have range options of 1MTH, 3MTH, 6MTH for now, and I am having a %change tool too so you can see how the dataset has changed over these time periods.

any other suggestions, feel free to let me know!

First, :Seasonally strong" was a joke, steve.

Malraux, we all saw the article, thanks for pointing it out, though. Let me tell the whole story: Sell now or you will never see these prices again.

Juiceman: yeah, you're right, there's no foreclosures. I guess the market can't come down... I wish you could manage my money...

urban go peddle you negative crap some place else. Your a real estate agent who pretends he's an economist. Anyone ever tell you you look like a eye snake.

I meant to say you look like a one eyed snake. Sorry about that.

7,697 as of today.

actually I forgot to hyphenate the One-Eyed snake. Sorry again.

yea yea one-eyed snake..got it..good one.

I would happily manage your money dmag, but aren't you saving for the ability to pay your broker 15% of one years rent?

another reader who forgets how BULLISH I was publicly on Manhattan from 2005-2007. Love it how they enjoy when your bullish for years, and whine like a little bi*ch when you turn cautious.

Like I said Urban your a real estate agent not a economist so go sell apts and don't forget it's raining today so you may want to put your condom over your head.

Urban - just saw your update. It's very interesting. It seems that while inventory has gone up - sellers are trying to hold the line. Unless the economy takes a big turn south - we might just stay in this holding pattern for a while. (I don't think that even the RE bulls are predicting a huge upswing until later in the year at the earliest.) Thanks again for your blog - and ignore houser!

trust me, I laugh at doogie howser up there...when someone's only response to real macro discussions are insults, you can see their intelligence level. Not sure why he thinks I want to be an economist, but whatever.

Anyway, back to reality and whats really going on out there. As we had an office meeting with President of our company, and about 60 agents were in the office, we discussed current state of our seller clients psychology. It was asked, 'how would you describe your sellers'? The overwhelming response was 'denial' and 'behind the curve' by everyone. Most sellers, not all, but most still have prices fairly high and are anchored to expecting 10% appreciation from similar sales in past 6-10 months. Its normal for sellers to expect this though. There is a growing number of sellers who are reducing their prices though, that I see, as they attempt to get 'ahead of the curve' and bring prices back in line.

Thing is, buyers right now are cautious and when a buyer gets cautious, they get more savvy and hesitant about plunging in. This would explain the light sales volume for the first 3 months of the year, when volme is generally much higher for wall st bonus season. I expect inventory to continue to trickle higher, until confidence returns to masses of buyers out there. There is nothing wrong with a market that rose 100% in 5 years, to give back 5% or 10%. Nothing at all, its in fact healthy for longer term sustainable growth. What you do NOT want, is sellers to keep prices high and before you know it, nothing moves and inventory is near 9,000. Then you got a problem and buyers will take advantage of it and prices will fall more than they might otherwise would have.

We need to see how the overall economy and total jobs losses on wall st pan out. I still think 2008 will be the year inventory rises, as I said late in 2007 when we were at 4,600 total inventory, and that 2009 will be the year that prices dip a bit. Just an opinion that could be wrong.

"Most sellers, not all, but most still have prices fairly high and are anchored to expecting 10% appreciation from similar sales in past 6-10 months. Its normal for sellers to expect this though."

Actually, urban, I have to disagree with you - it's not normal for buyers to expect this, except in a bubble environment.

Inventories will continue to rise, prices will have to fall. This isn't about the economy as a whole; it's about NYC's economy, which is basically Wall Street. The party there is over for quite some time to come on Wall Street, new regulations are coming online (even regulating credit cards - yikes!) that will reduce leverage and stop the Greenspan recklessness of the past 8 years.

Property prices cannot rise faster than incomes and leverage let them. They are far out of line right now.

Thanks, Urban for the insight. We all read the NYTimes article about the cold war between buyers and sellers, but when you have a much larger sample size confirming it, it's a lot more meaningful.

digs, I understand you don't do rentals, but do you have any thoughts on the rental market for 2008 & 09? Seems to me that with slower sales, rentals will remain tight - which will result in an increase in prices. I understand steve's points about incomes and rents being tied, but I believe that is a longer term correlation and based on demand, we will continue to see rents increase over the next 18 months.

Additionally, I also feel that prices are out of whack (in some cases) in relation to rents, however I don't believe we are as far out of whack as others. With a 5-10% correction in prices and modest increases in rents, I believe the market will be closer the equilibrium that is often talked about on this board.

Juice - I have to go with Steve on this one. It will be tied to jobs/income and in slow markets or temporary downturns, even rentals get affected. They did last time, in 2002-2003. Rents rose big time and then dropped for a few years when dot com bust hit. I know this because I bought my condo in April 02, and had a tenant willing to pay 4000 for it if I wanted to. But I loved the place and lived there for the first year. Then, in 2003, I only got 3400 for it and rent went up in 2004 to 3550...I moved back in after the 2nd year was done renting, because I wanted to sell. If I moved back in for one more year, I get to use the prim res tax benefit.

I think rents have been steadily rising for 3-4 years now, since mid-late 2004...I should re-look at the data on this.

Anyway, rents to me appear to be UP about 30-50% in the past 3 years; depending on product. Studios / 1BR's rents certainly spiked. A 1BR in UES drmn bldg was going for 2200 or so 3 years ago. Today, def over 3,000, and likely around 3200-3400...If incomes come down and jobs are lost, how will rental market afford to sustain these gains? I repeat IF in that last sentence!

"With a 5-10% correction in prices and modest increases in rents, I believe the market will be closer the equilibrium that is often talked about on this board."

Yes, I agree! But rentals will likely lag and be more dependent on economic conditions. So, that equilibrium you mention in that statement, will be exposed to falling rents as time goes on, should the economy falter. Or at least I believe would occur. In that case, gap would widen again.

makes sense, here is a small bit on the economy, time will tell.

http://money.cnn.com/2008/05/02/markets/thebuzz/index.htm?postversion=2008050217

JuiceMan, there have been lots of posts showing that the exact same apartment is for rent at half what it would cost to buy. That is currently the norm, yet it is abnormal.

I've done this research in every way I know how, with all the calculations I can figure out, and I haven't been able to reach any conclusion other than the fact that it costs twice as much to buy as to rent.

What happens to rental prices will depend on incomes. In my building there's a 2-bedroom that they tried to rent for $5,800, they just lowered the asking price to $5,300 and still no takers. They can afford to wait a while since the apartment isn't available until July 1, but it's been advertised since April 1.

Used to be in my building that apartments were snapped up in a day.

You keep on saying this: "With a 5-10% correction in prices and modest increases in rents...." What makes you think that rents will rise? It seems more like a wish than reality. To rent the 2-bedroom in my building you'd need to make $215,000. Jobs paying those types of salaries are (were) on Wall Street for the most part.

You remind me of a show on HDTV were a mother/daughter team investigate why properties aren't selling, and when the price is too high they ask the owner how they came up with it, and they inevitably say, "Well that's the price we need to break even," or "Well that's the price we need to buy what we want," and the mother/daughter team comes back and says, "Why do you think a seller would pay you a price just because that's the price you need?"

For your "correction" to work it requires that properties fall 5%-10%, and, I assume, a concomitant rise in rental prices of 5%-10%, for a total correction of 10%-20%. I have these questions:

1) What will make rent prices rise in your view? It seems to be only because you want them to, because if incomes are falling, rents will have to fall along with them - there is no leverage.

2) Why do you think that if sales are slower, rents will rise? To me they seem to be entirely unrelated. Rents are related to incomes, not to property sales.

3) Since even if your "dream theory" of rising rents and falling property prices comes true, it would still be 50%-75% more expensive to buy than to rent the exact same unit. What makes you think that that is sustainable in the long-term?

4) Since people are losing their jobs on Wall Street and credit is drying up, where do you see this "longer term correlation based on demand"? Where is the demand coming from? And - moreover - demand is not a "flat" concept: the equation is "demand at what price?" It's a curve. If housing were free there would be infinite demand; if all apartments cost $10 billion, there would be zero demand.

I would really like to understand your thinking on this, because it seems to go to the heart of what a lot of people are thinking, and it seems phantasmagorial to me:

1) Demand exists along a curve;

2) Owner-occupied real estate is valued at its output value: market rents;

3) It should never cost significantly more (or less) to own rather than to buy, since buying is merely a capitalized expense, and creates no "income."

4) Your - to me fantastic - "dream theory" will still leave rents far, far cheaper than owner's carrying costs.

If you want to invest in real estate to rent out, would you buy a property that will cost you twice as much to hold as you can conceivably get for it in rent? Because that is what you are proposing, which is why it makes no sense.

JuiceMan, there have been lots of posts showing that the exact same apartment is for rent at half what it would cost to buy. That is currently the norm, yet it is abnormal.

I've done this research in every way I know how, with all the calculations I can figure out, and I haven't been able to reach any conclusion other than the fact that it costs twice as much to buy as to rent.

What happens to rental prices will depend on incomes. In my building there's a 2-bedroom that they tried to rent for $5,800, they just lowered the asking price to $5,300 and still no takers. They can afford to wait a while since the apartment isn't available until July 1, but it's been advertised since April 1.

Used to be in my building that apartments were snapped up in a day.

You keep on saying this: "With a 5-10% correction in prices and modest increases in rents...." What makes you think that rents will rise? It seems more like a wish than reality. To rent the 2-bedroom in my building you'd need to make $215,000. Jobs paying those types of salaries are (were) on Wall Street for the most part.

You remind me of a show on HDTV were a mother/daughter team investigate why properties aren't selling, and when the price is too high they ask the owner how they came up with it, and they inevitably say, "Well that's the price we need to break even," or "Well that's the price we need to buy what we want," and the mother/daughter team comes back and says, "Why do you think a seller would pay you a price just because that's the price you need?"

For your "correction" to work it requires that properties fall 5%-10%, and, I assume, a concomitant rise in rental prices of 5%-10%, for a total correction of 10%-20%. I have these questions:

1) What will make rent prices rise in your view? It seems to be only because you want them to, because if incomes are falling, rents will have to fall along with them - there is no leverage.

2) Why do you think that if sales are slower, rents will rise? To me they seem to be entirely unrelated. Rents are related to incomes, not to property sales.

3) Since even if your "dream theory" of rising rents and falling property prices comes true, it would still be 50%-75% more expensive to buy than to rent the exact same unit. What makes you think that that is sustainable in the long-term?

4) Since people are losing their jobs on Wall Street and credit is drying up, where do you see this "longer term correlation based on demand"? Where is the demand coming from? And - moreover - demand is not a "flat" concept: the equation is "demand at what price?" It's a curve. If housing were free there would be infinite demand; if all apartments cost $10 billion, there would be zero demand.

I would really like to understand your thinking on this, because it seems to go to the heart of what a lot of people are thinking, and it seems phantasmagorial to me:

1) Demand exists along a curve;

2) Owner-occupied real estate is valued at its output value: market rents;

3) It should never cost significantly more (or less) to own rather than to buy, since buying is merely a capitalized expense, and creates no "income."

4) Your - to me fantastic - "dream theory" will still leave rents far, far cheaper than owner's carrying costs.

If you want to invest in real estate to rent out, would you buy a property that will cost you twice as much to hold as you can conceivably get for it in rent? Because that is what you are proposing, which is why it makes no sense.

i just dont buy the jobs data, and for the very good reason of the b/d model used. This economy is losing jobs in private sector, plain & simple for 5 months straight now. Job gains are in govt and education/health services, leisure & hospitality.

Its like, you see its raining outside, yet the weather channel says its not. Now Im not a doom & gloomer, as I publicly talked March 11th, about that new fed product TSLF and how that would likely help with credit spreads and the problems we faced (http://www.urbandigs.com/2008/03/fed_acts_targets_freeze_of_cre.html), but the economy is very weak. So, I just have a hard time believing the hype being priced into equities right now, which is the most widely used gauge for general confidence out there. I hope stocks are right, I really do, because that means strong business for me down the road. I'm just skeptical.

And remember, a 10% reduction in home prices is a lot more than a 10% rise in rents, because rents are starting from a lower point:

A 10% reduction on a $1,000,000 apartment is $100,000. At 6% that is (about) $600 a month, or $7,200 in mortgage payments a year. Let's say that such an apartment is currently renting for $3,500 a month, which is reasonable for a one-bedroom priced at $1,000,000 in today's market. A 10% rise would be $350 a month, or $4,200 a year in increased rent, requiring $50,000 extra in income per year to pay for.

So, when you do the math, for your "dream theory" to work, since rents are presently half of owners' carrying costs, they would have to rise twice as fast as property prices would fall to equate to the same absolute value. That is, a 10% fall in property prices would require a 20% rise in rents to be equal in value.

Such a scenario is implausible: where's all the income incoming from?

JuiceMan, your numbers don't add up, and never have.

By the way Juice, when I said this...

"Its like, you see its raining outside, yet the weather channel says its not."

..I didnt mean you you, I meant the BLS and jobs report! They say construction gained 45,000, when in fact they shed 61,000 jobs. Why do we event bother. Data can be manipulated so many ways. Have you seen the comparisons of how the govt calculates certain datasets on blogs recently?

On Inflation

http://bigpicture.typepad.com/comments/2008/04/inflation-aboun.html

On Unemployment/Jobs

http://globaleconomicanalysis.blogspot.com/2008/05/april-jobs-another-report-from-bizarro.html

Doesn't matter what jobs are doing in the country; it matters what they're doing in NYC. Who cares if lots of people don't have jobs in Detroit but do in Omaha. It has no bearing here.

Wall Street is in triage, JuiceMan. Read what Jamie Dimond is saying in today's paper.

However, urban, the stock market is a forward indicator.

Urbandigs, you ever get the feeling that we're going to be going through a sustained period of more of the same (e.g., erratic indicators, some contraction, etc.) and that perhaps this is a substitute for the "boom and bust" of the past? I think this is the result of globalization, government intervention, and new technology (eg., for inventory control, etc.).

My sense is that we're going to go through this era of mild stagflation for a while, until "the next big thing" comes along. I am just skeptical of both those who think we're going to have a deep,long awful recession and those who think we'll see a sharp recovery in 2008.

I think your view of the impact on the RE market is exactly right, though we may differ a little bit about the magnitude of the 2008-09 drop.

Steve - I do not look at the stock as a forward indicator, telling us what is to come. I look at the stock market as a discounting mechanism; slightly different. I do not look to the stock market as a reliable indicator of what is to come. Too much irrational behavior in stocks. I look to the bond market, more than the stock market for a sense of what may come.

If stock market was leading indicator, why did it hit record highs in October, 3-months AFTER Bear's 2 hedge funds sparked the credit crisis and credit markets were deteriorating fast? The reason, is because stocks are irrational and did not yet price in what was to come. Confidence wasn't shaken at that time, in the face of warning signs.

steve, fuck off will you? I don't pretend to know everything and asked digs a straightforward question which he answered. You on the other hand responded with exactly the same answer as digs but in a long winded, arrogant, and confrontational way. I've shown you numbers before and we end up arguing about detailed mechanics of calculations that are often far fetched and exaggerated in your favor. It's a waste of time. If you think arguing over a 10% vs. 40% correction is productive, then argue with yourself.

stock prices are based on forward earnings expectations (forward p/e's), which are indeed imperfect in the short-term, and based on less than perfect knowledge. Even with perfect knowledge, they are imperfect, and can behave irrationally, which is why you need to look not only at the price of a particular stock, but of the market as a whole: it should trade in a range (18x, more or less) and if it goes up too high as a whole, it's a sign of trouble.

Same with housing, just it's not as easy to see since there are fewer homes and the markets are illiquid.

I'd still like JuiceMan's answers to my very reasonably questions, though: why does he believe that rents will rise - as I proved with my numbers - twice as fast as property prices will fall, to reach market equilibrium, where market rents = owners' carrying costs?

Where are we getting that extra income to have a one-bedroom apartment increase 20% in price? On a $3,500 a month apartment that would require an extra $28,000 a year in income to afford. Who (but Wall Street) gets a 20% pay increase every year?

If that $3,500 apartment saw a 20% rent increase, it would cost $4,200 a month. An $800,000 mortgage at 6% (good luck!) alone costs $4,800 a month. Assuming property tax and common charges of $1,000 a month each, that's $6,800 a month. Assuming common charges are fixed but taxes go down if the property price goes down, that $1,000,000 apartment would have to fall to $550,000 (a 55% decline) for it to equal rent(mortgage $2,600, cc $1,000, tax $600 = $4,200).

So, even in the IMPOSSIBLE situation that rents increase 20% a year, your hypothetical $1,000,000 one-bedroom would have to fall 55% in value for the two to cost the same out of pocket.

Do you see why it doesn't work?

No, JuiceMan, rents will not rise 20%, and even if they do, your 5%-10% scenario is actually 55%.

Sorry. That is what is happening in every other market where prices shot up beyond the fundamental support level. You should become a chartologist. Prices are already down 20% and still falling and inventories are still rising.

It's not doom-and-gloom. They're real numbers.

Sorry, 45%.

JuiceMan: steve, fuck off will you?

That's what I mean. I confront you with reality - it costs twice as much to buy as to rent - with real properties and real figures, and demonstrate with simple math exactly what your "numbers" mean in order for rents to be the same as owners' carrying costs, and you say, "Fuck off."

No, I won't. I asked you why you think what will happen will happen. The "figures" you've shown are (false) figures for "it's always better to rent than to buy." Not for this example. Where's the money coming from?

You're like a dot.com investor who's slowly watching the inflated value of his worthless stock fall and fall and fall, and keep on hoping that it'll recover as you ride the wave all the way down, only to never see it come up again. So instead of looking at reality like real investors do, you're limited to "fuck off."

LOL.

Where's that "massive buy signal" you were talking about to have investors flocking in to buy properties if they fall 10% in value, when even if they do they are GUARANTEED a long-term loss that will never be recovered, because they're getting half back in rent than they're paying for the pleasure of owning, while at the same time watching the value of their investment tank?

Do the math. There is no massive "buy signal."

Steve, ignore JuiceMan. We both know and other threads on this site confirm that he is vulgar, poorly educated and antisemitic.

JuiceMan might do well to watch his postings--or face deportation to spunky-ville.

I have been informed that the "Juice" in "Juiceman" is produced by I.G Farben, Frankfurt/Main.

11201962, this is just so, so obvious I can't believe that an otherwise intelligent person like JuicMan - expert as he is on corporate takeovers - doesn't just do a simple 1-minute calculation.

If I rent and it costs me $5, and you buy and it costs you $10, for us to meet halfway would mean that my rent would have to rise 50%, and your carrying costs would have to fall 25%.

But there is no way in hell that my rent can increase 50% since it's limited by my income, but there's every way for property prices to drop far more than 25%, because the fall is limited by nothing.

Nothing stops property prices from falling except people refusing to sell at realistic prices, which only leads to rising inventories.

Rising inventories? My, what a novel concept!

pearls
before
swine,
Steve.

Juicman why in the world would you ask renters like weasel boy and the one-eyed snake what they think. The one-eyed snake wants prices to go down so it makes his job easier to sell and he's hoping to buy a place on the cheap. He and weasel boy are renting so they love to see their rents go down as well. Asking Weasel boy's outlook on real estate is like asking Raymond in the movie Rainman what's his opinion of license plate number DT 52 52 -. Steve will just repeat over and over the same response. His obsessive, ritualistic behavior such as his fascination with rent vs buy ratios is nauseating. I wish Steve would just go back to what he enjoys like eating cheese balls with a toothpick and painting detailed pictures of Dead End streets.

STEVEJHX is in Mitchell Lama projects. That's where his superiority complex stems from - he beat the system!!! He beat the system!!!

Thanks, houser, for the compliment. Alas, your theory is wrong because not only do I rent, but I also own a property, and so am vested in any price fall.

You really didn't have to write anything beyond your "I wish," because that's all that you and JuiceMan can do: wish. Both of you are bizarre in your irrational exuberance, and when confronted with reality react unreally: with insults.

JuiceMan says "5-10%" reduction and a "modest" increase in rents before we reach the point where buying and renting cost the same. Alas, that leads to a 50% increase in rents and a 25% fall in property prices, but since rents can't rise faster than income (and aren't going up 50% in the short-term), property prices must fall by more than 25% to reach equilibrium.

Show me a person who would willingly pay twice for something as he needs to, and I'll show you a fool.

Thus: you and the JuiceMan WISH.

FYI, for my next birthday gift, I don't like cheese balls.

Wow, many hairballs came up when I read this. So Juice is an anti-semite and Steve a racist (or that is what I read).
11201962 ... that is pretty tough talk. But for all you who don't know what I.G. Farben is all about, well, its all about its successive companies today Bayer, BASF, AGFA and Hoechst (now Aventis), your friendly chemical and drug companies who earlier had created Zyklon-B poison gas used in the Holocaust.

see, stakan is another one. You should change your name to Miss Stakan, both about where I live, and what the real estate market reality is.

11201962, I've left you alone because you haven't addressed me, but you are a sad excuse for an individual and the only reason you are on this board is to kiss steve's ass (literally and figuratively). I may be vulgar in certain (justified) cases but I'm a no more anti-Semitic than steve is homophobic or racist (both baseless comments by the way). Uneducated is a funny one 11201962, because you couldn't get a job washing toilets at my firm and would have been laughed out of the educational institutions I excelled in.

steve is a pain in the ass but I respect him. You are waste of words, space, and have added zero value to any of these conversations. So why don't you go back to playing with your little white dog and living your mediocre life?

stevejhx is in Mitchell Lama projects. That's why he does not have to spend too much time working.

Also, stevej, how long are you going to rant about the RE market? Until the full rental de-regulation? That would be the day!

Well thank you for the respect, JuiceMan. I would like to know what figures you're using to come up with your prediction for a market correction, because it doesn't make sense to me.

No, stakan, I'm not in the Mitchell Lama projects, which aren't projects in any case. I live in a market-rate rental and pay $4,500 a month in rent a 2-br 2-ba unit in a new market rental building, that would cost me twice as much to buy in the new building across the street.

I'm not ranting, either - I'm just stating facts. If you think I'm wrong, then publish your own & we can look at them.

Actually, I'm posting today because I'm doing a tediously boring translation of administrative procedures in Brazil, and it's driving me crazy.

So you get some idea:

Dúvidas porventura existentes sobre o disposto no presente Edital e seus Anexos deverão ser objeto de consulta, por escrito no idioma português, à Comissão Especial de Licitação, na Coordenação-Geral de Programação e Logística da RFB, no endereço do item 3.1 deste Edital, até 5 (cinco) dias úteis anteriores à data de abertura da licitação, que serão consolidadas e respondidas, igualmente por escrito, após esgotado o prazo de consulta, por meio de circular encaminhada a todos os interessados.

or:

Any doubts that might exist on the provisions of this Resolution and its Appendices shall be subject to consultation, in writing in the Portuguese language, to the Special Bid Committee, and the RFB’s General Scheduling and Logistics Office, at the address in item 3.1 of this Resolution, within up to 5 (five) business days prior to the opening of the request for bid, which shall be consolidated and answered, likewise in writing, after the question period has been exhausted, through a circular sent to all interested parties.

55,000 words like that, which are going to be late.

OK stevej, THAT should do it! The man can translate from Portuguese, for god's sake - how uniquely right his insights must be about EVERYTHING!
You know, you can rent a lot of things from people who OWN them, and it's up to them whether to lend it to you or not.
And if you feel like throwing out $4500 a month - be my guest. I'm afraid to thing about it but I might be your landlord.
P.S. I speak (native fluency) four languages, although Portuguese is not one of them. But I don't have to abuse my mind with this inhumane administrative gibberish. Poor stevejhx. Doing that would probably turn anyone into you.

Miss Stakan, what are you talking about? Do you own B&L Properties? If not, you're not my landlord.

I'm not going to discuss your "throwing out $4,500" conceit, beyond saying that at today's market prices, it would cost me $9,000 a month for the pleasure of owning.

That's the math.

I'm glad you have native fluency in 4 languages. I do not. Just 2. The other two I speak fairly well, but the amount of time needed to enhance my fluency isn't worth it. I'm just happy to read them, and get by.

Get by at 12+ cents per word, that is, meaning that that little blurb earned me about $10, and it took about a minute to type.

My last to STEVEJ: even if your rent does not increase, you'll have paid $1620000 in 30 years of renting. More likely, with rent increases, you'll pay $1740000. To people who OWN your apartment.

I told you steve, my numbers are in some thread on this board. Go find it if you are so interested.

Rents look like they are increasing 5 to 10% this summer. Although I'm sure Raymond Babbitt (a.k.a. stevejhx) feels otherwise.

173 new listings yesterday. I think that is a record. How come the logic is the if too many people sell, rents will go up and drive prices up? How come all logic points towards higher prices. Does anyone else find this strange?

"11201962, I've left you alone because you haven't addressed me, but you are a sad excuse for an individual and the only reason you are on this board is to kiss steve's ass (literally and figuratively). I may be vulgar in certain (justified) cases but I'm a no more anti-Semitic than steve is homophobic or racist (both baseless comments by the way). Uneducated is a funny one 11201962, because you couldn't get a job washing toilets at my firm and would have been laughed out of the educational institutions I excelled in."

JuiceMan: You are a vulgar slob.

steve is a pain in the ass but I respect him. You are waste of words, space, and have added zero value to any of these conversations. So why don't you go back to playing with your little white dog and living your mediocre life?

11201962, You are a pathetic fool desperatly trying to win steve's heart on a real estate board. I would rather be vulgar.

didn't 11201962 invite Raymond Babbitt for a drink in fire Island?

Juiceman, how kind of you to have "left me alone." Streeteasy have refused--so far--to remove you from their roster but other parties are now being made aware of your postings and will surely add weight to my efforts.

Hey, what about real estate?

11201962, you are an idiot. You can't come on this board every few weeks, call someone anti-Semitic (unprovoked I might add), and then cry to streeteasy when I (rightly) tell you to piss off. I choose to ignore you because you add nothing to the conversation, but if you are going to make false and completely baseless accusations about me, I will not sit back and take it. Maybe by highlighting this conversation, streeteasy will recognize that you are the instigator with nothing better to do than hit on steve and start trouble with me. Now, how do you suppose that is going to "add weight to you efforts"?

"urban go peddle you negative crap some place else. Your a real estate agent who pretends he's an economist. Anyone ever tell you you look like a eye snake."

houser, you have officially replaced spunky as the dumb-ass moron of the board.

noah is one of the *few* respectable brokers out there. a rare case indeed. and he understands macro economic principles judging by his analysis backed by the data that is clearly documented in his site. what can you show as documented analysis based on data that enables you to proclaim that noah is a snake?

stop throwing your dim-witted diarrhea remarks around and stinking this place up.

the bottom line is that inventory has gone up, significantly so after discounting cyclical/seasonal market dynamics. clearly, that does not bode well as it is usually the precursor to price drops. we are basically at a stand-off between sellers and buyers, resulting in the buildup of available units for sale. there are other contributing factors as well, but as we have seen in the rest of the nation, what follows is the eventual capitulation by the sellers leading to price drops.

also, can we all just accept that FACT that renting a unit is SIGNIFICANTLY cheaper right now than the carrying costs of owning the same unit. this is NOT normal equilibrium and the market will adjust back to equilibrium- all markets adjust back to equilibrium, or completely fail/collapse. in the history of man-kind, there has never been an in-between.

stevejhx is in Mitchell Lama.
He also has undue influence on the streeteasy (legal threats?)
This post is an experiment.

JuiceMan:

I have reread your postings about the numbers on my arm. It is entirely possible that your words were meant in a "chat-room zap" way and that I misunderstood them upon first reading. I was not about to give them a second reading at the time.

It is also entirely possible that I do not understand "chat-room zapping"; I choose, however, to not understand it at this point.

JuiceMan: "I told you steve, my numbers are in some thread on this board. Go find it if you are so interested."

They don't exist.

if your rent does not increase, you'll have paid $1620000 in 30 years of renting. More likely, with rent increases, you'll pay $1740000. To people who OWN your apartment.
You will have built 100% equity in your property with that money in that time.

11201962, understood. I would prefer we put it all behind us and start fresh. I am willing to if you are.

Please, please, please, JM and 112!

Miss Stakan, you are mistakan about your calculations.

miss stevejhx: you said your rent is $4500
$4500 x 12(months)+$54000
$54000 x 30(years)=$1620000

stakan, what stevejhx will next post is his formula that essentially shows you the lost opportunity cost of the money spent to buy the apartment in the first place. he'll do this in an extraordinarily long post in which he'll discuss 12xrent and 28% earnings and 48xsomething and conclude you are a moron to buy now no matter what your goals or circumstances. i only post this in case you are heading out soon and want to respond ahead of time to what he'll write.

steve, at the end of 30 years, how much of that $1,620,000 do you get back?

JuiceMan: Thank you.

Miss Stakan, you're mistaken.

kylewest, not this time: I've posted the numbers before. I'll just say that the total interest on a 30-year mortgage at 7% is $1,395,088.98. Total taxes and maintenance assuming of $1,000 each per month, assuming they don't go up, is $1,440,000. $2,835,088.98.

If your $1.25 million house increases at real 0.07% per annum (historical average) after 30 years it will be worth $1,540,969.81. You will have paid $2,835,088.98 for an asset worth $1,540,969.81 (under very favorable assumptions), for a net loss of $1,294,119.17.

If my $250,000 down payment increases at 8% real per year (historical S&P 500), after 30 years I'll have $2,515,664.22. I'll have paid $1,620,000 in rent. I'll have a net profit of $895,664.22, versus your net loss of $1,294,119.17.

Yes, I know, the tax benefits. Should I add in how much it costs to keep a house, or how high the transaction costs are?

This wouldn't be the case if houses weren't overpriced by 100%. If they cost the same, then it would make no difference.

Raymond what about license place number DT 52 52. That's DT 52 52. increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average),increases at real 0.07% per annum (historical average)DT 52 52, That DT 52 52.increases at real 0.07% per annum (historical average)increases at real 0.07% per annum (historical average)increases at real 0.07% per annum (historical average)increases at real 0.07% per annum (historical average)

miss steve: there's no point to talk to a daltonic who believes that he sees the real colors. Just to put a lid on it: after all this money is paid, you'll have a 100% owned home to show for it. But keep renting, and after all this money is paid, you'll still have shit to show for it. The end.

houser - I found some great info on this board (renovation, decoration, ect.) before it got infested by you know what. I'll be checking back from time to time to see if the informational and helpful forum have returned. Until then, adieu.

But Steve, without focusing on any other part of the analysis you've shared before, why do you just toss in the "I know, the tax benefits" at the end as if it doesn't matter or it isn't an key part of any full analysis? The capital gains exemption (up to 1/2 million), the annual deductions. It makes the analysis you offer unusable, no? I'm admittedly not a numbers guy, but leaving that out makes me think the whole formula is suspect.

See houser: no real debate, just like the rest of the "bulls": ridicule.

stakan, "Daltonist" - color blind. What do you mean?

At the end you have a net loss of $1,294,119.17, because that's how much more you would have paid for the house you "own outright" than it's currently worth. I'll have $895,664.22 that at 8% real will yield me $71,653 per year, or almost $6,000 a month, which will more than pay the rent.

You'll have lost $3,600 a month over 30 years.

Do different math.

Steve, that deduction that you're not including is no small change. Plus, once you compound that amount by the 8% return your getting in the market, and you're talking about a large fortune. I am pretty bearish right now, but long term, I think you may be mistaken.

7,701 listings as of Sunday. Up from 7,628 on Saturday.

My, my, my. And I'm the Daltonist!

10,000 by the end of June. 90% of the layoffs haven't even started.

Most people have no idea that in the next 2-3 months that they will be unemployed. If you work on wall street chances are that you are the bread winner of the family. Without that large bonus many people or couples will have an almost impossible time making the mortgage. Many people on wall street are still waiting to see what happens.

We are now in a stage of irrational pessimism.

dco your forecasts have always been dead wrong in fact if anyone took the opposite position of your historical forecasts they would be very wealthy.

Wealthy today. Yes, and lots of people were in the dot.com boom. Wealthy then.

The fundamentals are inescapable. We are in for a major crash. Owning costs twice what it costs to rent, rents are falling.

There is only one way to go.

stevejhx this crash will be microscopic compared to whats going to happen in 2029. An ateriod the size of the state of Texas may collide with earth that year. It is forcasted to to be the largest global disaster that has ever happened, and scientists say with 100 percent certainty that it will happen. Please let me know the day before it happens if you were better off renting than owning. I'd also like you to review the day prior your rent vs own ratio's and the historical home appreciation stats as well.

houser, you're the new "banned" spunky.

Do the numbers, do the math, do the research.

Houser- You don't have a clue. If you looked at all my post you will see that I say time and time again that the MYC real estate market will see a drop of 20-30 in the next 12-18 months. If you mean that I'm wrong than I would agree. My first estimate of 12-18 months looks to be a bit conservative. Things are getting much worse faster. Perhaps 18 months is to long. You have made me re-think my early estimates. Rising inventories, credit tightening and wall street job lose not even in full swingmakes me think declines of 20-30% will come much sooner. I have already seen hundreds of properties down 10-15%. The outer boroughs are going to get crushed when this is all over.

So houser thank you for pointing out where I was wrong. I wish you luck in the hunt for your grossly overpriced property or your attempts to convince you clients that this is a great time to buy. Remember lack of morals always comes back to haunt you.

There is nothing "irrational" about looking at historical fundamental, crunching numbers, and trying to figure out what's happening.

It is plain: historically, rents = owners' carrying costs out-of-pocket. It has always been that way and was in NYC until 2004, when prices went through the roof, but rents stagnated. Now incomes are falling, and rents are falling, and inventories are rising dramatically.

It's a no-brainer: Rent my apartment for $5,000 a month, or buy it for $10,000 a month.

What? You're kidding, right?

But that's what owners are asking for.

Buying a home is a capitalized expense: all it does is give you the right not to pay rent. Therefore, it shouldn't cost more than rent, and never in the history of the world has it.

Suze Orman chimed in last night: this is going beyond 2010, and there's a least - in the nation - another 20% to fall, on top of the 20% that prices have already fallen. They haven't started here in NYC, where they rose later, but faster and higher. Rents did not.

houser's right, in a perverted sense: the only thing that can stop the market from crashing, is an asteroid.

dco, where have you seen "hundreds of properties down 10-15%"? I assume you mean 10-15% down from last years comps?

Juiceman- I'm refering to the original asking prices listed on the recently reduced sectionon this site.

dco you have your head so far up stevejhx ass your breathing through his nostrils.

dco, so that has nothing to do with last years comps right? Isn't that the only thing that matters?

Not that it will change anything, but steve and others: you're leaving something out of what drives the high-priced rental market: 20-somethings whose leases are cosigned and guaranted by their parents. This trumps their wages in qualifying them for apartments. So you have to be a little careful of saying that an apartment that rents for X requires an income of X multiplied by 40 or 52. I think the formula is something like X times 90, but for the co-signer's income. Anecdotally, the Midtown building I rented in has reduced its rents and is paying broker fees; however, those rents before the reduction had spiked last summer, and the new rents are still higher than two years ago. Parents' money is not helping the landlord side, because it was already a factor.

lowery, true, but typically a guarantor must have 80x monthly rent in income, and it's not quantifiable how many such people there are. I I were a parent I'd tell my kids to live in Queens.

JuiceMan- I look at these numbers because last year at this time people were getting above asking. This just illustrates how much the market has changed. I do also consed that many of these asking prices were high to begin with, however if this was the norm at the height of the market than it's fair to use them as a comparison.

Last year all the bulls were screaming that this was never going to end. Story after story of how properties were getting multiple bids over asking. Now they want to say you can't compare the same things they did when bragging over the last few years. The quickest was to lose credibility is to lie in the face of overwellming evidence just to bolster your objective.

My objective? My only objective is to point out gross exaggerations such as "I have already seen hundreds of properties down 10-15%". You have seen squat. Basing your "research" on price reductions in streeteasy (have you ever actually been to an open house?) is silly. When you "see" some real price erosion based on last year comps, let us know, it would be interesting. Until then, you are nothing more than chicken little.

I have been to several OHs each week over the past few weeks.

I always ask the broker, "So, what is your sense of the market?" This week, for the first time, I consistently got responses from brokers about the new reality, aggressive pricing, etc.

In prior weeks, some brokers would admit this, but others would only say "Oh, things stay on the mkt longer, but prices are holding steady", or something similar. Some would say, at this price, it'll go fast. Well everthing I have seen is still available, and some have even been price-chopped.

I think brokers are realizing that buyers are too savvy and informed now, and they only look stupid by trying to say everything is fine.

JuiceMan, I'm still waiting for that "overwhelming buy signal" when housing prices fall to 17x annual rent from the current 18x, when the historical norm (and 40x/28%) force the ratio to be 12x.

Let us look at rising inventories.

Where's Spunky?