Because many of us invest directly through brokerage accounts, we know what our holdings are and can calculate our net worths on a daily basis. One thing to bear in mind is that there is a significant amount of NYC wealth tied up in hedge funds. This is the money that traders, bankers, fund managers, high net worth individuals, etc., have parked with all of their hedge-fund manager friends (many... [more]
Because many of us invest directly through brokerage accounts, we know what our holdings are and can calculate our net worths on a daily basis.
One thing to bear in mind is that there is a significant amount of NYC wealth tied up in hedge funds. This is the money that traders, bankers, fund managers, high net worth individuals, etc., have parked with all of their hedge-fund manager friends (many of whom, by the way, had a limited history managing money). Alternative investments have not only grown exponentially in the past 5 years, they were in vogue. It was hip to have invested in hedge funds - great cocktail party talk.
The key differences between investing in a hedge fund and investing in mutual funds (or even stocks directly) are:
(1) Leverage, leverage, leverage. Hedge funds have historically been able to leverage up as much as 10:1 to boost their earnings.
(2) Lack of transparency. On balance, hedge fund investors really have had little idea as to how their funds were invested, and delayed visibility on returns.
(3) Inability to sell when you want, and a 45-90 day delay on redemption requests.
What's going on now in real time is the systematic destruction of hundreds, if not thousands of hedge funds. My guess is the redemption requests have shot up astronomically this quarter. Couple that with margin calls and prime brokers' liquidation of their hedge fund clients holdings (without regard to price). To have come into this quarter net long and leveraged was a death sentence.
I have no idea how many hedge funds will meet their maker come November/December, but the list is gonna be long. At the same time, many many hedge fund investors are going to find out at the end of the quarter or sooner that their investments have been decimated. The market's down 20-25% over the past few weeks. Imagine that with leverage. The wealth destruction is going to be staggering.
Going out on a limb, but I don't think this is a net plus for real estate in the region
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Response by stevejhx
over 17 years ago
Posts: 12656
Member since: Feb 2008
"Going out on a limb, but I don't think this is a net plus for real estate in the region."
Manhattan real estate only ever goes up.
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Response by alanhart
over 17 years ago
Posts: 12397
Member since: Feb 2007
"Manhattan real estate only ever goes up."
It's true. That's why tomorrow's NYT RE section has a feel-good story about bidding wars. Keep moving people, nothing to see here.
AT a time when you might think the entire Manhattan real estate market had jumped off the Brooklyn Bridge, some buyers and sellers have been engaging in that old-fashioned Manhattan pastime: the bidding war.
Though some brokers say the market remains in a pause while buyers assess the faltering economy, others have been able to close deals in every segment of the market, and even on days when the stock market has been plummeting. After all, people have to live somewhere, don’t they?
On Sept. 29, the day the House of Representatives first took up and rejected a $700 billion economic rescue plan, Randolph D. Lerner, the owner of the Cleveland Browns of the National League Football League, closed on a 1,730-square-foot two-bedroom Greenwich Village co-op at 15 West 11th Street for $4.06 million, according to city property records. That was $100,000 over the asking price, enough for Mr. Lerner to clinch the deal over an art dealer with a competing bid, according to Jan Hashey, a broker at Prudential Douglas Elliman.
The seller was Jason Mutchnick, the television producer who created “Will & Grace.” According to Streeteasy.com, that apartment went into contract in August.
Also on Sept. 29, as the stock market fell by more than 770 points, Sarah Parsons, a broker with the Corcoran Group, waited anxiously, not for the stock ticker, but for a buyer to meet with his lawyer that afternoon and sign a contract for a one-bedroom in a 20-foot-wide brownstone in Park Slope.
The sellers, Kara R. Finck, a lawyer providing legal services to the poor, and her husband, Mark Humowiecki, a special counsel to the Workers’ Compensation Board, had put their 800-square-foot apartment on the market after Labor Day for $535,000, because they needed a larger apartment after the birth of a child.
The apartment, at 55 Montgomery Place, was priced right and had some special features that helped it sell quickly, Ms. Parsons said, including a private rear garden on a quiet town house street, a few doors from Prospect Park.
After two open houses, she said, there were three bids, including two over the asking price. But Ms. Parsons said that “in this environment,” the sellers chose the offer at the asking price, because the buyer, an Internet sports journalist, offered to pay cash (with some help from his family).
“If you have two or three things that are fantastic and unusual, even in this horrible market, there are some things that can sell quickly,” Ms. Parsons said. After the buyer signed, Ms. Finck and her husband made an offer for a larger apartment on the same block; their bid was accepted.
On Tuesday, when the stock market fell more than 500 points, a third-floor walk-up in a town house at 348 East 89th Street went into contract for just over the $499,900 asking price, according to Brian Lewis, a broker at Halstead Property. Mr. Lewis said that the condo needed renovation, and that the seller had agreed to “price it provocatively.”
There were 28 buyers at the first open house and almost as many at a second one, he said, and soon afterward there were two “bona fide offers,” both over the asking price, one from an investor and the other from a person who planned to renovate and live there.
Mr. Lewis said that the seller wanted to choose a buyer based on financial strength and ability to close, rather than price. In the end, the seller chose the individual buyer, after Mr. Lewis was allowed to interview the man’s mortgage broker.
“He is a professional, not in the financial field, with good job longevity,” he said.
Quick deals are not limited to lower-priced properties. A duplex penthouse at 1185 Park Avenue went on the market in mid-September, after the fall of Lehman Brothers, with an asking price of $20 million. It had been the home of Kitty Carlisle Hart, the entertainer and grande dame, who died in April, and Moss Hart, the Broadway playwright.
Brokers said that by the middle of last week, the internal listing at Brown Harris Stevens, which was held by Katherine P. Marshall, showed an “accepted offer” on the property, though a contract had not yet been signed.
“I am getting bids all day long,” said Paula Del Nunzio, a Brown Harris Stevens broker.
E-mail: bigdeal@nytimes.com
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Response by faustus
over 17 years ago
Posts: 230
Member since: Nov 2007
You gotta love the NYT!! They will never let their friends at Corcoran down.
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Response by Colgin
over 17 years ago
Posts: 79
Member since: Apr 2007
Look, I don't doubt the veracity of these particular NY Times stories about specific bidding wars. But to run such an article in light of recent economic developments and the quite clear downward trajectory of NY real estate is really effed up IMHO. Do you think they will have a story soon on properties that have lingered on the market for over a year notwithstanding numerous price cuts? If they can't identify such properties I and others on this board can easily help them out. (And I write this as an owner who would love the NYT's shilling to be able to sustain the market; of course it won't.)
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Response by EAO
over 17 years ago
Posts: 146
Member since: Aug 2007
The New York Times real estate section is so biased it is a joke. It’s no wonder that the paper is having such financial problems when they no longer present an accurate, unbiased view of the world ( real estate included ).
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Response by will
over 17 years ago
Posts: 480
Member since: Dec 2007
Funny how certain people criticize the media one day for talking down the economy and the next for talking it up. I guess it is what it is, but I do not think the journalists who write for the NYTimes have much of a stake in high real estate prices in Manhattan.
Face it, Manhattan real estate is a strong asset that can withstand a lot of challenges. Could be that there will be declines given the horrible state of the overall economy, but so far, things are holding up, and they may keep steady as the economy steadies. Again, I think median prices will decline, but I think declines will be much shallower than the bears are predicting and relatively short lived. In the meantime, it will be a buyers market for a while.
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Response by faustus
over 17 years ago
Posts: 230
Member since: Nov 2007
"In the meantime, it will be a buyers market for a while."
When the last hold-out staunchest of bulls make comments like this, you know the market's going to be brutal - for a long time.
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Response by will
over 17 years ago
Posts: 480
Member since: Dec 2007
Oh Faustus, check out my earlier posts, even early in the year. I have said there would be a decline before. I just think it will be shallow and short lived, and have suggested that buyers be extremely aggressive in negotiating. There was another article in the NY Times about this today.
I have to admit that I never thought things in IB would be as bad as they have been, and that will have impact, but I think that things will hold up well in the medium and long term (3-5-15 years). Could be we'll have a few rough quarters but things will come roaring back in the next three to five years.
It's all about selling toothpaste (ads). They provide the nice supportive editorial content and the sellers provide the ad revenues.
The buyers are a fickle lot, though, and increasingly empowered by the Internet. They get the content wherever it's best.
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Response by stevejhx
over 17 years ago
Posts: 12656
Member since: Feb 2008
"I do not think the journalists who write for the NYTimes have much of a stake in high real estate prices in Manhattan."
See Topper's comment. It was even stated by the editor.
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Response by mh23
over 17 years ago
Posts: 327
Member since: Dec 2007
Good point, faustus. Yet another example of the herd mentality leading people off of a cliff. People, even wealthy people, are most often lazy and uninformed. They are mentally weak and afraid to think for themselves. They care about bullshit like what the guy on the fifth floor thinks about their watch. However, they are the necessary idiots that created the wealth that was available for people who sold their units at the appropriate time. Now it is time to start the whole party again, only this time it is with stocks, bonds, and and collectibles. What we saw, beginning last week, was the forced liquidation of assets. Those moves creat their own downward spirals. When the dust has cleared, wealth will once again have transfrerred from weak to strong hands.
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Response by nyc10022
over 17 years ago
Posts: 9868
Member since: Aug 2008
Go to the nytimes.com web site now.
(seriously).
Look at the menu.
See where real estate is? Its next to CLASSIFIEDS and AUTOS.
There is a line separating it from the NEWS sections.
Its not journalism, its a section built to put ads in....
THESE ARE NOT JOURNALISTS....
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Response by rufus
over 17 years ago
Posts: 1095
Member since: Jul 2008
NY Times stopped being a serious newspaper long time ago. It's now devoted to 2 goals: pumping up overpriced NYC real estate and helping the radical socialist, Barack Obama, become president.
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Response by mimi
over 17 years ago
Posts: 1134
Member since: Sep 2008
Radical socialist! Really!
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Response by rufus
over 17 years ago
Posts: 1095
Member since: Jul 2008
mimi, read about Obama's tax plan that will redistribute wealth and his associations with radical groups like ACORN that is committing massive voter fraud.
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Response by crescent22
over 17 years ago
Posts: 953
Member since: Apr 2008
Taking the square footage quotes at face value (a faulty assumption), the 500k price on 348 E 89th is below $800 per; 2 previous apartments in the same building both went for 900+ in late 06, early 07.
To be realistic, that's progress.
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Response by Topper
over 17 years ago
Posts: 1335
Member since: May 2008
Wow, rufus, I'm shocked to learn this. Thanks for the tip!
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Response by lowery
over 17 years ago
Posts: 1415
Member since: Mar 2008
Obama, isn't he from Chicago?
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Response by nyc10022
over 17 years ago
Posts: 9868
Member since: Aug 2008
He's from Hawaii, but he moved to Chicago because thats where he found the most poor people to help (and organize). And corruption, too.
> NY Times stopped being a serious newspaper long time ago.
Does Chicago have any papers?
I know there was the one that Balki worked at...
"Going out on a limb, but I don't think this is a net plus for real estate in the region."
Manhattan real estate only ever goes up.
"Manhattan real estate only ever goes up."
It's true. That's why tomorrow's NYT RE section has a feel-good story about bidding wars. Keep moving people, nothing to see here.
http://www.nytimes.com/2008/10/12/realestate/12deal2.html?ref=realestate
Like Old Times (Almost)
By JOSH BARBANEL
Published: October 10, 2008
AT a time when you might think the entire Manhattan real estate market had jumped off the Brooklyn Bridge, some buyers and sellers have been engaging in that old-fashioned Manhattan pastime: the bidding war.
Though some brokers say the market remains in a pause while buyers assess the faltering economy, others have been able to close deals in every segment of the market, and even on days when the stock market has been plummeting. After all, people have to live somewhere, don’t they?
On Sept. 29, the day the House of Representatives first took up and rejected a $700 billion economic rescue plan, Randolph D. Lerner, the owner of the Cleveland Browns of the National League Football League, closed on a 1,730-square-foot two-bedroom Greenwich Village co-op at 15 West 11th Street for $4.06 million, according to city property records. That was $100,000 over the asking price, enough for Mr. Lerner to clinch the deal over an art dealer with a competing bid, according to Jan Hashey, a broker at Prudential Douglas Elliman.
The seller was Jason Mutchnick, the television producer who created “Will & Grace.” According to Streeteasy.com, that apartment went into contract in August.
Also on Sept. 29, as the stock market fell by more than 770 points, Sarah Parsons, a broker with the Corcoran Group, waited anxiously, not for the stock ticker, but for a buyer to meet with his lawyer that afternoon and sign a contract for a one-bedroom in a 20-foot-wide brownstone in Park Slope.
The sellers, Kara R. Finck, a lawyer providing legal services to the poor, and her husband, Mark Humowiecki, a special counsel to the Workers’ Compensation Board, had put their 800-square-foot apartment on the market after Labor Day for $535,000, because they needed a larger apartment after the birth of a child.
The apartment, at 55 Montgomery Place, was priced right and had some special features that helped it sell quickly, Ms. Parsons said, including a private rear garden on a quiet town house street, a few doors from Prospect Park.
After two open houses, she said, there were three bids, including two over the asking price. But Ms. Parsons said that “in this environment,” the sellers chose the offer at the asking price, because the buyer, an Internet sports journalist, offered to pay cash (with some help from his family).
“If you have two or three things that are fantastic and unusual, even in this horrible market, there are some things that can sell quickly,” Ms. Parsons said. After the buyer signed, Ms. Finck and her husband made an offer for a larger apartment on the same block; their bid was accepted.
On Tuesday, when the stock market fell more than 500 points, a third-floor walk-up in a town house at 348 East 89th Street went into contract for just over the $499,900 asking price, according to Brian Lewis, a broker at Halstead Property. Mr. Lewis said that the condo needed renovation, and that the seller had agreed to “price it provocatively.”
There were 28 buyers at the first open house and almost as many at a second one, he said, and soon afterward there were two “bona fide offers,” both over the asking price, one from an investor and the other from a person who planned to renovate and live there.
Mr. Lewis said that the seller wanted to choose a buyer based on financial strength and ability to close, rather than price. In the end, the seller chose the individual buyer, after Mr. Lewis was allowed to interview the man’s mortgage broker.
“He is a professional, not in the financial field, with good job longevity,” he said.
Quick deals are not limited to lower-priced properties. A duplex penthouse at 1185 Park Avenue went on the market in mid-September, after the fall of Lehman Brothers, with an asking price of $20 million. It had been the home of Kitty Carlisle Hart, the entertainer and grande dame, who died in April, and Moss Hart, the Broadway playwright.
Brokers said that by the middle of last week, the internal listing at Brown Harris Stevens, which was held by Katherine P. Marshall, showed an “accepted offer” on the property, though a contract had not yet been signed.
“I am getting bids all day long,” said Paula Del Nunzio, a Brown Harris Stevens broker.
E-mail: bigdeal@nytimes.com
You gotta love the NYT!! They will never let their friends at Corcoran down.
Look, I don't doubt the veracity of these particular NY Times stories about specific bidding wars. But to run such an article in light of recent economic developments and the quite clear downward trajectory of NY real estate is really effed up IMHO. Do you think they will have a story soon on properties that have lingered on the market for over a year notwithstanding numerous price cuts? If they can't identify such properties I and others on this board can easily help them out. (And I write this as an owner who would love the NYT's shilling to be able to sustain the market; of course it won't.)
The New York Times real estate section is so biased it is a joke. It’s no wonder that the paper is having such financial problems when they no longer present an accurate, unbiased view of the world ( real estate included ).
Funny how certain people criticize the media one day for talking down the economy and the next for talking it up. I guess it is what it is, but I do not think the journalists who write for the NYTimes have much of a stake in high real estate prices in Manhattan.
Face it, Manhattan real estate is a strong asset that can withstand a lot of challenges. Could be that there will be declines given the horrible state of the overall economy, but so far, things are holding up, and they may keep steady as the economy steadies. Again, I think median prices will decline, but I think declines will be much shallower than the bears are predicting and relatively short lived. In the meantime, it will be a buyers market for a while.
"In the meantime, it will be a buyers market for a while."
When the last hold-out staunchest of bulls make comments like this, you know the market's going to be brutal - for a long time.
Oh Faustus, check out my earlier posts, even early in the year. I have said there would be a decline before. I just think it will be shallow and short lived, and have suggested that buyers be extremely aggressive in negotiating. There was another article in the NY Times about this today.
I have to admit that I never thought things in IB would be as bad as they have been, and that will have impact, but I think that things will hold up well in the medium and long term (3-5-15 years). Could be we'll have a few rough quarters but things will come roaring back in the next three to five years.
http://www.nytimes.com/2008/10/12/realestate/12cov.html?_r=1&ref=realestate&oref=slogin
NYT Real Estate Section
It's all about selling toothpaste (ads). They provide the nice supportive editorial content and the sellers provide the ad revenues.
The buyers are a fickle lot, though, and increasingly empowered by the Internet. They get the content wherever it's best.
"I do not think the journalists who write for the NYTimes have much of a stake in high real estate prices in Manhattan."
See Topper's comment. It was even stated by the editor.
Good point, faustus. Yet another example of the herd mentality leading people off of a cliff. People, even wealthy people, are most often lazy and uninformed. They are mentally weak and afraid to think for themselves. They care about bullshit like what the guy on the fifth floor thinks about their watch. However, they are the necessary idiots that created the wealth that was available for people who sold their units at the appropriate time. Now it is time to start the whole party again, only this time it is with stocks, bonds, and and collectibles. What we saw, beginning last week, was the forced liquidation of assets. Those moves creat their own downward spirals. When the dust has cleared, wealth will once again have transfrerred from weak to strong hands.
Go to the nytimes.com web site now.
(seriously).
Look at the menu.
See where real estate is? Its next to CLASSIFIEDS and AUTOS.
There is a line separating it from the NEWS sections.
Its not journalism, its a section built to put ads in....
THESE ARE NOT JOURNALISTS....
NY Times stopped being a serious newspaper long time ago. It's now devoted to 2 goals: pumping up overpriced NYC real estate and helping the radical socialist, Barack Obama, become president.
Radical socialist! Really!
mimi, read about Obama's tax plan that will redistribute wealth and his associations with radical groups like ACORN that is committing massive voter fraud.
Taking the square footage quotes at face value (a faulty assumption), the 500k price on 348 E 89th is below $800 per; 2 previous apartments in the same building both went for 900+ in late 06, early 07.
To be realistic, that's progress.
Wow, rufus, I'm shocked to learn this. Thanks for the tip!
Obama, isn't he from Chicago?
He's from Hawaii, but he moved to Chicago because thats where he found the most poor people to help (and organize). And corruption, too.
> NY Times stopped being a serious newspaper long time ago.
Does Chicago have any papers?
I know there was the one that Balki worked at...
Ignoring comment by rufus