Tis July. The blood won't flow until just prior to bonus vesting. End of 3rd quarter? It will be interesting to see how many wizards doubled down with their money and poured it all into real estate speculation. I'd guess the number to be somewhat higher than 100% as these geniuses probably used creative leverage in their own portfolios.
We are doubling the cost of just about everything we spend money, food, fuel, insurance, shipping, input costs like chemicals ect... and wages remain stagnant while jobs being slashed.....it will be an accomplishment if we will be able to afford shelter if this trend continues.
Now banks by lowering credit limits are lowering credit scores....so now the cost of borrowing money is skyrocketing.
With the consumer being about 2/3 of the economy.....a dead consumer is a dead economy.
Just between Ford and GM there are hundreds of Billions of bonds outstanding....something approaching 5% of our national debt. You think with revenues down 30% in one year....that debt will be serviced? You think our pension plans and retirement accounts might feel some pain?
Now what happens if state and local taxes fall 30%....how many muni bonds are there outstanding?
The job losses are a just a symptom of much larger credit problems ahead.
Re: "Sebolka said he will go to court if his assessment isnt dropped to $319,000 during a formal appeal.
His new appraisal is dated Jan. 1, 2008 the date on which the new values are based though he pointed out the state-certified appraiser noted on the appraisal that the local real estate market has gone down 8 percent to 10 percent since then.
If they disallow the appraisal value and go by their own calculations, Ill be in court. If I have to take it to the Supreme Court, I will, Sebolka said.
Sebolka said hes upset that the reassessment company posted key information about the property descriptions on its Web site after property owners in the first batch had already held their informal reviews.
That information dealt with the quality and condition of each property, which are among the nine key factors the company used to value properties.
Sebolka said he knows of property owners who have since received reductions in informal reviews by arguing that their quality and condition are not in line with other homes in their neighborhood."
To his credit, Los Angeles County Assessor Rick Auerbach announced earlier this year that his office completed a decline-in-value review of the homes most likely to be affected by the declining real estate market - those purchased between July 1, 2004, and June 30, 2007. As a result of this blanket lowering of assessed values, the average property taxpayer will see a $750 savings on his October property tax bill.
Assessors in the five-county Los Angeles area are now in the process of cutting property taxes on more than half a million homes because of plunging home values. Notifications will go out this month and next to lucky homeowners.
Because the market value of most homes sold before 2004 increased far more than 2% annually in the first part of the decade, those properties are probably still worth more than their taxable value, even when the recent slump is considered.
But if you believe your home's taxable value is too high -- no matter when you bought it -- you can request a review from the county appraiser. And if that fails, you can file an appeal with county's assessment appeals board.
"We can make a mistake," said Orange County Appraiser Webster J. Guillory. "But if we do make a mistake, just share your information with us and we'll work it out together."
Go ahead, protest your taxes. You might save a few bucks for a year. In aggregate, the taxing authorties will simply raise the levy.
I've been protesting real estate taxes for 40 years, off and on. Probably saved at most $10,000. Property taxes where I live were 1.35% in 1974. Today on increased values? 2.67%.
It doesn`t matter that much what kind of ROI you are going to get as long as you can sell it next year for 50% more than what you paid. Just hang in there! LOL
"The new elite "my house is worth less than your house""
Bwahahahahahahaahha! I rented during the bubble...bought this REO in your neighborhood for $200k less than the last one did. How's that Ramen neighbor...he says flipping a filet mignon on the previous owners nicely HELOC added outdoor kitchen.
Newyork craigslist shows a few thousand "one month free" listings, and a few hundred in brooklyn (on not-so-high end places).
Look for it to get worse and move into mid-price mkt rentals - many of the condos rushed into completion in NYC will go rental, and there are just not enough people that can pay 3K rent to fill them. (Mr. Bednar is absolutely right tho-it is still on the cheap side compared to owning in Manhattan)
The quality of life in these buildings will start to get, um, interesing when people start to double and triple- and quadruple-up in them to make the rent. Woe are the handful of hapless condo owners in a buidling gone mostly rental...
And yet, and yet.... the "luxury condo" complex down the way from me is selling moderately well. But the reasons I can discern all play into the kind of economic and real estate issues we've discussed here:
1) It was marketed to olders, just pre-boom, who are downsizing from their larger homes for their old ageand have cash-out money to spend.
2) It is in a very desirable and central downtown neighborhood. They can walk to most things, drive in five minutes to most other things. A local and regional transit hub is ten minutes on foot with direct express buses to the Silicon Valley.
3) This a desirable area to live and retire in, period. Yet not nearly as expensive as San Francisco (and yet not too far from it for excursions).
So well-heeled oldsters who've dumped their houses at a profit out in the 'burbs are moving into high-density housing near the city center. Whoever dreamt this up turned out to have the right idea for the right time.
What's amazing about these concessions is that summer in NYC is ALWAYS the most expensive time to rent. Newbies are moving in, others are at the end of their leases and trying to move up, etc. It seems like there is a major problem at the top of the NYC rental food chain.
Broker writes:
"My house is worth less than your house". I just love American humour! Now I got to go and change my shirt.(and better wipe off my desk too)
Broker | 06.28.08 - 10:11 am | #
LOL. Me too.
I though only white trashers like 'my people' bragged about how shitty their digs were - hooocoodanode we were the real trend setters.
Yoringe, you shouldn`t have knocked down that wall. Greenspan got all confused after that. He still is.
P.S. I love Dresden. Even during the commie years there was something special about it. One day I might retire over there.
Damn, the air quality in Manhattan must incredible to justify those numbers.
The mortgage and maintenance on the same apt. would probably be $5K to $8K /mo. So that's a pretty good deal.
This also illustrates why NYC home prices have a long way to fall in terms of rent to own ratios. (Since rents are not going up to meet prices.)
What about seminars for people to reverse engineer valuations and to help people find ways to lower values by making properties look tainted and toxic during periods of appraisal. CR has offered some fine examples of people remodeling as they go into foreclosure, but this is more of a sub-niche where you still want your house, you just don't want property taxes to be too high. I see lemonade opportunities in this this era of subprime lemons --
Doesn;t matter if your in a nice new York condo or in LA, we can help you, lower your property tax value and in many cases, lower your liability to zero and even have the county give you a check. Think of it, while your neighbors are paying over-valued property taxes, you could be sitting by your mailbox waiting for a refund from the assessor. call 1800-lowtaxes
One big problem is that it's probably the lower end that gets hurt hardest. We've had layoffs at our firm but while these people have made bets with other people's money, they've been pretty savvy with their own. Quite a few are just deciding to retire. Nannys are being let go. People are moving out of the city. Restaurants are dropping things like lunch hours. It's the bottom that will be hurt most.
Here is another recent article on NYC condo and rental market. I'm sure it will seem very familiar in tone to all CR readers.
The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April, according to the most recent research from appraisal company Miller Samuel. From February to March the increase was 4.8 percent, Miller Samuel data indicate.
And
Buyers are taking much longer to make their decisions, and there is a large amount of insecurity and concern today [due to the] recession, economic slowdown and job security," said John Harhay, a vice president and sales manager at Manhattan Apartments.
"Many properties are still being priced too high," said David Cooper, a vice president on the Jacky Teplitzky team at Prudential Douglas Elliman. "Most sellers believe their properties are actually worth more than they really are."
Anecdotally, I am seeing a lot of "For Rent" signs in Washington, and am seeing some incentives as well, though not quite as generous. Washington doesn't have the job losses (yet; we'll see what the new President and Congress does), but there is a huge overhang of unsold condos. My guess is that condo rentals are pressuring the high end of the rental market, and the pressure is starting to be felt in the mainstream rental market.
Unfortunately, it doesn't help me much--I'm tempted to play hardball when my lease comes up for renewal, but I'm in a rent-stabilized building that I suspect is slightly below market. I will push back if they try and raise rents on me, however.
"American 'meltdown' reason for money injection Fortis.
28th of June, 9:10
BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US"
Original press release:
VOTRON BLIJFT AAN NA GOLF VAN KRITIEK
Amerikaanse 知eltdown・reden geldinjectie Fortis
28 Jun 08, 09:10
door onze correspondent
BRUSSEL/AMSTERDAM (DFT) - Fortis rekent binnen enkele dagen tot weken op het volledig instorten van de Amerikaanse financi・e markten. Dat verklaart volgens de bankverzekeraar de serie ingrepen van donderdag om zich met €8 miljard te versterken. Цe zijn op het nippertje gereed. Het gaat in de Verenigde Staten veel slechter dan gedacht・ zegt Fortis-chairman Maurice Lippens, die volhoudt dat topman Votron aanblijft. Fortis verwacht faillissementen onder 6000 Amerikaanse banken die nu weinig dekking hebben. Мaar ook Citigroup, General Motors, er begint een complete meltdown in de VS.・"
It's not authentic without a couch thrown out there too, and probably a refrigerator. Never know when you're going to want a cold one while you're relaxing on the make-shift porch.
I will push back if they try and raise rents on me, however.
Peripheral Visionary | 06.28.08 - 10:52 am | #
Our lease is coming due soon (Richmond, VA), and we'd like to push back, too. Any recommended strategies? Haven't been a renter in a while, so I'm rusty. TIA
Be sure you factor in the cost savings of not having to own two cars (cost of vehicle, gas, insurance, maintenance).
still not even close. I hear the same thing every day about San Francisco. Most people underestimate the true costs of car ownership, but it still is (or can be) quite cheap.
Our ENTIRE living expenses (PITI payment, insurance, food, car insurance, gas, car maintenance, home maintenance, landscaping and gardening stuff, gas, clothes, and even 3 vacations per year that involve flying etc etc etc) is $4400/month. For everything. we live in a 1600 sq ft house (plus 350sq finished basement) in the "Uptown" neighborhood of Mpls (can walk to almost everything, very desireable) and we have 2 cars for work
The only thing that's not included in that $4400 is
-we buy our 2 cars with cash. we get new cars every 10 years or so. Usually we spend around $10k-13k. This time we both splurged on a 3 yr old Lexus and 2 yo Infiniti, cost was $28,000 and $22,500. we'll have these cars for 10 years.
-some years we take a "big" vacation. this year it was Paris and London for two weeks. Total cost: $5500.
-not including big vacation and car purchases we have added maybe $5k to our "expense" account in the last 5 years. we don't spend a dime that doesn't go through our "expense" account. (I seem to have married a wanna-be IRS tax accountant or something).
NYC is simply very very very expensive. As is SF and other places. After a while people who live there get numbed as to how expensive it is.
I used to work for a shipwright. Had a wooden dory I was working on in the yard for almost a year. The neighbors didn't seem to mind, though -- they were just curious to see a chick doing the work.
What I REALLY need is a wooden cable spool, that I can fancy up with an Old Grandad bottle with a candle in it over the central hole, and some velvet for the top side, to use a front yard card table.
Misean, please. You don't NEED that. It's a WANT. Save up the cash from hocking something - don't use your cc. That's what got us into this mess. Yeah, it'll pay for itself when it drives the value of your property up, but do you really want to sell soon?
Have a friend in corp finance at Goldman. Smart, Harvard B school, good earner... He purchased his new apartment last fall... must have paid around $2 mil.
Similarly, guess when the Empire State Building, the Chrysler Building, the "new" Waldorf Astoria, etc, were finished? 1930-1931. Whoops.
Bob_in_MA | 06.28.08 - 11:04 am | #
Good point. Never thought of that. Ah, the Chrysler.
Our ENTIRE living expenses (PITI payment, insurance, food, car insurance, gas, car maintenance, home maintenance, landscaping and gardening stuff, gas, clothes, and even 3 vacations per year that involve flying etc etc etc) is $4400/month.
YTL, I don't know how you're getting that # so low. And including vacations? I'd love to see that itemized on paper. Here in NH even, that's near impossible.
We live in a 2-bedroom coop in NYC in a building mostly paid for with 5 shifts of staff/day. We pay $15,000/yr common charges. Most good owned apartment RE,especially in Manhattan
is in coops. The building as a whole are owned by a tenants corperation and run by a board. Most are fairly to extremely tightly controlled so subletting is tightly controlled. Sales need Board approval. New owners are usually financially etc.screened
This market is fairly isolated from the Condo and rental markets.
Broker
If you're ever in the neighborhood, I've got a flat @ 22 Kutuzofsky Prospect I can rent you. Short trollybus ride to Tverskiya. At $150/night, best deal in Moscow.
NYC co-ops should be nice. I heard in the last year for some of the nicer ones you had to have 2X purchase price to even be considered to be able to buy. The old 200% downpayment.
When landlords offer those free months' rent specials, that means they are betting the market will be better for them next year. The way it works is, they "pro-rate" the free month or two of rent, lowing your rent to a sensible amount. Then at the end of your lease, the free months and/or discounts are not included, effectively raising your rent. This happened to us, and they tried to raise our rent on top of it even though they had a high vacancy rate. We called them on it and they backed down immediately.
If the market is on your side, you don't have to do much to challenge your landlord. Say you'll move, if they have empty units they will back down. If they don't have empty units then the market may not be on your side.
Here in the DC suburbs, landlords are trying to hold the line on rents even as tens of thousands of condos go rental, sitting on a lot of empty units.
Well, my rent in Flatbush went up, but it looks like the area is starting to gentrify a little. If I'm still here in a year maybe I'll be able to find something better for less money.
Ross, like I mentioned before, in the 80s a 2 bed. apartment in Moscow cost $1,000. Something is wrong with this picture. Also a couple of months ago I was in Austria (airport) and they wouldnt take $.(I had to go to the exchange office and get euros).
P.S. Thank you for the offer, but I have a lot of friends in Moscow and you know how the Russians are. The only problem is, I always end up with a hangover for the first couple of days.
$3000 a month for a Manhattan apt will get you a 650-800 sq ft, lower end one bedroom. (one bd non-doorman avg about 3K - Doorman avg about $3800). So far they are not dropping fast enough (if at all) and council just approved the highest rent increase in history (mostly hitting the DIRT CHEAP rent controlled units I would think).
We live in a 2-bedroom coop in NYC in a building mostly paid for with 5 shifts of staff/day. We pay $15,000/yr common charges. Most good owned apartment RE,especially in Manhattan
is in coops. The building as a whole are owned by a tenants corperation and run by a board. Most are fairly to extremely tightly controlled so subletting is tightly controlled. Sales need Board approval. New owners are usually financially etc.screened
This market is fairly isolated from the Condo and rental markets.
Not sure what you're trying to say. That Condos will crash, while Co-ops keep there value.
Actually all those things that make co-ops more secure, like the boards, make them harder to sell. I have friends who have been trying to sell a co-op in TriBeca at under-market price for 6 months. Some potential buyers can't pass the board, so no sale.
Also, let's say the condo market falls 30% to 40% (my guess) you think people will pay an extra 40% premium for a co-op over a similar condo. Trust me, you are not isolated.
BTW, Manhattan co-ops are restrictive, but not perfect. People still go bust in them -- and then, unlike condos, the whole co-op has to share the loss. (which makes sense they try to avoid this with good screening -tho the boro co-ops can be a lot more lax).
Also in most co-ops you can't rent the apts. And there's the maintenance cost-which has absolutely skyrocketed lo these past few months.
Washington doesn't have the job losses (yet; we'll see what the new President and Congress does),
short of a Ron Paul administration, with Libertarian super-majorities in both houses of Congress (at least 60 Libertarian senators to prevent filabusters), there will NEVER be meaningful job losses in DC.
Now some disgruntled Libertarian will dig up some meaningless irrelevant statistic, but that doesn't apply to the new paradigm after 9/11.
In case you all can't understand Michael Stipe's warble-y style, here are the lyrics - just too perfect:
Theres a problem, feathers iron
Bargain buildings, weights and pullies
Feathers hit the ground before the weight can leave the air
Buy the sky and sell the sky and tell the sky and tell the sky
Dont fall on me (what is it up in the air for) (its gonna fall)
Fall on me (if its there for long) (its gonna fall)
Fall on me (its over its over me) (its gonna fall)
Theres the progress we have found (when the rain)
A way to talk around the problem (when the children reign)
Building towered foresight (keep your conscience in the dark)
Isnt anything at all (the statues in the park)
Buy the sky and sell the sky and bleed the sky and tell the sky
(repeat chorus)
Dont fall on me
Well I could keep it above
But then it wouldnt be sky anymore
So if I send it to you youve got to promise to keep it whole
edhopper, you are 100% right. I have sold and bought quite a few properties. I wouldn`t touch condos or houses located in deed restricted neighborhoods. It is hard to believe what a bunch of people with nothing else to do, can come up with.(very much like our Congress)
Indian real estate bust is here..A lag of ~2 yrs from US..
The last leg of asset (hyper)inflation in emerging market-commodity complex is crumbling as deflation is bound to set in by next year
Broker,
I'm not sure a foreigner could even own property in Moscow in the 1980's.
The one thing that helped Moscovites the most was the ability to sell their flats with no mortgages at all. True, some had no idea of 'value' and sold very cheap.
I bought mine in 99. Old Stalin building (the best) 6 floors with a lift. Novy remont was only $10,000 including parquet, plastic windows, heavy wall removal etc.
If you want to make a whole lot of money, become a Mitsubishi window air conditioner dealer. Lushkov if fed up with those old style, hang out the wall drippers.
Moscow is supposed to be one of the most expensive cities in the world. Not so if you live like the locals. New Ladas for $7,800 and I can still go anywhere by gypsie taxi for 200R.($8)
Sorcerers of madness
Selling me their time
Child of God sitting in the sun
Giving peace of mind
Fictional seduction
On a black snow sky
Sadness kills the superman
Even fathers cry
Of all the things I value most of all
I look inside myself and see
My world and know that it is good
You know that I should
Superstitious century
Didnt time go slow
Separating sanity
Watching children grow
Synchronated undertaker
Spiral skies
Silver ships on plasmic oceans
In disquise
Of all the things I value most in life
I see my memories and feel their warmth
And know that they are good
You know that I should
Watching eyes of celluloid
Tell you how to live
Metaphoric motor-replay
Give, give, give!
Laughter kissing love
Is showing me the way
Spiral city architect
I build, you pay
Of all the things I value most of all
I look upon my earth and feel the warmth
And know that it is good
outsider:
a few things help
1) MN is cheaper than NH.
2) we are DINKs so save a lot
3) we are frugal (except for the recent car purchase)
4) many of our vacations are cheap because we have friends/family around the world
5) I didn't include health or disability insurance etc as that's taken out of our paychecks.
6) we often entertain at home (I love to cook) and we have a great space, so we save that way
7) we are both fortunate that we are able to buy neutral clothing and still look good. thus we don't buy clothes that often (I buy clothes maybe once per 12-18 months)
8) a lot of the things we love to do happen to be free. (biking, tennis, reading, gardening, talking)
Actually all those things that make co-ops more secure, like the boards, make them harder to sell. I have friends who have been trying to sell a co-op in TriBeca at under-market price for 6 months. Some potential buyers can't pass the board, so no sale.
There are eight million stories in NY and this is one of them
Seriously,every coop is different which adds to the interest of NYC.
In a country which generally conformity,uniformity and generally a comatose life, NYC thrives on non-uniformity and living with your wits intact and always active.The second time round one learns to interview the board as they interview you, to find out the buildings value system. If your friend was on the board would he act any differently?
Ross, I wasn`t talking about foreigners. I paid ~$800 (8,000 rubles-at the time it was 10 to 1 on the black market-real market) for my first apartment in Leningrad (now St. Petersburg), in 1987.
P.S. The exchange rate at the bank was like $5 for 1 rubla.Right!
here's a very gross estimate of our expenses, I'll try to look them up more in detail later:
PITI: $1780
Car insurance: $196/mo (total, both cars)
Gas: about $180/month now
car washes: negligable. maybe $100/yr
Utilities: we do a payment plan for electricity, heat, and all that (it's the same every month and it resets every year): about $350/month
Food: unsure honestly. Maybe $600/mo?
Telephone: $45/month
modem: $55/month
Sat TV: $34/month
XM: about $24/mo
eating out: maybe $200/mo? (we don't do it a lot because I'm gettin fat)
then of course there's all the other things I'm forgetting.
Vacations: we tend to be cheap, usually visiting friends/family so it's just a matter of a plane ticket. then once per 1-2 years we have the blowout (like Paris/London)
Medical insurance and that type of stuff is all paid from work and isn't in that $4400/mo.
and also car purchases isn't either.
also: car repairs are included in the $4400/mo... but they're sporadic. I think I had maybe $4k of repairs on my old car from 2003-2008.
anyway, that's a rough estimate... I know I'm forgetting things
it also helps that we have no debt. (we paid off all school loans, we don't have cc debt or second mortgages or car debt or anything like that)
and lastly, our expense account will go up this year due to gas increases, food increases, and energy increases (I think the bill resets in August or something).
$1k/sqft renovation costs
$1.2k/sqft condo sale costs?
That's obscene even for SF.
You might as well stay in a $500 suite at a hotel for that rate, at least you wouldn't have to pay all the extra fees they're going to tack on.
Frankly, the article reads like an ad for stupidity:
Ive never met a project where you dont exceed a budget, Justin said...
If you can't find a decent robe hook for less than $200, you're blind.
I wonder what incentives the Boy Wizard is offering on the $20,000 a month rental apartment his company recently bought in NYC? Maybe a really close look at his "wand" that has stirred up so much controversy?
"The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April..."
7200 units on the market in a place the size of NYC?
That doesn't seem like an incredible lot to me. I just checked and my Chicago-suburban village of 8000 has 238 single family homes/condos on the MLS right now and we aren't in some terrible recession here.
chester, look at miller samuels reports -not sure how independent they are but it gives you an idea of sales - not really huge in Manhattan (also the 7212 is manhattan only - up from 6000 or so in 1st q 08 I think:
2282 - sales in 1q 2008 - ave quarterly sales in 2007 - 3358
For the person asking about negotiating with the landlord: if you want to play softball, have some comparable rents handy, and when they propose a rent increase, show them what other buildings are asking. If you want to play hardball, threaten to move, and be ready to do it if they don't budge. A prior complex tried to raise the rent from $1500 to $1900, and wouldn't budge; I moved.
My current expenses, by way of comparison; note that I'm a hopelessly single person, so some expenses are lower:
Rent: $1450/mo (1 BR, Wash DC)
Car Payment: -
Car Insurance: -
Gas: -
Car Maintenance: -
Public Transit: $30/mo (gov't benefit pays transit to/from work)
Utilities: - (incl in rent)
Food: ~$300/mo
Telephone: $45/mo
Internet: $15/mo
Recreation: $100/mo max (lots of free stuff in D.C.)
Electronics, clothing, etc. are as needed, not regular purchases. Who says you can't live for cheap in the city?
@dashingdwl - your friend probably bought that apartment with $2mil cash that he earned at his job. But think of it this way - if he worked at Goldman, his job was probably bogus, and really should have only paid him half that, which is maybe what the apartment is worth. So in the end, he is fine, and should still consider himself lucky. Because, personally, I think his job was probably not worth creating, since it is likely part of the systemic problem that is going to put our economy in the dumper in short order.
What I don't get is why the high price financials need to be clustered in NYC. I suppose there are good reasons, but it seemed like an anachronism after the invention of the telephone, and even more so now.
"uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?"
Grow a garden, hunt, fish, gig frogs, and you can eat for less then that. Been there done it you just have to be creative and I don't mean stealing shit either. This must be your first real recession huh boy?
Hey anonymous - my post was about living in Wash DC on $300 a month for food. I highly doubt a person renting a 1400 a month apartment is going to get a backyard with space for a garden.
That doesn't seem like an incredible lot to me. I just checked and my Chicago-suburban village of 8000 has 238 single family homes/condos on the MLS right now and we aren't in some terrible recession here.
I'd like to have this explained to me.
As a comparison, Chicago is leading the condo crash as compared to NY. They supposedly have 5,000-10,000 or so new condos coming on the market for each the next two years. First quarter sales were reported as 208.
Most of NYC's population can't afford to buy. When those who can have second thoughts, there won't be many people buying.
"I feed my son and I for 300 or less per month. It is doable, and not ramen 24/7 either.
Store brand vs name, bulk rather than single serve, skipping most junk and very basic but balanced meals.
Also helps to stay out of the organic/Whole paycheck/Trader Joe. Think safeway, sav-alot and walmart."
Just going to Costco or Sam's Club will save a ton. A spaghetti dinner purchased at one of these places costs about 50 cents per person (60-75 cents a pound for pasta and a few bucks for a giant can of good name-brand sauce).
Huge bags of rice, flour, sugar, etc. are cheap.
And 12th percentile: I know that cities and suburbs are completely different animals when it comes to real estate, and I haven't studied downtown Chicago's situation. There does seem to be a whole lot of construction going on down there, but I don't see any evidence of panic selling.
First Q sales of only about 200 is really surprising to me, given the volume of construction and the amount of advertising I see.
Thanks for the tips. We've been printing out craigslist comparisons to show the landlord. We'll see. A good thrifty budget you have, too. We've gotten groceries down to ~400 pm, but it means we -- that is, I ;)-- make everything from scratch. And we still buy organic stuff (Kroger, farmer's market), so it's possible. Most of the packaged stuff is junk anyhow.
There's double the number of lobbyists here in DC since 2000. It turns out there's a lot of skim when you move $3 trillion of other people's money through town every year.
Our market is another good case of wide differences between zip codes. The exurbs have been hit hard by subprime -- about an hour outside DC in Manassas and Prince William county there was a lot of greenfield McMansion building and 40% of the loan volume was subprime. But who wants that commute? Inside the beltway (Arlington) has held up better, nominally flat except for condos, which are dropping b/c of excess construction. Northeast DC is getting hit harder, some investor owned renovations going to the banks and listed at 40-50% below peak in 2006. Payment option ARMS are going to hit DC inside the beltway harder than subprime.
"peripheral v - uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?"
OK, maybe closer to $400/mo if I was to be honest. And yes, there is some ramen in there, though not much.
The "secret"--not much of a secret--is I don't eat much. I can stretch most restaurant meals into two. Eat half, take the other half home; voila, $10 meal becomes a $5 meal. Another "secret" is that some processed foods are dirt cheap--not good for you, but it's hard to beat hot dogs, ramen, pot pies (probably the least unhealthy option in that category) for price per meal.
But the best approach to getting food expenses way down is by cutting restaurants and prepared dishes and buying raw ingredients: fruits and vegetables from the back yard (even we city dwellers have communal gardens where you can reserve a small lot), flour, rice, bulk pasta, bulk hamburger, and whole chicken from a discount grocery store. A lot more work, but a lot less money; that's how my mother did it.
One other secret: Mexican. Price per calorie really can't be beat. Tortillas, bulk refried beans, bulk salsa, and just a little bit of meat, maybe a few vegetables to the side, extremely cheap food. Another one of my mother's secrets to affordable living. The digestion system takes some time to adjust, but, well, you knew that . . .
My tip. Drop all dairy foods, cut back on wheat, not too much meat, load up on veggies and fruit, drink shitloads of water and of course, every week you get one cheap jug of Chardonnay. Grow your own as much as possible, buy in bulk, join food co-ops, turn down fridge and add gallon jugs of water in freezer to help store cold energy, turn off the air, wear wool (see IceBreaker Icebreaker
) and shiut down heat. Boycott gas and use a bike and walk. Keep healthy!!
A doctor friend is trying to sell her 1bed co-op on the West Side. Pretty cheap, 595, now lowered it 30k. IMO, she needs to drop another 100k to move it. Her maintenance is up 6% this year, and you can bet a fuel surcharge may be in her future. Her agent (from corcoran) describes the market as a "stand-off" Listing times have doubled.
Also, a stunning amount of new condos are nearing completion and should hit the market in the fall/winter. Construction cranes and new towers are everywhere.
"Benjamin M. Friedman, in his 2005 book, The Moral Consequences of Economic Growth, cites abundant historical evidence that when economic prospects look bleakespecially for long periods of timeintolerance, racism, and other reactionary impulses flourish. As more people experience hardship, trust between them tends to diminish, and the social fabric itself seems to fray....
We recently lived through two epidemics of excessive financial optimism. I believe that we are close to a third epidemic, only this one would spread irrational pessimism and mistrustnot exuberance. If that happens, our economic problems will become much worse than they need to be, and our social problems will multiply. Only if we heed the lessons of the boom can we keep the bust from causing lasting damage."
I don't want 2 months free rent, I want a faraday cage or stealthy wallpaper(whichever is cheaper); it saves battery life for my tin foil colander device for when I'm mobile.
This one from Ben`s blog is for the history books. "The CAR also sells St. Joseph statues through its online store."
I wonder when they are going to start selling KY.
Heh, just happened to be browsing Craigslist in my area. I signed a 1 year lease in April and my apartment has been advertising apartments at ~ 10% less than what I signed up for and less than a year ago when I started to live there.
Definitely high-end as well... I imagine this will give me some leverage... although it is a complex... its a bit scary asking for a lower rent, but this will give me some ammunition in the future.
what do you mean ramen diet? are you kidding? my girlfriend and i spend easily less than $250 a month on food for the both of us combined and my 4 year old daughter comes over 3 days a week to pillage my pantry, and we are by no means on a ramen diet. i make pretty much all our food from scratch so i can imagine that helps shave costs off, but still imagining that you cant eat for under 300 as a single person seems like a strange observation to me.
This is in las vegas, so i dont know if we have an unusually low food cost out here, but i strongly doubt it.
You want REAL-TIME Manhattan Inventory trends...I spent 8 months in BETA with Streeteasy and got the charts up. Only have data from NOV 2007, but at least you can see what is happening, as it is happening now, instead of waiting for lagging quarterly reports. 1MTH, 3MTH, 6MTH links above charts; more options as we have a few more months data...
Urbandigs, thanks! what a great idea -- have you all gotten a lot of freaked out calles from Manhattan RE industry (they kept this data really hard to gather for a long time)
"No way! That was the time the American left was calling for a copy of the Socialist Paradise. I thought everything was free."
If by "the American left" you mean "almost no one on the American left", there might be some truth to this statement. Otherwise, you have the 1980s with the 1920s and 1930s when there was at least some level of support for the Soviet model.
Alo - well, many brokers did question why I would want to do this!
Transparency is a hard thing to come by in a city where so much wealth is created via real estate. But in this environment, broker babble isnt working anymore and used car salesman antics will probably lead to little or no business over the next few years for new agents without a solid referall/contact base.
Enjoy! ill add more to these charts as we get over 12 months of data.
I just had a $45 breakfast this morning.... sorry but I don't know how to make a great omelette at all, nor do my pancakes and waffles taste the same as the good breakfast spot I took my wife and son to. On the plus side that's enough food to have breakfast tommorrow.
I don't budget but I'd imagine we are in the $500-600 range. My wife mostly home-cooks all of our dinners... but I'd say my lunches are a bit of a problem ($5-10/day adds up), as are our eating out splurges.
I just watched the next episode of a couple that moved back into the old trailer they were in, before they traded up; it was kinda sad, but not really. They looked at the whole experience as a vacation, kinda like a honeymoon and 50th anniversary all rolled into one contract. They eat cat food now, and love it!
Next week is a homeless couple that found a meth lab and made enough for a no-doc loan, now they own a real estate lab.
While I was surfing channels I also came across, "Name That Realtor" and that was also kinda sad, but it was one of those reality shows that is part game show and they have a RealtorCam strapped on the realtor of the week and this fat slob was bitching about filling his SUV up and filing it with kids to go on home tours and keeping the air on while Mom & Dad look around. Dumb huh...
Must be kinda slow ehh? I thought this was a working week for Bernanke but I assume he's on Warsh's yacht having another roundwith the little lady wife swap thing?
Washington Mutual (WM) crossed the magic threshold of $5. Many mutual funds have a requirement about market cap and price. Those with a threshold of $5 may have to dump it if it does not quickly recover.
On a purely fundamental basis, more writedowns on account of Alt-A liar loans are coming. More people will be walking away from their homes in California and Florida. Approximately 75-80% of those in liar loans only make the minimum payment. Negative amortization increases every month in those loans. On top of that, home prices are falling rapidly. Add the two together and anyone who put down even as much as 20% is now hugely underwater.
At some point escalation clauses will kick in. Escalation clauses vary by contract, but typically vary between 110% of the loan to 125% of the loan. Those clauses should be kicking in now, in mass, based on price depreciation alone.
Have they in practice? Think again. It would be the kiss of death for either WaMu or Wachovia to start enforcing those clauses, homeowners would immediately default. Instead, both banks pretend they are well capitalized when it is increasing apparent they are likely insolvent.
I fail to see how either of those banks survive. The Fed's policy so far is to have the relatively strong take over the pathetically weak. Examples of this are the shotgun wedding between JPMorgan (JPM) and Bear Stearns (BSC), and Bank of America (BAC) and Countrywide Financial (CFC).
Anonymous said: "Those clauses should be kicking in now, in mass, based on price depreciation alone."
No. Those loans are based on the appraised value in the original loan file, not current appraised values. The LTV 'trigger' has nothing to do with current market values.
Please feel free to offer your correction if you think I'm wrong.
"The deleveraging process for the financial system has barely started as most of the writedowns have been for subprime mortgages; the writedowns and/or provisioning for the additional losses have barely started. Thus, hundreds of banks in the U.S. are at risk of collapse. The typical small U.S. Bank (with assets less of $4 billion has 67% of its assets related to real estate; for large banks the figure is 48%. Thus, hundreds of small banks will go belly up as the typical local bank financed the housing, the commercial real estate, the retail boom, the office building of communities where housing is now going bust. Even large regional banks massively exposed to real estate in California, Arizona, Nevada, Florida and other states with a housing boom and now bust will go belly up."
UrbanDigs, not surprised, but in the end transparency will help everyone- even the petulant RE industry. They hyped the "NYC is different" line ad nauseam through the bubble, and they are now surprised sellers won't budge on high prices and properties aren't moving, and their commissions are drying up. Go figure.
You oughta let the nyc media know this site is out there - maybe they'll start writing stories that are actually data driven, rather than RE-industry source driven. Congrats and best of luck!
"I saw what those blood-stirring plans led to every time urban renewal fever swept the nation"
I wasn't around to gauge the difference between pre and post Haussman Paris, but I certainly like the results. Certainly more human than Albert Speer's Berlin or Stalin Style.
It is hard to find examples of major urban renewal unaccompanied by fascism, but we can do it, can't we?
Cracking dams, falling bridges, ech.
I visited Amsterdam last summer and met a fellow who worked as a civil engineer. He told me that Holland had offered their expertise with water management years ago, knowing that New Orleans was a disaster waiting to happen. Rebuffed. Not even politely.
Thus, hundreds of small banks will go belly up as the typical local bank financed the housing, the commercial real estate, the retail boom, the office building of communities where housing is now going bust.
I can definitely say that there will be a bunch of regional banks going belly-up within a year or so down here in Charleston, SC. For some reason, the housing crisis has extended pass subprime, but when it does it will be ugly; lot's of construction loan exposure on the beaches. Look at the recent sales info on these houses...
Thanks ALO! Im trying to, but its hard to compete with top producers who hire PR guys to get them more press..
When I see a big Manhattan RE name on tv, obviously I cant name names, I laugh. While their business may be booming, and they may feel like the controller of the market, they have no clue what is going on in a macro sense. Again, not generalizing, as there are great brokers out there that are very smart about the issues we face, but the ones that make it to CNBC, just do not tell it like it is!
its a bit scary asking for a lower rent, but this will give me some ammunition in the future.
YLSP | 06.28.08 - 4:16 pm | #
Why? It's just business. At the end of the lease you would offer to move into one of the lower rent apartments. It's a little trickier with the lease still in effect, but I'd ask if there's something they could do. Try to appeal to their sense of fairness, no one should be surprised at the request.
Argento,
What line of work are you in? I've vacationed in the Charleston area and liked it very much but honestly did not see much beyond service industries as far as employment. Perhaps more a function of being in vacation mode and not paying close attention.
Tough summer ahead. 401k holders getting crushed will liquidate, and cash strapped seniors will be inclined to sell securities to meet increased cost of living. All this while the increasing number of bears short the piss out of equities.
barely,
I had a debate on a different website with someone talking about "stocks only go up". It actually sounded like the argument that housing only goes up, "over 10, 15, 20 years the stock market always goes up".
I tried to make him look at N225 but he proceeded to quote Buffet and talk about "cheaper for me".
I'm actually in law school(gasp!) elsewhere, but my roots are in Charleston. Between Charleston and law school, I'm in a weird bubble where no one seems to understand the bigger macro-economic collapse that's coming. Charleston simply doesn't have the employment infrastructure to support these kinds of prices. It's mostly tourism and service industries driven by the wealth effect of hundreds of millions of dollars in Yankee money buying up beach houses and historical property.
This is a bubble waiting to blow. And to make matters worse, many Charlestonians have a weird thing about out-of-town banks, so we have a lot of highly leveraged boutique banks.
"Employees are stopping contributions to their 401(k) plans out of pure desperation," she said. "Normally, a human resources person would encourage them to save, remind them of the company match. Now, with everything so expensive, what can they say?"
When someone asked me a few years ago when I would like to retire, I said 68, and here I am going on 70," Britton said.
For more Americans, the dream of a comfortable retirement is fading.
The Fed could have crushed the speculators yesterday with just a quarter point hike and the threat of further hikes; however, Ben chose to speculate himself - with YOUR money - and did nothing. I say he speculated with your money because his lack of action will cost you more at the pump, and in your retirement accounts. Across America IRAs & 401k's are losing money as they are beaten down by commodity inflation - especially today with a Dow close of -358.41! Thanks again Ben.
The United States has narrowly avoided an official recession so far, thanks in part to tax rebates and strong exports. And by many historic measures, the economy isn't doing as badly as everyone might think.
ROTFLMAO!!! You read the whole story of how bad things are, then they end it with a Republican Mantra that things are really great!
Energy and other commodity prices are not rising due to "inflation", rather they are rising due to supply not meeting worldwide demand at lower prices. Any attempt to correct this by raising the price of money domestically will do nothing but make us less competitive internationally. The damage was done the day we exported the first manufacturing job to China, and put into overdrive when we started exporting high tech jobs to India. Now they are our competitors for commodities. In they case of oil they are geographically closer than we are to major supply chain areas like the Middle East and Russia. Blame God I suppose, but interest rates have nothing to do with that. What would help would be to curtail our simultaneous wars on Muslims, Venezuela and Science. That is an ignorant combination.
Can't answer you very well here but, as it's the weekend and the hosts are permissive, let me see about a short version.
Haussmann was an experienced public works director, not an urban designer as such. He had the confidence of the monarchy and, hence, an effective blank check. The brief was the transformation of Paris. I see no possible contemporary parallel.
His work was based on a rare combination of experience in infrastructure, practical necessities and a personal (very mature) aesthetic. Encrusted as it is by subsequent 'urban planning' his original success is still evident in modern Paris.
I don't suppose many realize his work started in the 1840s. Those Boulevards, which did very well in accommodating motor traffic as recently as 1960, were devised almost a century and a half ago for carriages.
Under his supervision, the city gained an excellent water supply, storm drainage, sanitation, a system of parks still enviable today, and - by ignoring the ubiquitous grid - a web of arterials which make direct transits to scores of intraurban centers.
City planning isn't done this way. Yet we tend to admire Paris, even those of us not especially fond of the French.
No. I can't think of any grand designs of the recent past which meet that standard. What would that be? Brasilia? Reston? Chandigarh?
Cities emerge over time. The best of them continue to reflect their own history.
It's rare to see examples where they undergo radical, corrective surgery as was the case in 19th century Paris, though most of the original fabric there was left intact. The current mode seems bent on erasing all to make way for a new mode.
OT; Newsweek: John McCain defaults on California home
Newsweek is set to publish a highly embarrassing report on Sen. John McCain, revealing that the McCains have failed to pay taxes on their beach-front home in La Jolla, California, for the last four years and are currently in default, The Huffington Post has learned.
Under California law, once a residential property is in default for five years, it can be sold at a tax sale to recover the unpaid taxes for the taxpayers.
The McCains own at least seven homes through a variety of trusts and corporations controlled by Cindy McCain.
Cynical wrote: "Energy and other commodity prices are not rising due to "inflation", rather they are rising due to supply not meeting worldwide demand at lower prices. Blame God I suppose, but interest rates have nothing to do with that."
And I guess that this supply not meeting worldwide demand started sometime in January, when oil was still around $70, and coincidentally (according to you), the Fed started the quickest easing cycle in its history.
Uncle Billy Loves FDR writes:
On Topic: Do other cities besides New York have co-ops. If not, how come? Class issues?
NY has a legal framework allowing for for shareholder-owned real estate. I don't know how many other states do, but it's few if any.
I'm an NYC co-op owner (shareholder, technically) and am SO glad we're in a co-op and not a condo. Our building has strict financial guidelines for buyers -- trust me, it's worth the slight dampening effect on prices. Yes, our prices are somewhat dependent on how the condo market does, but that assumes the condos are going to stay condos. They're going to turn into high-turnover (and high-rent) rentals.
The RC-C section in a FDIC CALL report. You would have to manually add up the various detail lines in RC-C, subheading 1, to get the totals.
Each bank has to submit CALL data to the FDIC on a quarterly basis. The data (usually) becomes available 15-30 days after the quarter ends. Go here to search for banks and download/view as PDF data...
Under California law, once a residential property is in default for five years, it can be sold at a tax sale to recover the unpaid taxes for the taxpayers.
If Florida, the counties sell 'Tax Certificates' each year (to keep the revenue flow intact), then the certificate holder gets to force a tax sale, if the tax certificate amount ( + interest ) is not paid after 3 years. Perhaps California does it differently.
OK, that's what I was thinking. If you go to the information gateway, you can change the pull down to get the financials as a percentage of assets, and then click on the "Net loans and leases" which pulls up the "All real estate loans" data.
Here are several Charleston boutique banks, popular with the locals.
Thanks Alykatz. I've heard that in Northern California there was (is?) a trend where multiple borrowers could all cosign together for purchase loans on apartment buildings. Don't know to what extent they operated a co-op after that, but I imagine that for it to work they would need a very detailed contract.
Burnside: I can't think of any modern examples. Jerusalem popped into my head briefly, but flew out immediately. London has some nice examples of renovation that preserves the character of old buildings I think. But on a grand scale? Can't think of any, but I'm hardly a world traveller these days. Will take a look at the cities you mentioned.
market may be softening - and about time - but it has a LONG LONG way to plunge before it gets back to the numbers common around 1999-2003 in terms of rents or prices.
In the tony areas of brooklyn (there are several that are arguably nicer than upper west side) brownstones fetch 2.5 million to triple that. They could be had for 30% of those prices a mere 5 years ago. Places that I rented in 2001 for two thousand bucks a month are renting for three to four thousand bucks a month now. Co-ops transacting for 900k to 1.1m now, were selling for 400k in 2002 ..
The numbers are even more startling for new york (most of it). if I had a time machine I could go back to 2002 and triple to quintuple my money by listing the place today. If I borrowed a lot from the bank, I could increase my investment by an order of magnitude..
seeing a drop in prices to those around just a year or two ago is very unimpressive. Compared to cali or florida the market is still white hot and only those who paid top dollar 12 months ago, and on a 90% mortgage, and wanting now to flip, are showing a loss. I'm really skeptical that prices will drop to even 2002 levels. New york and brooklyn is one of the few places were everything is walkable. If oil keeps rising this aspect supports the 3000+ rents and 1m+ apartment prices.
Argento,
Thanks for confirming what I suspected. I remember taking a carriage tour of downtown Charleston and part of the guides talk was about one particular house known as the narrowest house in Charleston - it was at best 15' wide and maybe 60' deep and recently selling for north of $600k (this was 3 or 4 years ago). I also looked at some of the properties on Kiawah Island and was left wondering who were all these people who could afford the prices they were asking...
Kiawah is absolutely beautiful by the way. Way OT - I brought my surf fishing gear and I would go down to the beach on Kiawah early in the morning and catch black tip sharks to 3 or 4' - you should have seen the look on this womans face who was up early jogging - don't think she went back in the ocean for the rest of her stay...
Kona's Gold writes:
"The Fed could have crushed the speculators yesterday with just a quarter point hike and the threat of further hikes"
It's been so obvious for years, and more so during the last 18 month oil and commodity price run-ups, that the fed has no interest whatsoever in controlling inflation, that it raises the real question of what their intention is for dealing with the impending oil, ag and material price spike blow-off.
On the one hand their efforts are so "possessing or acting with the desire to do noble and romantic deeds, without thought of realism and practicality, romantic to extravagance, absurdly chivalric, apt to be deluded", that I think the leader's name should be changed to Ben Quixote.
On the other hand there arises the possibility that their plan is more 'cunning, scheming, and unscrupulous', involving perhaps words such as 'rationing' and 'price controls', in which case the leader's name might best be changed to Ben Machiavelli.
"In the tony areas of brooklyn (there are several that are arguably nicer than upper west side)"
Only someone marooned in Brooklyn could come up with that line. Though there's no reason why you shouldn't try to make the best of your circumstances.
And it's not oil prices or "walkability" that will impact Manhattan prices...it's the loss of jobs in the financial sector...5% of the jobs there provide 23% of the city's income. Falling tax revenues will cause greater cuts in schools, public services. And the NYSun reported the already underfunded public pension funds have investment losses of billions, and those numbers are only up to May. Newer losses not yet calculated.
NYC is not that far from Vallejo.
Also Justin,to be fair, you may not have lived in NYC long. Just check out the NYTimes Re sections from '91 or '92 etc. Filled with articles on how to stop the bleeding on apts. bought in the roaring 80s. How to find a tenant, any tenant. Manhattan crashed hard in the early 90s...and no neighborhood escaped. Not one.
Why do so many people think "I" is an object pronoun? They wouldn't say "I feed I" but rather "I feed me" so obviously it should "I feed my son and me..."
The boulevards of Paris were built for swift movement of troops and killing zones for artillery in case of revolt.
Alec, I've heard that many times, seen it in print as well, but have never succeeded in locating a contemporary citation. While it sounds rational, I note all that mobility and clear field-of-fire was of little enough use to Louis-Phillipe in 1848.
Oh Fried, thanks for your sympathy. It's hard to cope here in da boro with its more reasonably priced housing, less crowding, nicer restaurants for half the manhattan prices, and that pesky diversity and arts scene that fled Manhattan years ago. If I were more pretentious sort, I'd jump off my brownstone.
Justin, the only reason New York hasn't had a 20-percent-plus real estate decline yet is because all that Fed "lending facility" money flows first to Manhattan.
By the way, The Northeast (which includes Manhattan co-ops and condos) is most reliant on oil for heating. (No, you can't use "white-hot prices" for heat.)
What happens if couple of co-op owners loose their jobs (They are in the financial industry). They walk away from the co-op because they cant find buyers meeting criteria/break even price.
(You sue these previous owners/co-op owner and find they have liquidated their assets declared when purchasing).
I guess the rest of the co-op owners have t absorb that loss. !!
But the shareholders in my building didn't overpay. And the co-op board requires buyers to have substantial assets in the bank, much more the mortgage companies do. Yes, if the next Great Depression hits we'll be f'ed, but I'd also be f'd if I were still a renter and the landlord wasn't getting rent from my neighbors. Either way, the $ for building services disappears. But here we can run the building for our mutual benefit instead of the landlords' profit.
Oh, and by the way, Brooklyn ROOLZ. I grew up in Manhattan and have no interest in moving back. Manhattan is an overpriced theme park now and I only go there when I have to (work, symphony, my mom who will never leave the zzz Upper East Side).
You ad hominem attackin' me? You attackin me? I don't see you attackin any other boro with your limited debatin' skill set, so you must be ad hominemin' me.
alykatz, fugghedaboudit. Be glad such trolls are under da bridge, on the Manhattan side.
I hope fried's joking about mistaking a cinematic reference for uh.. "street." But at least he has the civility to back off, if only in a backhanded way.
Pay a PREMIUM for a co-op over a condo? You've got to be kidding. I rent (in NYC), but if I wanted to buy an apartment it would only be a condo. I'm not sure I would live in a co-op even for free.
Personally I am very anxious to see if and how much the NYC market is impacted by the meltdown. Thus far the fact that the city attracts the most wealthy people in the world like a magnet seems to have forestalled any serious meltdown, the increase in foreign purchases offsetting any slowing in local investment. Overbuilding in Manhattan still appears to be impossible, but the potential danger is likely not in Manhattan but in Queens and Brooklyn where crappy pre-fab styled 'luxury' condos have sprouted up like weeds in some seriously unimpressive areas (only 650k for a view of Home Depot? I'll buy two!) located far from the all-important subway system. It is astounding how many of these apartments are available, but perhaps it is just me, perhaps the desire to live in the mostest awesomest city in the world by the mostest awesomest persons will trump economics. But should things start to fail here, the freakout factor across the nation will go to code level 'reflective orange'.
lilbunny, the meltdown is already on in some parts of brookyn, queens, the bronx and SI, which together far outnumber manhattan in population, and are the great working backbone of the city. The backbone is strained, and it's getting worse.
A rise in crime, poverty and the return of abandoned squat houses is happening on a small scale, but likely to spread. If it bleeds into Manhattan, the wealthy will run like hell.
Tis July. The blood won't flow until just prior to bonus vesting. End of 3rd quarter? It will be interesting to see how many wizards doubled down with their money and poured it all into real estate speculation. I'd guess the number to be somewhat higher than 100% as these geniuses probably used creative leverage in their own portfolios.
first!!
oooo
(
We are doubling the cost of just about everything we spend money, food, fuel, insurance, shipping, input costs like chemicals ect... and wages remain stagnant while jobs being slashed.....it will be an accomplishment if we will be able to afford shelter if this trend continues.
guess confucius was right:
"you are rich when you have no debt "
6th!
There's luxury condo's offering 2 months free rent in Woodland Hills. Nice places.
Their offering this so they don't have to mark down rents by 1/6th. They will next lease cycle though.
Cheers,
Damn Dawg! You must get up as early as I do.
Cheers,
another one :
the chinese curse:
" may you live in interesting times"
Now banks by lowering credit limits are lowering credit scores....so now the cost of borrowing money is skyrocketing.
With the consumer being about 2/3 of the economy.....a dead consumer is a dead economy.
Just between Ford and GM there are hundreds of Billions of bonds outstanding....something approaching 5% of our national debt. You think with revenues down 30% in one year....that debt will be serviced? You think our pension plans and retirement accounts might feel some pain?
Now what happens if state and local taxes fall 30%....how many muni bonds are there outstanding?
The job losses are a just a symptom of much larger credit problems ahead.
$3,000 a month in rent ???
Damn, the air quality in Manhattan must incredible to justify those numbers.
get the bags ready helicopters coming soon...
Helicopters only work when there is deflation like the 30s depression. All helicopters will do now is raise gas prices to $20 per gallon.
Helicopters grounded.
quite ironic!
i am from east germany and i would never have guessed that this superior system just lasts 20 years longer than the USSR one ...
well if you remove ying, yang goes down too
)
Yoringe,
Interesting. We adopted fascism to defeat communism. After fighting against fascism. Our turn for doing something REALLY STUPID I guess.
Cheers,
Race to the bottom?
Man threatens court action | The Times Leader, Wilkes-Barre, PA
Man threatens court action
Re: "Sebolka said he will go to court if his assessment isnt dropped to $319,000 during a formal appeal.
His new appraisal is dated Jan. 1, 2008 the date on which the new values are based though he pointed out the state-certified appraiser noted on the appraisal that the local real estate market has gone down 8 percent to 10 percent since then.
If they disallow the appraisal value and go by their own calculations, Ill be in court. If I have to take it to the Supreme Court, I will, Sebolka said.
Sebolka said hes upset that the reassessment company posted key information about the property descriptions on its Web site after property owners in the first batch had already held their informal reviews.
That information dealt with the quality and condition of each property, which are among the nine key factors the company used to value properties.
Sebolka said he knows of property owners who have since received reductions in informal reviews by arguing that their quality and condition are not in line with other homes in their neighborhood."
Beware of solicitations to reduce your property tax bill
Help for homeowners - The Daily Breeze
To his credit, Los Angeles County Assessor Rick Auerbach announced earlier this year that his office completed a decline-in-value review of the homes most likely to be affected by the declining real estate market - those purchased between July 1, 2004, and June 30, 2007. As a result of this blanket lowering of assessed values, the average property taxpayer will see a $750 savings on his October property tax bill.
Damn, the air quality in Manhattan must incredible to justify those numbers.
$3k in Manhattan? Dirt cheap, especially when you consider the cost to own a similar unit.
Be sure you factor in the cost savings of not having to own two cars (cost of vehicle, gas, insurance, maintenance).
Tax cushion for falling property values
A silver lining as property values fall - Los Angeles Times
Assessors in the five-county Los Angeles area are now in the process of cutting property taxes on more than half a million homes because of plunging home values. Notifications will go out this month and next to lucky homeowners.
Because the market value of most homes sold before 2004 increased far more than 2% annually in the first part of the decade, those properties are probably still worth more than their taxable value, even when the recent slump is considered.
But if you believe your home's taxable value is too high -- no matter when you bought it -- you can request a review from the county appraiser. And if that fails, you can file an appeal with county's assessment appeals board.
"We can make a mistake," said Orange County Appraiser Webster J. Guillory. "But if we do make a mistake, just share your information with us and we'll work it out together."
The new elite "my house is worth less than your house"
Go ahead, protest your taxes. You might save a few bucks for a year. In aggregate, the taxing authorties will simply raise the levy.
I've been protesting real estate taxes for 40 years, off and on. Probably saved at most $10,000. Property taxes where I live were 1.35% in 1974. Today on increased values? 2.67%.
It doesn`t matter that much what kind of ROI you are going to get as long as you can sell it next year for 50% more than what you paid. Just hang in there! LOL
Houses only go up. They ain't making any more land.
Cheers,
tg,
"The new elite "my house is worth less than your house""
Bwahahahahahahaahha! I rented during the bubble...bought this REO in your neighborhood for $200k less than the last one did. How's that Ramen neighbor...he says flipping a filet mignon on the previous owners nicely HELOC added outdoor kitchen.
Cheers,
"My house is worth less than your house". I just love American humour! Now I got to go and change my shirt.(and better wipe off my desk too)
Got booted out of The page cannot be found
when swig bought it at the then highest price for a multi-resi unit...
studios offered at 1.2mm...
renting is Dirt cheap in comparison.concur
Newyork craigslist shows a few thousand "one month free" listings, and a few hundred in brooklyn (on not-so-high end places).
Look for it to get worse and move into mid-price mkt rentals - many of the condos rushed into completion in NYC will go rental, and there are just not enough people that can pay 3K rent to fill them. (Mr. Bednar is absolutely right tho-it is still on the cheap side compared to owning in Manhattan)
The quality of life in these buildings will start to get, um, interesing when people start to double and triple- and quadruple-up in them to make the rent. Woe are the handful of hapless condo owners in a buidling gone mostly rental...
And yet, and yet.... the "luxury condo" complex down the way from me is selling moderately well. But the reasons I can discern all play into the kind of economic and real estate issues we've discussed here:
1) It was marketed to olders, just pre-boom, who are downsizing from their larger homes for their old ageand have cash-out money to spend.
2) It is in a very desirable and central downtown neighborhood. They can walk to most things, drive in five minutes to most other things. A local and regional transit hub is ten minutes on foot with direct express buses to the Silicon Valley.
3) This a desirable area to live and retire in, period. Yet not nearly as expensive as San Francisco (and yet not too far from it for excursions).
So well-heeled oldsters who've dumped their houses at a profit out in the 'burbs are moving into high-density housing near the city center. Whoever dreamt this up turned out to have the right idea for the right time.
What's amazing about these concessions is that summer in NYC is ALWAYS the most expensive time to rent. Newbies are moving in, others are at the end of their leases and trying to move up, etc. It seems like there is a major problem at the top of the NYC rental food chain.
Broker writes:
"My house is worth less than your house". I just love American humour! Now I got to go and change my shirt.(and better wipe off my desk too)
Broker | 06.28.08 - 10:11 am | #
LOL. Me too.
I though only white trashers like 'my people' bragged about how shitty their digs were - hooocoodanode we were the real trend setters.
dryfly,
"I though only white trashers like 'my people' bragged about how shitty their digs were - hooocoodanode we were the real trend setters."
If I could, I'd have a '67 Camaro on blocks in the front yard...that I'd constantly say "I'm fixin' on it."
Cheers,
Yoringe, you shouldn`t have knocked down that wall. Greenspan got all confused after that. He still is.
P.S. I love Dresden. Even during the commie years there was something special about it. One day I might retire over there.
I was in NYC a few weeks ago. First time in years. It struck me that there were many new towers going up.
Here is a site with some info and a nice map.
I'm sure you all are well aware that the real estate market in NYC only goes up.
Broker,
Are you British? I far prefer British humor to American. Must be one of those delicacy things.
Cheers,
$3,000 a month in rent ???
Damn, the air quality in Manhattan must incredible to justify those numbers.
The mortgage and maintenance on the same apt. would probably be $5K to $8K /mo. So that's a pretty good deal.
This also illustrates why NYC home prices have a long way to fall in terms of rent to own ratios. (Since rents are not going up to meet prices.)
12th percentile,
It only always goes up everywhere. Sheeseh! Don't you know they ain't makin' any more land!
Cheers,
Re: My house is worth less than your house
Great!
What about seminars for people to reverse engineer valuations and to help people find ways to lower values by making properties look tainted and toxic during periods of appraisal. CR has offered some fine examples of people remodeling as they go into foreclosure, but this is more of a sub-niche where you still want your house, you just don't want property taxes to be too high. I see lemonade opportunities in this this era of subprime lemons --
Doesn;t matter if your in a nice new York condo or in LA, we can help you, lower your property tax value and in many cases, lower your liability to zero and even have the county give you a check. Think of it, while your neighbors are paying over-valued property taxes, you could be sitting by your mailbox waiting for a refund from the assessor. call 1800-lowtaxes
A loss of 60,000 jobs in a metro area of 18 million.
Misean, I am Romanian by birth, and Russian by the grace of Stalin. I have been living in the USA for the last ~14 1/2 years. I love it.
One big problem is that it's probably the lower end that gets hurt hardest. We've had layoffs at our firm but while these people have made bets with other people's money, they've been pretty savvy with their own. Quite a few are just deciding to retire. Nannys are being let go. People are moving out of the city. Restaurants are dropping things like lunch hours. It's the bottom that will be hurt most.
Here is another recent article on NYC condo and rental market. I'm sure it will seem very familiar in tone to all CR readers.
The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April, according to the most recent research from appraisal company Miller Samuel. From February to March the increase was 4.8 percent, Miller Samuel data indicate.
And
Buyers are taking much longer to make their decisions, and there is a large amount of insecurity and concern today [due to the] recession, economic slowdown and job security," said John Harhay, a vice president and sales manager at Manhattan Apartments.
"Many properties are still being priced too high," said David Cooper, a vice president on the Jacky Teplitzky team at Prudential Douglas Elliman. "Most sellers believe their properties are actually worth more than they really are."
Anecdotally, I am seeing a lot of "For Rent" signs in Washington, and am seeing some incentives as well, though not quite as generous. Washington doesn't have the job losses (yet; we'll see what the new President and Congress does), but there is a huge overhang of unsold condos. My guess is that condo rentals are pressuring the high end of the rental market, and the pressure is starting to be felt in the mainstream rental market.
Unfortunately, it doesn't help me much--I'm tempted to play hardball when my lease comes up for renewal, but I'm in a rent-stabilized building that I suspect is slightly below market. I will push back if they try and raise rents on me, however.
If I could, I'd have a '67 Camaro on blocks in the front yard...that I'd constantly say "I'm fixin' on it."
We have boats... boats and snowmobiles.
OT:
"American 'meltdown' reason for money injection Fortis.
28th of June, 9:10
BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US"
Original press release:
VOTRON BLIJFT AAN NA GOLF VAN KRITIEK
Amerikaanse 知eltdown・reden geldinjectie Fortis
28 Jun 08, 09:10
door onze correspondent
BRUSSEL/AMSTERDAM (DFT) - Fortis rekent binnen enkele dagen tot weken op het volledig instorten van de Amerikaanse financi・e markten. Dat verklaart volgens de bankverzekeraar de serie ingrepen van donderdag om zich met €8 miljard te versterken. Цe zijn op het nippertje gereed. Het gaat in de Verenigde Staten veel slechter dan gedacht・ zegt Fortis-chairman Maurice Lippens, die volhoudt dat topman Votron aanblijft. Fortis verwacht faillissementen onder 6000 Amerikaanse banken die nu weinig dekking hebben. Мaar ook Citigroup, General Motors, er begint een complete meltdown in de VS.・"
Link to original (if you can read it):
Telegraaf.nl - De website van wakker Nederland
They say that for every auto assembly line job lost, seven others will follow.
In NY, the effect from Wall St job loses is at least as bad. Wall St is some amazing proportion of the regions economy.
Broker,
Thanks...
dryfly,
"boats and snowmobiles."
Forgot about that. Been a while since I lived in the frozen tundra.
Cheers,
The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April...
In the Northeast, spring selling season is pretty pronounced.
"boats and snowmobiles."
It's not authentic without a couch thrown out there too, and probably a refrigerator. Never know when you're going to want a cold one while you're relaxing on the make-shift porch.
I will push back if they try and raise rents on me, however.
Peripheral Visionary | 06.28.08 - 10:52 am | #
Our lease is coming due soon (Richmond, VA), and we'd like to push back, too. Any recommended strategies? Haven't been a renter in a while, so I'm rusty. TIA
Tank,
Thanks for that. I now need to find an even larger power source for the Super Colander Tin Foil Hat.
I hate that when it happens.
Cheers,
Outsider,
"It's not authentic without a couch thrown out there too, and probably a refrigerator."
Like I don't have that already. Sheesh!
Cheers,
Be sure you factor in the cost savings of not having to own two cars (cost of vehicle, gas, insurance, maintenance).
still not even close. I hear the same thing every day about San Francisco. Most people underestimate the true costs of car ownership, but it still is (or can be) quite cheap.
Our ENTIRE living expenses (PITI payment, insurance, food, car insurance, gas, car maintenance, home maintenance, landscaping and gardening stuff, gas, clothes, and even 3 vacations per year that involve flying etc etc etc) is $4400/month. For everything. we live in a 1600 sq ft house (plus 350sq finished basement) in the "Uptown" neighborhood of Mpls (can walk to almost everything, very desireable) and we have 2 cars for work
The only thing that's not included in that $4400 is
-we buy our 2 cars with cash. we get new cars every 10 years or so. Usually we spend around $10k-13k. This time we both splurged on a 3 yr old Lexus and 2 yo Infiniti, cost was $28,000 and $22,500. we'll have these cars for 10 years.
-some years we take a "big" vacation. this year it was Paris and London for two weeks. Total cost: $5500.
-not including big vacation and car purchases we have added maybe $5k to our "expense" account in the last 5 years. we don't spend a dime that doesn't go through our "expense" account. (I seem to have married a wanna-be IRS tax accountant or something).
NYC is simply very very very expensive. As is SF and other places. After a while people who live there get numbed as to how expensive it is.
12th percentile writes:
I was in NYC a few weeks ago. First time in years. It struck me that there were many new towers going up.
Similarly, guess when the Empire State Building, the Chrysler Building, the "new" Waldorf Astoria, etc, were finished? 1930-1931. Whoops.
Dryfly,
I used to work for a shipwright. Had a wooden dory I was working on in the yard for almost a year. The neighbors didn't seem to mind, though -- they were just curious to see a chick doing the work.
What I REALLY need is a wooden cable spool, that I can fancy up with an Old Grandad bottle with a candle in it over the central hole, and some velvet for the top side, to use a front yard card table.
Cheers,
Berylmarkham,
"they were just curious to see a chick doing the work."
That wouldn't make me curious. Would make me horny though.
Cheers,
What I REALLY need is a wooden cable spool
Misean, please. You don't NEED that. It's a WANT. Save up the cash from hocking something - don't use your cc. That's what got us into this mess. Yeah, it'll pay for itself when it drives the value of your property up, but do you really want to sell soon?
Have a friend in corp finance at Goldman. Smart, Harvard B school, good earner... He purchased his new apartment last fall... must have paid around $2 mil.
Me thinks that move was not so smart.
dryfly, where you live must be like in W.Virginia, where only the wealthy people have 2 cars sitting on blocks in their driveway.
Similarly, guess when the Empire State Building, the Chrysler Building, the "new" Waldorf Astoria, etc, were finished? 1930-1931. Whoops.
Bob_in_MA | 06.28.08 - 11:04 am | #
Good point. Never thought of that. Ah, the Chrysler.
Tank,
Thanks for the link. Tank---what a great name for a bear blogger! Tanks a lot.
Our ENTIRE living expenses (PITI payment, insurance, food, car insurance, gas, car maintenance, home maintenance, landscaping and gardening stuff, gas, clothes, and even 3 vacations per year that involve flying etc etc etc) is $4400/month.
YTL, I don't know how you're getting that # so low. And including vacations? I'd love to see that itemized on paper. Here in NH even, that's near impossible.
ed hopper:
We live in a 2-bedroom coop in NYC in a building mostly paid for with 5 shifts of staff/day. We pay $15,000/yr common charges. Most good owned apartment RE,especially in Manhattan
is in coops. The building as a whole are owned by a tenants corperation and run by a board. Most are fairly to extremely tightly controlled so subletting is tightly controlled. Sales need Board approval. New owners are usually financially etc.screened
This market is fairly isolated from the Condo and rental markets.
Here in NH even, that's near impossible.
Maybe amortizing the car isn't included?
Broker
If you're ever in the neighborhood, I've got a flat @ 22 Kutuzofsky Prospect I can rent you. Short trollybus ride to Tverskiya. At $150/night, best deal in Moscow.
No car payments here either. Still scratching my head...
NYC co-ops should be nice. I heard in the last year for some of the nicer ones you had to have 2X purchase price to even be considered to be able to buy. The old 200% downpayment.
Most good owned apartment RE,especially in Manhattan
is in coops.
I know you mean co-ops, but coops definitely comes to mind.
When landlords offer those free months' rent specials, that means they are betting the market will be better for them next year. The way it works is, they "pro-rate" the free month or two of rent, lowing your rent to a sensible amount. Then at the end of your lease, the free months and/or discounts are not included, effectively raising your rent. This happened to us, and they tried to raise our rent on top of it even though they had a high vacancy rate. We called them on it and they backed down immediately.
If the market is on your side, you don't have to do much to challenge your landlord. Say you'll move, if they have empty units they will back down. If they don't have empty units then the market may not be on your side.
Here in the DC suburbs, landlords are trying to hold the line on rents even as tens of thousands of condos go rental, sitting on a lot of empty units.
I now need to find an even larger power source for the Super Colander Tin Foil Hat.
Fortunately, an answer was provided on the previous thread:
Closer Toward High-yield Fusion Reactor: Revolutionary Circuit Fires Thousands Of Times Without Flaw
Even the most power hungry tin foil hat will be humming like a top with 60 megamperes at 6 megavolts.
Outsider,
"You don't NEED that. It's a WANT. Save up the cash from hocking something - don't use your cc."
Thanks...ROFL.
Cheers,
MLM,
Ah plasma physics. Now, if only the Astropysnuts would apply the knowledge of these engineers to the universe, we might get somewhere.
Cheers,
Well, my rent in Flatbush went up, but it looks like the area is starting to gentrify a little. If I'm still here in a year maybe I'll be able to find something better for less money.
Ross, like I mentioned before, in the 80s a 2 bed. apartment in Moscow cost $1,000. Something is wrong with this picture. Also a couple of months ago I was in Austria (airport) and they wouldnt take $.(I had to go to the exchange office and get euros).
P.S. Thank you for the offer, but I have a lot of friends in Moscow and you know how the Russians are. The only problem is, I always end up with a hangover for the first couple of days.
Broker,
"like I mentioned before, in the 80`s a 2 bed. apartment in Moscow cost $1,000."
No way! That was the time the American left was calling for a copy of the Socialist Paradise. I thought everything was free.
Cheers,
A loss of 60,000 jobs in a metro area of 18 million.
Wall Street is 5% of employment but 23% of income in NYC. So yes, this is significant.
edhopper,
True. In an industry town, unemployment of industry workers has something on the order of a 10x multiplier effect.
Cheers,
Just putting the true price of NYC apt rents out there (3k is low end 1 bd):
Manhattan Rental Market Report | The Real Estate Group New York | TREGNY
$3000 a month for a Manhattan apt will get you a 650-800 sq ft, lower end one bedroom. (one bd non-doorman avg about 3K - Doorman avg about $3800). So far they are not dropping fast enough (if at all) and council just approved the highest rent increase in history (mostly hitting the DIRT CHEAP rent controlled units I would think).
A look at what the bling crowd wants New money has no taste
in NYC
Adding it all up | The Real Deal | New York Real Estate News
We live in a 2-bedroom coop in NYC in a building mostly paid for with 5 shifts of staff/day. We pay $15,000/yr common charges. Most good owned apartment RE,especially in Manhattan
is in coops. The building as a whole are owned by a tenants corperation and run by a board. Most are fairly to extremely tightly controlled so subletting is tightly controlled. Sales need Board approval. New owners are usually financially etc.screened
This market is fairly isolated from the Condo and rental markets.
Not sure what you're trying to say. That Condos will crash, while Co-ops keep there value.
Actually all those things that make co-ops more secure, like the boards, make them harder to sell. I have friends who have been trying to sell a co-op in TriBeca at under-market price for 6 months. Some potential buyers can't pass the board, so no sale.
Also, let's say the condo market falls 30% to 40% (my guess) you think people will pay an extra 40% premium for a co-op over a similar condo. Trust me, you are not isolated.
Ok, I know we're all too cool to rock blog now, but this is in honor of your post CR, and of what might happen next week:
YouTube -
BTW, Manhattan co-ops are restrictive, but not perfect. People still go bust in them -- and then, unlike condos, the whole co-op has to share the loss. (which makes sense they try to avoid this with good screening -tho the boro co-ops can be a lot more lax).
Also in most co-ops you can't rent the apts. And there's the maintenance cost-which has absolutely skyrocketed lo these past few months.
patience said: "condos go rental, sitting on a lot of empty units."
Beware the rental that seems to be better for you than the landlord. Foreclosure may be just around the corner. That's happening to me right now.
Washington doesn't have the job losses (yet; we'll see what the new President and Congress does),
short of a Ron Paul administration, with Libertarian super-majorities in both houses of Congress (at least 60 Libertarian senators to prevent filabusters), there will NEVER be meaningful job losses in DC.
Now some disgruntled Libertarian will dig up some meaningless irrelevant statistic, but that doesn't apply to the new paradigm after 9/11.
Oh wait, you want to buy in Manhattan:
Downtown Condo Listings Snapshot
Size (ft²) $ per ft² Price
Studio 662 1,323 835,000
1 BR 839 1,278 1,145,000
2 BR 1,428 1,425 2,149,000
3 BR 2,279 1,612 3,850,000
4+ BR 3,389 2,005 8,275,000
In case you all can't understand Michael Stipe's warble-y style, here are the lyrics - just too perfect:
Theres a problem, feathers iron
Bargain buildings, weights and pullies
Feathers hit the ground before the weight can leave the air
Buy the sky and sell the sky and tell the sky and tell the sky
Dont fall on me (what is it up in the air for) (its gonna fall)
Fall on me (if its there for long) (its gonna fall)
Fall on me (its over its over me) (its gonna fall)
Theres the progress we have found (when the rain)
A way to talk around the problem (when the children reign)
Building towered foresight (keep your conscience in the dark)
Isnt anything at all (the statues in the park)
Buy the sky and sell the sky and bleed the sky and tell the sky
(repeat chorus)
Dont fall on me
Well I could keep it above
But then it wouldnt be sky anymore
So if I send it to you youve got to promise to keep it whole
edhopper, you are 100% right. I have sold and bought quite a few properties. I wouldn`t touch condos or houses located in deed restricted neighborhoods. It is hard to believe what a bunch of people with nothing else to do, can come up with.(very much like our Congress)
Indian real estate bust is here..A lag of ~2 yrs from US..
The last leg of asset (hyper)inflation in emerging market-commodity complex is crumbling as deflation is bound to set in by next year
Equitymaster.com: 500 Internal Server Error
Broker,
I'm not sure a foreigner could even own property in Moscow in the 1980's.
The one thing that helped Moscovites the most was the ability to sell their flats with no mortgages at all. True, some had no idea of 'value' and sold very cheap.
I bought mine in 99. Old Stalin building (the best) 6 floors with a lift. Novy remont was only $10,000 including parquet, plastic windows, heavy wall removal etc.
If you want to make a whole lot of money, become a Mitsubishi window air conditioner dealer. Lushkov if fed up with those old style, hang out the wall drippers.
Moscow is supposed to be one of the most expensive cities in the world. Not so if you live like the locals. New Ladas for $7,800 and I can still go anywhere by gypsie taxi for 200R.($8)
Alo,
Try this on for size:
YouTube -
Sorcerers of madness
Selling me their time
Child of God sitting in the sun
Giving peace of mind
Fictional seduction
On a black snow sky
Sadness kills the superman
Even fathers cry
Of all the things I value most of all
I look inside myself and see
My world and know that it is good
You know that I should
Superstitious century
Didnt time go slow
Separating sanity
Watching children grow
Synchronated undertaker
Spiral skies
Silver ships on plasmic oceans
In disquise
Of all the things I value most in life
I see my memories and feel their warmth
And know that they are good
You know that I should
Watching eyes of celluloid
Tell you how to live
Metaphoric motor-replay
Give, give, give!
Laughter kissing love
Is showing me the way
Spiral city architect
I build, you pay
Of all the things I value most of all
I look upon my earth and feel the warmth
And know that it is good
Cheers,
Of course if we're going to look at what's wrong...we need to examine the war pigs. Without reform here we are totally toast.
YouTube -
Cheers,
outsider:
a few things help
1) MN is cheaper than NH.
2) we are DINKs so save a lot
3) we are frugal (except for the recent car purchase)
4) many of our vacations are cheap because we have friends/family around the world
5) I didn't include health or disability insurance etc as that's taken out of our paychecks.
6) we often entertain at home (I love to cook) and we have a great space, so we save that way
7) we are both fortunate that we are able to buy neutral clothing and still look good. thus we don't buy clothes that often (I buy clothes maybe once per 12-18 months)
8) a lot of the things we love to do happen to be free. (biking, tennis, reading, gardening, talking)
Lighter flicked, held up, on such a sabbath day -thx misean.
Actually all those things that make co-ops more secure, like the boards, make them harder to sell. I have friends who have been trying to sell a co-op in TriBeca at under-market price for 6 months. Some potential buyers can't pass the board, so no sale.
There are eight million stories in NY and this is one of them
Seriously,every coop is different which adds to the interest of NYC.
In a country which generally conformity,uniformity and generally a comatose life, NYC thrives on non-uniformity and living with your wits intact and always active.The second time round one learns to interview the board as they interview you, to find out the buildings value system. If your friend was on the board would he act any differently?
Ross, I wasn`t talking about foreigners. I paid ~$800 (8,000 rubles-at the time it was 10 to 1 on the black market-real market) for my first apartment in Leningrad (now St. Petersburg), in 1987.
P.S. The exchange rate at the bank was like $5 for 1 rubla.Right!
Alo,
Thank you, I'm just the dj.
I watched the war pigs video...I'm depressed now.
Cheers,
Good point plschwaartz.
here's a very gross estimate of our expenses, I'll try to look them up more in detail later:
PITI: $1780
Car insurance: $196/mo (total, both cars)
Gas: about $180/month now
car washes: negligable. maybe $100/yr
Utilities: we do a payment plan for electricity, heat, and all that (it's the same every month and it resets every year): about $350/month
Food: unsure honestly. Maybe $600/mo?
Telephone: $45/month
modem: $55/month
Sat TV: $34/month
XM: about $24/mo
eating out: maybe $200/mo? (we don't do it a lot because I'm gettin fat)
then of course there's all the other things I'm forgetting.
Vacations: we tend to be cheap, usually visiting friends/family so it's just a matter of a plane ticket. then once per 1-2 years we have the blowout (like Paris/London)
Medical insurance and that type of stuff is all paid from work and isn't in that $4400/mo.
and also car purchases isn't either.
also: car repairs are included in the $4400/mo... but they're sporadic. I think I had maybe $4k of repairs on my old car from 2003-2008.
anyway, that's a rough estimate... I know I'm forgetting things
it also helps that we have no debt. (we paid off all school loans, we don't have cc debt or second mortgages or car debt or anything like that)
and lastly, our expense account will go up this year due to gas increases, food increases, and energy increases (I think the bill resets in August or something).
plschwaartz-
Thanks for the morning humor!
$1k/sqft renovation costs
$1.2k/sqft condo sale costs?
That's obscene even for SF.
You might as well stay in a $500 suite at a hotel for that rate, at least you wouldn't have to pay all the extra fees they're going to tack on.
Frankly, the article reads like an ad for stupidity:
Ive never met a project where you dont exceed a budget, Justin said...
If you can't find a decent robe hook for less than $200, you're blind.
I wonder what incentives the Boy Wizard is offering on the $20,000 a month rental apartment his company recently bought in NYC? Maybe a really close look at his "wand" that has stirred up so much controversy?
"The number of co-op and condo units and townhouses on the market jumped 11 percent to 7,212 homes between March and April..."
7200 units on the market in a place the size of NYC?
That doesn't seem like an incredible lot to me. I just checked and my Chicago-suburban village of 8000 has 238 single family homes/condos on the MLS right now and we aren't in some terrible recession here.
I'd like to have this explained to me.
chester, look at miller samuels reports -not sure how independent they are but it gives you an idea of sales - not really huge in Manhattan (also the 7212 is manhattan only - up from 6000 or so in 1st q 08 I think:
2282 - sales in 1q 2008 - ave quarterly sales in 2007 - 3358
http://www.millersamuel.com/reports/pdf-reports/MMO1Q08.pdf
For the person asking about negotiating with the landlord: if you want to play softball, have some comparable rents handy, and when they propose a rent increase, show them what other buildings are asking. If you want to play hardball, threaten to move, and be ready to do it if they don't budge. A prior complex tried to raise the rent from $1500 to $1900, and wouldn't budge; I moved.
My current expenses, by way of comparison; note that I'm a hopelessly single person, so some expenses are lower:
Rent: $1450/mo (1 BR, Wash DC)
Car Payment: -
Car Insurance: -
Gas: -
Car Maintenance: -
Public Transit: $30/mo (gov't benefit pays transit to/from work)
Utilities: - (incl in rent)
Food: ~$300/mo
Telephone: $45/mo
Internet: $15/mo
Recreation: $100/mo max (lots of free stuff in D.C.)
Electronics, clothing, etc. are as needed, not regular purchases. Who says you can't live for cheap in the city?
@dashingdwl - your friend probably bought that apartment with $2mil cash that he earned at his job. But think of it this way - if he worked at Goldman, his job was probably bogus, and really should have only paid him half that, which is maybe what the apartment is worth. So in the end, he is fine, and should still consider himself lucky. Because, personally, I think his job was probably not worth creating, since it is likely part of the systemic problem that is going to put our economy in the dumper in short order.
peripheral v - uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?
OPEC president sees oil at $170 this year
Khelil blames Fed, falling dollar, increased demand for surging crude prices
OPEC president reportedly sees oil at $170 this year, blames Fed - MarketWatch
So the S&P dude who predicted year end prices to be anywhere between $41 - $141 maybe wrong!
What I don't get is why the high price financials need to be clustered in NYC. I suppose there are good reasons, but it seemed like an anachronism after the invention of the telephone, and even more so now.
Geoff writes:
peripheral v - uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?
ac's all Taco Bell diet. Morning, noon, and night,...some times I worry about that boy.
"uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?"
Grow a garden, hunt, fish, gig frogs, and you can eat for less then that. Been there done it you just have to be creative and I don't mean stealing shit either. This must be your first real recession huh boy?
Hey anonymous - my post was about living in Wash DC on $300 a month for food. I highly doubt a person renting a 1400 a month apartment is going to get a backyard with space for a garden.
And who you callin boy, punk?
chester
That doesn't seem like an incredible lot to me. I just checked and my Chicago-suburban village of 8000 has 238 single family homes/condos on the MLS right now and we aren't in some terrible recession here.
I'd like to have this explained to me.
As a comparison, Chicago is leading the condo crash as compared to NY. They supposedly have 5,000-10,000 or so new condos coming on the market for each the next two years. First quarter sales were reported as 208.
Most of NYC's population can't afford to buy. When those who can have second thoughts, there won't be many people buying.
I feed my son and I for 300 or less per month. It is doable, and not ramen 24/7 either.
It is very possible, even with the constant rising prices in the grocery store.
Store brand vs name, bulk rather than single serve, skipping most junk and very basic but balanced meals.
Also helps to stay out of the organic/Whole paycheck/Trader Joe. Think safeway, sav-alot and walmart.
Shrimp, steak, roasts? nope
Hamburger, chicken, rice dishes, pasta, beans lentils soups etc. yup.
The whole whine of I just caaaaant feed myself/family for less than so much per month is going to have a very harsh meeting with the real world.
Broker writes:
The exchange rate at the bank was like $5 for 1 rubla.
"1 rubla" - are you from Moldavia?
"I feed my son and I for 300 or less per month. It is doable, and not ramen 24/7 either.
Store brand vs name, bulk rather than single serve, skipping most junk and very basic but balanced meals.
Also helps to stay out of the organic/Whole paycheck/Trader Joe. Think safeway, sav-alot and walmart."
Just going to Costco or Sam's Club will save a ton. A spaghetti dinner purchased at one of these places costs about 50 cents per person (60-75 cents a pound for pasta and a few bucks for a giant can of good name-brand sauce).
Huge bags of rice, flour, sugar, etc. are cheap.
And 12th percentile: I know that cities and suburbs are completely different animals when it comes to real estate, and I haven't studied downtown Chicago's situation. There does seem to be a whole lot of construction going on down there, but I don't see any evidence of panic selling.
First Q sales of only about 200 is really surprising to me, given the volume of construction and the amount of advertising I see.
Peripheral Visionary | 06.28.08 - 1:13 pm | #
Thanks for the tips. We've been printing out craigslist comparisons to show the landlord. We'll see. A good thrifty budget you have, too. We've gotten groceries down to ~400 pm, but it means we -- that is, I ;)-- make everything from scratch. And we still buy organic stuff (Kroger, farmer's market), so it's possible. Most of the packaged stuff is junk anyhow.
The "rubla" is the unit of currency of the Republic of Wachovia.
I can eat well on $300 per month (I'm single), and that would include a couple of bottles of wine per week.
I rarely, if ever, eat out, and I make everything from scratch.
The catch: one has to know how to cook, and enjoy doing it.
my fav
YouTube - Are you addicted to porn?
Cheers,
Misea
The "rubla" is the unit of currency of the Republic of Wachovia.
If GM could get the same mileage out of its cars as we get out of a simple typo, there'd be no crisis.
Ottawan, the answer is yes.
Broker, no offense
I'm russian but was born in Moldova and lived there till immigrated to Canada. Good to see "zemliakov" on this forum. Cheers
Tank, baby, my sweet, hunky herald of doom! Wassup?
(You are missed at J.M.G.)
There's double the number of lobbyists here in DC since 2000. It turns out there's a lot of skim when you move $3 trillion of other people's money through town every year.
Our market is another good case of wide differences between zip codes. The exurbs have been hit hard by subprime -- about an hour outside DC in Manassas and Prince William county there was a lot of greenfield McMansion building and 40% of the loan volume was subprime. But who wants that commute? Inside the beltway (Arlington) has held up better, nominally flat except for condos, which are dropping b/c of excess construction. Northeast DC is getting hit harder, some investor owned renovations going to the banks and listed at 40-50% below peak in 2006. Payment option ARMS are going to hit DC inside the beltway harder than subprime.
"peripheral v - uh, who the heck can eat for $300 a month anymore? Is that the Ramen diet?"
OK, maybe closer to $400/mo if I was to be honest. And yes, there is some ramen in there, though not much.
The "secret"--not much of a secret--is I don't eat much. I can stretch most restaurant meals into two. Eat half, take the other half home; voila, $10 meal becomes a $5 meal. Another "secret" is that some processed foods are dirt cheap--not good for you, but it's hard to beat hot dogs, ramen, pot pies (probably the least unhealthy option in that category) for price per meal.
But the best approach to getting food expenses way down is by cutting restaurants and prepared dishes and buying raw ingredients: fruits and vegetables from the back yard (even we city dwellers have communal gardens where you can reserve a small lot), flour, rice, bulk pasta, bulk hamburger, and whole chicken from a discount grocery store. A lot more work, but a lot less money; that's how my mother did it.
One other secret: Mexican. Price per calorie really can't be beat. Tortillas, bulk refried beans, bulk salsa, and just a little bit of meat, maybe a few vegetables to the side, extremely cheap food. Another one of my mother's secrets to affordable living. The digestion system takes some time to adjust, but, well, you knew that . . .
This thread is getting to be the next best thing to my beloved Tightwad Gazette. I highly recommend, if not for the tips, at least for the laughs.
TED: Ideas worth spreading
great ideas
Yummy food topics, great.
My tip. Drop all dairy foods, cut back on wheat, not too much meat, load up on veggies and fruit, drink shitloads of water and of course, every week you get one cheap jug of Chardonnay. Grow your own as much as possible, buy in bulk, join food co-ops, turn down fridge and add gallon jugs of water in freezer to help store cold energy, turn off the air, wear wool (see IceBreaker Icebreaker
) and shiut down heat. Boycott gas and use a bike and walk. Keep healthy!!
Piss off
Jeez you guys are making me hungry.
I had a couple several weeks back who wanted to lease a half acre plot to put in a garden. This is sooo 70's. So is the economy...
Remember, morning road kill is the most important road kill of the day. I only eat free range road kill. Gotta preserve my PC status.
A doctor friend is trying to sell her 1bed co-op on the West Side. Pretty cheap, 595, now lowered it 30k. IMO, she needs to drop another 100k to move it. Her maintenance is up 6% this year, and you can bet a fuel surcharge may be in her future. Her agent (from corcoran) describes the market as a "stand-off" Listing times have doubled.
Also, a stunning amount of new condos are nearing completion and should hit the market in the fall/winter. Construction cranes and new towers are everywhere.
OT? The local newspaper (here in semi-rural Oregon) says that the county has 1000 homes for sale, and they are selling at 50 per month.
That's twenty months supply. But of course the story had a positive spin to it--it's now a buyer's market!
OT, but good:
Robert Shiller on Infectious Exuberance (and infectious pessimism):
Infectious Exuberance - The Atlantic
(July/August 2008)
"Benjamin M. Friedman, in his 2005 book, The Moral Consequences of Economic Growth, cites abundant historical evidence that when economic prospects look bleakespecially for long periods of timeintolerance, racism, and other reactionary impulses flourish. As more people experience hardship, trust between them tends to diminish, and the social fabric itself seems to fray....
We recently lived through two epidemics of excessive financial optimism. I believe that we are close to a third epidemic, only this one would spread irrational pessimism and mistrustnot exuberance. If that happens, our economic problems will become much worse than they need to be, and our social problems will multiply. Only if we heed the lessons of the boom can we keep the bust from causing lasting damage."
If cheaper housing is the new chic, wait for HGTV to come out with something like "Dip That House".
First episode is some guy in Calif who spends way too much time online and has a '67 Camaro on blocks in his front yard.
job losses can't happen in DC?
what better place to have job losses than one that produces nothing?
I don't want 2 months free rent, I want a faraday cage or stealthy wallpaper(whichever is cheaper); it saves battery life for my tin foil colander device for when I'm mobile.
This one from Ben`s blog is for the history books. "The CAR also sells St. Joseph statues through its online store."
I wonder when they are going to start selling KY.
So much for those claiming "NYC is immune". The fun is just beginning there.
p.s.: Oh, and it'll hit DC, too.
Heh, just happened to be browsing Craigslist in my area. I signed a 1 year lease in April and my apartment has been advertising apartments at ~ 10% less than what I signed up for and less than a year ago when I started to live there.
Definitely high-end as well... I imagine this will give me some leverage... although it is a complex... its a bit scary asking for a lower rent, but this will give me some ammunition in the future.
what do you mean ramen diet? are you kidding? my girlfriend and i spend easily less than $250 a month on food for the both of us combined and my 4 year old daughter comes over 3 days a week to pillage my pantry, and we are by no means on a ramen diet. i make pretty much all our food from scratch so i can imagine that helps shave costs off, but still imagining that you cant eat for under 300 as a single person seems like a strange observation to me.
This is in las vegas, so i dont know if we have an unusually low food cost out here, but i strongly doubt it.
You want REAL-TIME Manhattan Inventory trends...I spent 8 months in BETA with Streeteasy and got the charts up. Only have data from NOV 2007, but at least you can see what is happening, as it is happening now, instead of waiting for lagging quarterly reports. 1MTH, 3MTH, 6MTH links above charts; more options as we have a few more months data...
INVENTORY
NEW LISTINGS/CONTRACTS SIGNED
PRICE REDUCTIONS
On Topic: Do other cities besides New York have co-ops. If not, how come? Class issues?
Off Topic: "Make no little plans, said Daniel Burnham, one of Americas great urban architects. They have no magic to stir mens blood.
Or..."It's the infrastructure, stupid"
Premium content | Economist.com
Urbandigs, thanks! what a great idea -- have you all gotten a lot of freaked out calles from Manhattan RE industry (they kept this data really hard to gather for a long time)
Misean,
"No way! That was the time the American left was calling for a copy of the Socialist Paradise. I thought everything was free."
If by "the American left" you mean "almost no one on the American left", there might be some truth to this statement. Otherwise, you have the 1980s with the 1920s and 1930s when there was at least some level of support for the Soviet model.
Alo - well, many brokers did question why I would want to do this!
Transparency is a hard thing to come by in a city where so much wealth is created via real estate. But in this environment, broker babble isnt working anymore and used car salesman antics will probably lead to little or no business over the next few years for new agents without a solid referall/contact base.
Enjoy! ill add more to these charts as we get over 12 months of data.
Uncle William,
I saw what those blood-stirring plans led to every time urban renewal fever swept the nation.
Absolutely NO THANKS!
I think Haussman is one of the few that got it right, but Paris was an absolute dust bowl while it was being built. Seventy years of noise and filth.
I just had a $45 breakfast this morning.... sorry but I don't know how to make a great omelette at all, nor do my pancakes and waffles taste the same as the good breakfast spot I took my wife and son to. On the plus side that's enough food to have breakfast tommorrow.
I don't budget but I'd imagine we are in the $500-600 range. My wife mostly home-cooks all of our dinners... but I'd say my lunches are a bit of a problem ($5-10/day adds up), as are our eating out splurges.
ac's all Taco Bell diet. Morning, noon, and night
$0.89 burrito + $1.50 coke = $2.39
$2.39 X 3 per day X 30 days = $215 per month!!!!!
Awesome cost savings.
You won't live long enough to enjoy it, though.
Re: "Dip That House"
I just watched the next episode of a couple that moved back into the old trailer they were in, before they traded up; it was kinda sad, but not really. They looked at the whole experience as a vacation, kinda like a honeymoon and 50th anniversary all rolled into one contract. They eat cat food now, and love it!
Next week is a homeless couple that found a meth lab and made enough for a no-doc loan, now they own a real estate lab.
While I was surfing channels I also came across, "Name That Realtor" and that was also kinda sad, but it was one of those reality shows that is part game show and they have a RealtorCam strapped on the realtor of the week and this fat slob was bitching about filling his SUV up and filing it with kids to go on home tours and keeping the air on while Mom & Dad look around. Dumb huh...
Must be kinda slow ehh? I thought this was a working week for Bernanke but I assume he's on Warsh's yacht having another roundwith the little lady wife swap thing?
Washington Mutual (WM) crossed the magic threshold of $5. Many mutual funds have a requirement about market cap and price. Those with a threshold of $5 may have to dump it if it does not quickly recover.
On a purely fundamental basis, more writedowns on account of Alt-A liar loans are coming. More people will be walking away from their homes in California and Florida. Approximately 75-80% of those in liar loans only make the minimum payment. Negative amortization increases every month in those loans. On top of that, home prices are falling rapidly. Add the two together and anyone who put down even as much as 20% is now hugely underwater.
At some point escalation clauses will kick in. Escalation clauses vary by contract, but typically vary between 110% of the loan to 125% of the loan. Those clauses should be kicking in now, in mass, based on price depreciation alone.
Have they in practice? Think again. It would be the kiss of death for either WaMu or Wachovia to start enforcing those clauses, homeowners would immediately default. Instead, both banks pretend they are well capitalized when it is increasing apparent they are likely insolvent.
I fail to see how either of those banks survive. The Fed's policy so far is to have the relatively strong take over the pathetically weak. Examples of this are the shotgun wedding between JPMorgan (JPM) and Bear Stearns (BSC), and Bank of America (BAC) and Countrywide Financial (CFC).
Anonymous said: "Those clauses should be kicking in now, in mass, based on price depreciation alone."
No. Those loans are based on the appraised value in the original loan file, not current appraised values. The LTV 'trigger' has nothing to do with current market values.
Please feel free to offer your correction if you think I'm wrong.
Anonymous two above me just cut and paste that whole post from Mish's latest.
Is that you Mish or is someone stealing your stuff.
Nouriel Roubini (via Naked Capitalism) says we're all doomed again:
"The deleveraging process for the financial system has barely started as most of the writedowns have been for subprime mortgages; the writedowns and/or provisioning for the additional losses have barely started. Thus, hundreds of banks in the U.S. are at risk of collapse. The typical small U.S. Bank (with assets less of $4 billion has 67% of its assets related to real estate; for large banks the figure is 48%. Thus, hundreds of small banks will go belly up as the typical local bank financed the housing, the commercial real estate, the retail boom, the office building of communities where housing is now going bust. Even large regional banks massively exposed to real estate in California, Arizona, Nevada, Florida and other states with a housing boom and now bust will go belly up."
[emphasis mine]
Average Joe said: "Anonymous two above me just cut and paste that whole post from Mish's latest."
That's why I'm in favor of posting by registered (free) members. It would make managing the killfile a lot easier.
UrbanDigs, not surprised, but in the end transparency will help everyone- even the petulant RE industry. They hyped the "NYC is different" line ad nauseam through the bubble, and they are now surprised sellers won't budge on high prices and properties aren't moving, and their commissions are drying up. Go figure.
You oughta let the nyc media know this site is out there - maybe they'll start writing stories that are actually data driven, rather than RE-industry source driven. Congrats and best of luck!
Burnside: what are you referring to?
"I saw what those blood-stirring plans led to every time urban renewal fever swept the nation"
I wasn't around to gauge the difference between pre and post Haussman Paris, but I certainly like the results. Certainly more human than Albert Speer's Berlin or Stalin Style.
It is hard to find examples of major urban renewal unaccompanied by fascism, but we can do it, can't we?
Cracking dams, falling bridges, ech.
I visited Amsterdam last summer and met a fellow who worked as a civil engineer. He told me that Holland had offered their expertise with water management years ago, knowing that New Orleans was a disaster waiting to happen. Rebuffed. Not even politely.
Uncle Billy,
Why do you love FDR. He was just another fasciste.
Thus, hundreds of small banks will go belly up as the typical local bank financed the housing, the commercial real estate, the retail boom, the office building of communities where housing is now going bust.
I can definitely say that there will be a bunch of regional banks going belly-up within a year or so down here in Charleston, SC. For some reason, the housing crisis has extended pass subprime, but when it does it will be ugly; lot's of construction loan exposure on the beaches. Look at the recent sales info on these houses...
2808 Jasper Blvd, Sullivans Island, SC 29482 - Zillow
2302 Atlantic Ave, Sullivans Is, SC 29482 - Zillow
Thanks ALO! Im trying to, but its hard to compete with top producers who hire PR guys to get them more press..
When I see a big Manhattan RE name on tv, obviously I cant name names, I laugh. While their business may be booming, and they may feel like the controller of the market, they have no clue what is going on in a macro sense. Again, not generalizing, as there are great brokers out there that are very smart about the issues we face, but the ones that make it to CNBC, just do not tell it like it is!
its a bit scary asking for a lower rent, but this will give me some ammunition in the future.
YLSP | 06.28.08 - 4:16 pm | #
Why? It's just business. At the end of the lease you would offer to move into one of the lower rent apartments. It's a little trickier with the lease still in effect, but I'd ask if there's something they could do. Try to appeal to their sense of fairness, no one should be surprised at the request.
Argento,
What line of work are you in? I've vacationed in the Charleston area and liked it very much but honestly did not see much beyond service industries as far as employment. Perhaps more a function of being in vacation mode and not paying close attention.
I wonder when the Florida/Nevada/California foreclosure wave will hit NY. We have had just as much subprime slime and speculation as they did.
Tough summer ahead. 401k holders getting crushed will liquidate, and cash strapped seniors will be inclined to sell securities to meet increased cost of living. All this while the increasing number of bears short the piss out of equities.
Will SP500 hold 1050 ?
barely,
I had a debate on a different website with someone talking about "stocks only go up". It actually sounded like the argument that housing only goes up, "over 10, 15, 20 years the stock market always goes up".
I tried to make him look at N225 but he proceeded to quote Buffet and talk about "cheaper for me".
Mike in Long Island:
I'm actually in law school(gasp!) elsewhere, but my roots are in Charleston. Between Charleston and law school, I'm in a weird bubble where no one seems to understand the bigger macro-economic collapse that's coming. Charleston simply doesn't have the employment infrastructure to support these kinds of prices. It's mostly tourism and service industries driven by the wealth effect of hundreds of millions of dollars in Yankee money buying up beach houses and historical property.
This is a bubble waiting to blow. And to make matters worse, many Charlestonians have a weird thing about out-of-town banks, so we have a lot of highly leveraged boutique banks.
Speaking of 401K's & Baby Boomers:
Bear Stearns arrests linked to hedge fund
National Economic Briefing
"Employees are stopping contributions to their 401(k) plans out of pure desperation," she said. "Normally, a human resources person would encourage them to save, remind them of the company match. Now, with everything so expensive, what can they say?"
Comfortable retirement a fading dream for many
Comfortable retirement a fading dream for many
When someone asked me a few years ago when I would like to retire, I said 68, and here I am going on 70," Britton said.
For more Americans, the dream of a comfortable retirement is fading.
The typical small U.S. Bank (with assets less of $4 billion has 67% of its assets related to real estate; for large banks the figure is 48%.
OK, lets try one and see if that is true. I picked one that I know locally, but is a ~$2B small regional (south Georgia)
Total Assets - $2.118B
(RC-C.1) Loans secured by real estate $1.360B ( 64.2% )
And another bank (similar size small-regional)
Total Assets - $2.674B
(RC-C.1) Loans secured by real estate $1.466B ( 54.8% )
While the 67% seems high, I'm willing to bet that 60% is a sure thing (for many banks of this size).
Nice Day, +30.50 Points In The Virtual Trading Room
Inside Futures: Relevant trading-focused information authored by key players in the futures, options and forex industries
The Fed could have crushed the speculators yesterday with just a quarter point hike and the threat of further hikes; however, Ben chose to speculate himself - with YOUR money - and did nothing. I say he speculated with your money because his lack of action will cost you more at the pump, and in your retirement accounts. Across America IRAs & 401k's are losing money as they are beaten down by commodity inflation - especially today with a Dow close of -358.41! Thanks again Ben.
Why are we so miserable?
Why are we so miserable? | StarTribune.com
The United States has narrowly avoided an official recession so far, thanks in part to tax rebates and strong exports. And by many historic measures, the economy isn't doing as badly as everyone might think.
ROTFLMAO!!! You read the whole story of how bad things are, then they end it with a Republican Mantra that things are really great!
Energy and other commodity prices are not rising due to "inflation", rather they are rising due to supply not meeting worldwide demand at lower prices. Any attempt to correct this by raising the price of money domestically will do nothing but make us less competitive internationally. The damage was done the day we exported the first manufacturing job to China, and put into overdrive when we started exporting high tech jobs to India. Now they are our competitors for commodities. In they case of oil they are geographically closer than we are to major supply chain areas like the Middle East and Russia. Blame God I suppose, but interest rates have nothing to do with that. What would help would be to curtail our simultaneous wars on Muslims, Venezuela and Science. That is an ignorant combination.
Uncle Will,
Can't answer you very well here but, as it's the weekend and the hosts are permissive, let me see about a short version.
Haussmann was an experienced public works director, not an urban designer as such. He had the confidence of the monarchy and, hence, an effective blank check. The brief was the transformation of Paris. I see no possible contemporary parallel.
His work was based on a rare combination of experience in infrastructure, practical necessities and a personal (very mature) aesthetic. Encrusted as it is by subsequent 'urban planning' his original success is still evident in modern Paris.
I don't suppose many realize his work started in the 1840s. Those Boulevards, which did very well in accommodating motor traffic as recently as 1960, were devised almost a century and a half ago for carriages.
Under his supervision, the city gained an excellent water supply, storm drainage, sanitation, a system of parks still enviable today, and - by ignoring the ubiquitous grid - a web of arterials which make direct transits to scores of intraurban centers.
City planning isn't done this way. Yet we tend to admire Paris, even those of us not especially fond of the French.
No. I can't think of any grand designs of the recent past which meet that standard. What would that be? Brasilia? Reston? Chandigarh?
afterthought:
Cities emerge over time. The best of them continue to reflect their own history.
It's rare to see examples where they undergo radical, corrective surgery as was the case in 19th century Paris, though most of the original fabric there was left intact. The current mode seems bent on erasing all to make way for a new mode.
Olympic Beijing comes to mind.
RayontheFarm:
Where does one get the RC-C.1 data?
thx
OT; Newsweek: John McCain defaults on California home
Newsweek is set to publish a highly embarrassing report on Sen. John McCain, revealing that the McCains have failed to pay taxes on their beach-front home in La Jolla, California, for the last four years and are currently in default, The Huffington Post has learned.
Under California law, once a residential property is in default for five years, it can be sold at a tax sale to recover the unpaid taxes for the taxpayers.
The McCains own at least seven homes through a variety of trusts and corporations controlled by Cindy McCain.
McCain campaign scrambling... Developing...
Daily Kos: Newsweek: John McCain defaults on California home
Comment: McCain has 7 houses but Obama's the elitist. (18+ / 0-)
Makes perfect sense to me.
Cynical wrote: "Energy and other commodity prices are not rising due to "inflation", rather they are rising due to supply not meeting worldwide demand at lower prices. Blame God I suppose, but interest rates have nothing to do with that."
And I guess that this supply not meeting worldwide demand started sometime in January, when oil was still around $70, and coincidentally (according to you), the Fed started the quickest easing cycle in its history.
Uncle Billy Loves FDR writes:
On Topic: Do other cities besides New York have co-ops. If not, how come? Class issues?
NY has a legal framework allowing for for shareholder-owned real estate. I don't know how many other states do, but it's few if any.
I'm an NYC co-op owner (shareholder, technically) and am SO glad we're in a co-op and not a condo. Our building has strict financial guidelines for buyers -- trust me, it's worth the slight dampening effect on prices. Yes, our prices are somewhat dependent on how the condo market does, but that assumes the condos are going to stay condos. They're going to turn into high-turnover (and high-rent) rentals.
Argento,
Where does one get the RC-C.1 data?
The RC-C section in a FDIC CALL report. You would have to manually add up the various detail lines in RC-C, subheading 1, to get the totals.
Each bank has to submit CALL data to the FDIC on a quarterly basis. The data (usually) becomes available 15-30 days after the quarter ends. Go here to search for banks and download/view as PDF data...
FDIC Institution Directory
Under California law, once a residential property is in default for five years, it can be sold at a tax sale to recover the unpaid taxes for the taxpayers.
If Florida, the counties sell 'Tax Certificates' each year (to keep the revenue flow intact), then the certificate holder gets to force a tax sale, if the tax certificate amount ( + interest ) is not paid after 3 years. Perhaps California does it differently.
Ray:
OK, that's what I was thinking. If you go to the information gateway, you can change the pull down to get the financials as a percentage of assets, and then click on the "Net loans and leases" which pulls up the "All real estate loans" data.
Here are several Charleston boutique banks, popular with the locals.
Assets: 509.5M
%RE = 66.97%
Assets: 562.8M
%RE = 68.37%
Assets: 2.855B
%RE = 62.98%
Not surprising the finance layoffs are starting to hit Manhattan a little.
Misean writes:
my fav
YouTube - feature=user
Cheers,
Misean
Misean | 06.28.08 - 2:51 pm | #
So Misean if after watching that vid I'm undressing that porn therapist in my mind... does that mean I have a problem & should give her a call?
Just askin'...
The boulevards of paris were buil for swift movement of troops and killing zones for artillery in case of revolt.
Thanks Alykatz. I've heard that in Northern California there was (is?) a trend where multiple borrowers could all cosign together for purchase loans on apartment buildings. Don't know to what extent they operated a co-op after that, but I imagine that for it to work they would need a very detailed contract.
Burnside: I can't think of any modern examples. Jerusalem popped into my head briefly, but flew out immediately. London has some nice examples of renovation that preserves the character of old buildings I think. But on a grand scale? Can't think of any, but I'm hardly a world traveller these days. Will take a look at the cities you mentioned.
I miss Tanta
market may be softening - and about time - but it has a LONG LONG way to plunge before it gets back to the numbers common around 1999-2003 in terms of rents or prices.
In the tony areas of brooklyn (there are several that are arguably nicer than upper west side) brownstones fetch 2.5 million to triple that. They could be had for 30% of those prices a mere 5 years ago. Places that I rented in 2001 for two thousand bucks a month are renting for three to four thousand bucks a month now. Co-ops transacting for 900k to 1.1m now, were selling for 400k in 2002 ..
The numbers are even more startling for new york (most of it). if I had a time machine I could go back to 2002 and triple to quintuple my money by listing the place today. If I borrowed a lot from the bank, I could increase my investment by an order of magnitude..
seeing a drop in prices to those around just a year or two ago is very unimpressive. Compared to cali or florida the market is still white hot and only those who paid top dollar 12 months ago, and on a 90% mortgage, and wanting now to flip, are showing a loss. I'm really skeptical that prices will drop to even 2002 levels. New york and brooklyn is one of the few places were everything is walkable. If oil keeps rising this aspect supports the 3000+ rents and 1m+ apartment prices.
Argento,
Thanks for confirming what I suspected. I remember taking a carriage tour of downtown Charleston and part of the guides talk was about one particular house known as the narrowest house in Charleston - it was at best 15' wide and maybe 60' deep and recently selling for north of $600k (this was 3 or 4 years ago). I also looked at some of the properties on Kiawah Island and was left wondering who were all these people who could afford the prices they were asking...
Kiawah is absolutely beautiful by the way. Way OT - I brought my surf fishing gear and I would go down to the beach on Kiawah early in the morning and catch black tip sharks to 3 or 4' - you should have seen the look on this womans face who was up early jogging - don't think she went back in the ocean for the rest of her stay...
So ... Broker is a GYPSY! Huh.
Kona's Gold writes:
"The Fed could have crushed the speculators yesterday with just a quarter point hike and the threat of further hikes"
It's been so obvious for years, and more so during the last 18 month oil and commodity price run-ups, that the fed has no interest whatsoever in controlling inflation, that it raises the real question of what their intention is for dealing with the impending oil, ag and material price spike blow-off.
On the one hand their efforts are so "possessing or acting with the desire to do noble and romantic deeds, without thought of realism and practicality, romantic to extravagance, absurdly chivalric, apt to be deluded", that I think the leader's name should be changed to Ben Quixote.
On the other hand there arises the possibility that their plan is more 'cunning, scheming, and unscrupulous', involving perhaps words such as 'rationing' and 'price controls', in which case the leader's name might best be changed to Ben Machiavelli.
Patience is right about the "just tell them you're moving" tactic to get your rent lowered.
Worked every time for every person I know who tried it in Seattle during downturns.
Assumes there are empty apts. in your building and that you've been an okay tenant of course.
Co-ops vs. condos: Friends of mine got a screaming deal on a co-op during the last Manhattan RE crash.
Co-ops may be more stable than condos during relatively stable times, but all bets are off when markets crash.
Comment: McCain has 7 houses but Obama's the elitist. (18+ / 0-)
In USA-speak, if you appeal to intelligent people, you're an "elitist".
If you appeal to stupid people and serve the interests of rich people, you're a "populist".
"Now they have a real estate lab."
This is where they mix the toxic securities.
"In the tony areas of brooklyn (there are several that are arguably nicer than upper west side)"
Only someone marooned in Brooklyn could come up with that line. Though there's no reason why you shouldn't try to make the best of your circumstances.
And it's not oil prices or "walkability" that will impact Manhattan prices...it's the loss of jobs in the financial sector...5% of the jobs there provide 23% of the city's income. Falling tax revenues will cause greater cuts in schools, public services. And the NYSun reported the already underfunded public pension funds have investment losses of billions, and those numbers are only up to May. Newer losses not yet calculated.
NYC is not that far from Vallejo.
Also Justin,to be fair, you may not have lived in NYC long. Just check out the NYTimes Re sections from '91 or '92 etc. Filled with articles on how to stop the bleeding on apts. bought in the roaring 80s. How to find a tenant, any tenant. Manhattan crashed hard in the early 90s...and no neighborhood escaped. Not one.
Brooklyn Heights is every bit as nice as the UWS. Pierpont Street give you a clue?
If you bought in '87 you probably broke even in '97. How soon they forget.
I feed my son and I...
Why do so many people think "I" is an object pronoun? They wouldn't say "I feed I" but rather "I feed me" so obviously it should "I feed my son and me..."
The boulevards of Paris were built for swift movement of troops and killing zones for artillery in case of revolt.
Alec, I've heard that many times, seen it in print as well, but have never succeeded in locating a contemporary citation. While it sounds rational, I note all that mobility and clear field-of-fire was of little enough use to Louis-Phillipe in 1848.
But I'll take another look.
"Brooklyn Heights is every bit as nice as the UWS"
I'm glad you're trying to make the best of your circumstances. It shows the right spirit.
Oh Fried, thanks for your sympathy. It's hard to cope here in da boro with its more reasonably priced housing, less crowding, nicer restaurants for half the manhattan prices, and that pesky diversity and arts scene that fled Manhattan years ago. If I were more pretentious sort, I'd jump off my brownstone.
Not having to pay for Rover's doggie spa stay on moving day will help those severance paychecks last longer. Scary on all levels.
Justin, the only reason New York hasn't had a 20-percent-plus real estate decline yet is because all that Fed "lending facility" money flows first to Manhattan.
By the way, The Northeast (which includes Manhattan co-ops and condos) is most reliant on oil for heating. (No, you can't use "white-hot prices" for heat.)
alykatz | 06.28.08 - 9:07 pm | #
What happens if couple of co-op owners loose their jobs (They are in the financial industry). They walk away from the co-op because they cant find buyers meeting criteria/break even price.
(You sue these previous owners/co-op owner and find they have liquidated their assets declared when purchasing).
I guess the rest of the co-op owners have t absorb that loss. !!
But the shareholders in my building didn't overpay. And the co-op board requires buyers to have substantial assets in the bank, much more the mortgage companies do. Yes, if the next Great Depression hits we'll be f'ed, but I'd also be f'd if I were still a renter and the landlord wasn't getting rent from my neighbors. Either way, the $ for building services disappears. But here we can run the building for our mutual benefit instead of the landlords' profit.
Oh, and by the way, Brooklyn ROOLZ. I grew up in Manhattan and have no interest in moving back. Manhattan is an overpriced theme park now and I only go there when I have to (work, symphony, my mom who will never leave the zzz Upper East Side).
"Oh, and by the way, Brooklyn ROOLZ"
You've found your place in life. And It's Brooklyn.
Not that there's anything wrong with that.
After all, a man has to know his limitations.
Brooklyn responds:
You ad hominem attackin' me? You attackin me? I don't see you attackin any other boro with your limited debatin' skill set, so you must be ad hominemin' me.
alykatz, fugghedaboudit. Be glad such trolls are under da bridge, on the Manhattan side.
Ok, game over. Nothing more tedious than guys with co-ops and mortgages trying to do street.
I also grew up in manhattan but worked in downtown Brooklyn for 7 years. I'm now in Manhattan but still love B'klyn. I hope you're joking.
Burn, baby, burn!
I hope fried's joking about mistaking a cinematic reference for uh.. "street." But at least he has the civility to back off, if only in a backhanded way.
Boo hoo.
Pay a PREMIUM for a co-op over a condo? You've got to be kidding. I rent (in NYC), but if I wanted to buy an apartment it would only be a condo. I'm not sure I would live in a co-op even for free.
Personally I am very anxious to see if and how much the NYC market is impacted by the meltdown. Thus far the fact that the city attracts the most wealthy people in the world like a magnet seems to have forestalled any serious meltdown, the increase in foreign purchases offsetting any slowing in local investment. Overbuilding in Manhattan still appears to be impossible, but the potential danger is likely not in Manhattan but in Queens and Brooklyn where crappy pre-fab styled 'luxury' condos have sprouted up like weeds in some seriously unimpressive areas (only 650k for a view of Home Depot? I'll buy two!) located far from the all-important subway system. It is astounding how many of these apartments are available, but perhaps it is just me, perhaps the desire to live in the mostest awesomest city in the world by the mostest awesomest persons will trump economics. But should things start to fail here, the freakout factor across the nation will go to code level 'reflective orange'.
lilbunny, the meltdown is already on in some parts of brookyn, queens, the bronx and SI, which together far outnumber manhattan in population, and are the great working backbone of the city. The backbone is strained, and it's getting worse.
A rise in crime, poverty and the return of abandoned squat houses is happening on a small scale, but likely to spread. If it bleeds into Manhattan, the wealthy will run like hell.