The reality in New York City and the economy...

Quote from AC3:

In the late 80's and early 90's prior to the tech boom commercial real estate and apartment buildings were going into chapter 11 at a pretty good clip in New York. The workouts went smoothly and there are still experienced players in that market. The problem as I see it is back then there were deep pockets to finance the bankruptcies with Chapter 11 financing .... this time around the downturn is not confined to just the US so the dollars to finance this will be difficult to come by and hence the cycle may last longer.
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good deals always attracts money.
 
Quote from robparis:

If the buildings are as unsustainable as you say, and the owners won't carry them as a loss, the owners will either try to unload them or go bankrupt.
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What do you think has been going on? There are buildings downtown going for pennies on the dollar and they are still not moving. There are plenty of hotshot developers & RE "playaz" who all of the sudden were deep in the hole as the banks stopped providing cheap credit.

I don't know what half these guys are counting or hoping for, but it's quite similar to a bad trader/investor unable to face reality & take the loss.

Quote from robparis:

But soon enough the market will stabilize and land values in the city will start increasing again.
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Well if you're really so sure, put your money on it. But betting on hope rarely pays out well.
There are some astute investors buying right now, but their valuations assume no appreciation for years. It's all based on current income with conservative estimates.
 
Don't forget the RTC portion of the cycle. In the last depression, people buying RTC assets on the cheap had clear competitive advantage and could offer space at like 50% of in-place lease rates. they could steal good tenants & offer lots of concessions, including build-to-suit suites. One result was that marginal properties and owners were tipped over as the price/lease structure ratcheted lower with each new RTC deal. Better to be a little late than way too early. Interest rates weren't at these low levels last time either.
 
The data shows a long way to drop if NYC reaches the trough of the 2003 recession....

Log Chart

24ne0dy.jpg
 
Gees, the chart looks messed up.

You mean the highest average median sales price was in '02, just months after 911? I don't think the national median sales prices would follow that same pattern. (I checked a few, they don't)

That's odd.
 
Quote from nutmeg:

Gees, the chart looks messed up.

You mean the highest average median sales price was in '02, just months after 911? I don't think the national median sales prices would follow that same pattern. (I checked a few, they don't)

That's odd.
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First of all, NYC is a way different animal then anywhere else in the country. Secondly, if you look at those charts, the number of homes sold was down considerably so there was less "sample data". People with money used that opportunity to buy more expensive homes, but as you can see the total number sold was way down.
 
If you look at trulia and check the median prices of the 5 boroughs in the same time frame, the trend is up and not peaked in '02 as the chart suggests.

The chart is misleading, imo.
 
Quote from nutmeg:

If you look at trulia and check the median prices of the 5 boroughs in the same time frame, the trend is up and not peaked in '02 as the chart suggests.

The chart is misleading, imo.
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Also, don't confuse the median vs. mean designation.
 
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