Sunday, November 9, 2008

Weekend Wrap Up And Comment

Leave it to the NY Times, to make a big, gloomy headline and then back it up with a hodgepodge of facts that don't necessarily back up the argument. While the headline "A Downturn Begins" is sensationalist, the numbers The Times uses are downright schizophrenic. The cover graphic is inconsistent- it cites condo prices for areas like the Upper East Side and Upper West Side (which were good) and condo and coop prices for Harlem and Midtown East (which were bad). Why not just compare apples with apples? Also, I don't think I've ever heard Turtle Bay called a "fringe area" before. While the Times tries to explain that numbers for an area like the UWS were skewed by 15 CPW closings, the article in general is off kilter.

Here is what is really going on in the market. Sales have slowed down. It is a buyer's market. Prices in prime areas of Manhattan have not changed appreciably, but there is much more negotiability and bidding wars are gone. In these prime areas, you are looking at 5-10% off the true peak numbers of a year ago. In real "fringe" areas, like Harlem, prices have contracted at a greater pace.

It may be news to the Times, but the real downturn began last November, and it was confirmed and reinforced by the Bear Stearns debacle in mid-March of this year. When you are just taking straight condos sales numbers, you are offering a backward looking, inaccurate assessment of the market. Most new condo closings reflect contracts that were signed 12-18 months ago.

NY Times Belatedly Calls Real Estate Downturn (NY Times)
Ex-Wives Do Their Part To Keep NY Real Estate Afloat (Observer)
National Weekly Luxury Real Estate Wrap (Luxist)
Prices And Inventory Continue Down In Major Metro Areas (PRWeb)
City Pays Through The Nose For Willets Point Property (NY Post)


  1. Fine, you didn't seem to have any problem with the NYT when they blew smoke up everyone's asses with statistics based on 15 CPW and Plaza closings. I also don't remember you ever saying that NYC real estate was in a downturn earlier this year, let alone last November.

    You denied the downturn the entire time. Then, when the NYT writes its first article about it, you say "it started a long time ago!!".


  2. September 13, 2007
    Front page of the NY Sun:
    "Owners are getting more anxious," the president of the brokerage firm A Fine Company Inc., Andrew Fine, said. "Mortgages are a little bit more difficult to come by; it's not clear how strong Wall Street bonuses will be."
    Here is the full article:
    I'm not saying I called the turn, but I had no issue revealing before a large audience that the signs were gathering.
    Did I think we could thread the needle and somehow make it through unscathed? Yes, I'll admit that I believed that was a possibility.