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Location, Location, Location Has Been Replaced With Price, Price, Price

A report from Cory Doctorow on New York. “New York real estate is valuable because of the people who want to live there because of the vibrancy of the city — but as the city is choked off from real activity, the value of the real-estate begins to fall. And once the fall starts, it accelerates: as with all bubbles, a crisis of faith in the market precipitates a panicked sell-off, which deepens the crisis.”

“That dynamic is playing out in New York today: September 2018 sales volume is down 39% from September 2017, with prices dropping by 9%; for every ten $10m+ home on the market, one sells (the ration is actually probably worse — developers are keeping ‘ghost inventory’ off the books to make the figures look better). There is a ton of super-lux property about to enter the market: 9 skyscrapers this year, and 20 more by 2020.”

“Garrett Derderian of Stribling thinks the real number is more like 1:15, since, he claims, developers have been lowballing their supply numbers, mindful that a full picture will send prices falling further. ‘They are holding back homes that they would otherwise be actively marketing, and which would therefore show up in inventory figures,’ he says. Inventory figures are being ‘significantly manipulated’ by the practice of excluding this so-called shadow inventory, according to Jonathan Miller, CEO of Miller Samuel Inc.”

“Prices for super prime homes have been falling steadily. ‘In the market north of $10m, you’re seeing prices off anywhere from 10 to 30 per cent from the peak in 2014,’ says Miller.”

From Mansion Global on New York. “Manhattan’s rental market saw the number of new leases signed plummet almost 30% in September, according to Thursday’s report from New York City brokerage Douglas Elliman. ‘Our September results show that even small increases in asking rents have an impact on demand—and tenants comparison-shop between buildings and neighborhoods like never before,’ said Gary Malin, president of Citi Habitats in the report.”

“‘The rise of car- and bike-sharing services, as well as the expanded ferry system, has caused many New Yorkers to consider more affordable areas that were once off the beaten path. In the rental market, the old adage of ‘location, location, location,’ has been replaced with ‘price, price, price,’ Mr. Malin said.”

This Post Has 14 Comments
  1. ‘you’re seeing prices off anywhere from 10 to 30 per cent from the peak in 2014’

    The bubble popped years ago. The media just doesn’t report it as such.

  2. Stock indexes are down 6-10% from last weeks highs. Normal correction or capitulation ahead of the Greater Depression?

    1. Seems like everything is going down!

      But where are people moving the money to? Gold is up about 2% right now, but that sure doesn’t account for the massive amount of money being pulled out of other places, particularly equities.

      1. the massive amount of money being pulled out…

        Keep in mind that there isn’t actually any money in the market at all. It is in the pockets of other fools. Money has to change hands.

    2. I hate how all the analysts are now talking about rising rates being the trigger. Although they are a serious concern, that was last week’s news when stocks were hitting all time highs. What changed over the last few days?

      Rates are falling now because Trump is blaming the Feds for the dip, and putting pressure of them to stop the increases. That is all contrary to everything he said in the past about his belief that rates need to go up. He is desperately trying to blame others for the stock market tanking before the November elections since he told everyone he is personally responsible for the run up in prices (and the obvious implication being he would have to be responsible for their fall).

    3. First the pundits said, October 2018. Then it was pushed back to 2019, then 2020. I think they decided to go with option #1. Midterms and all that, provides opportunity to eliminate a pesky disruptor Pres and his supporters. And if it doesn’t work for the mid-terms, no biggie. Then there’s a good two years to make the populace miserable until 2020. Very little downside for the facsist/commie corporatists.

      That’s how it looks to me, but we’ll see.

      1. Most of the voting population doesn’t care. They have a job, get a paycheck and things are great! As long as they can grab a drive thru meal and a six pack and watch their favorite reality show or sitcom they are fine. Whether the economy is good or bad, or if a correction is coming doesn’t matter at all. For them, capitulation is a pink slip at work.

  3. Yawn…
    ———————————————————————–
    The Financial Times
    Markets
    Wall Street turns lower as sell-off deepens
    Softer US inflation data fails to provide much respite to the stock market
    updated 46 minutes ago

    1. Happy Halloween!
      —————————————————–
      Turbulence on Wall Street continues
      By Matt Egan, CNN Business
      Updated 11:11 AM ET, Thu October 11, 2018
      The numbers are displayed after the closing bell of the Dow Industrial Average at the New York Stock Exchange on October 10, 2018 in New York. – Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in US interest rates. At the closing bell, the Dow Jones Industrial Average had lost 3.1 percent or 830 points to finish at 25,613.35, in the biggest fall since February. (Photo by Bryan R. Smith / AFP) (Photo credit should read BRYAN R. SMITH/AFP/Getty Images)

      New York (CNN Business)
      The stock market sell-off isn’t letting up.
      The Dow swung wildly between gains and losses on Thursday, struggling to rebound from Wednesday’s scary sell-off that wiped 832 points off the index. In recent trading, the Dow was down 300 points.
      The S&P 500 is similarly in flux, leaving it in jeopardy of closing down for the sixth day in a row. That hasn’t happened since just prior to President Donald Trump’s election two years ago.

      And the Nasdaq remains under pressure, though the selling frenzy has eased a bit. The index on Wednesday suffered its biggest plunge since the Brexit referendum in June 2016.

      Tech stocks have come under fire because they are some of the riskiest and most expensive parts of the market. Investors fear how these momentum names will hold up in a downturn, particularly as interest rates spike. A proxy for the tech sector had its sharpest plunge in seven years on Wednesday.

      “Halloween started early this month for investors,” Ed Yardeni, president of investment advisory firm Yardeni Research, wrote to clients.

      https://www.cnn.com/2018/10/11/investing/dow-stock-market-today/index.html

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