SUZANNE! SUZANNE! But you said! SUZANNE! You researched this! Waaaaaaaaa!!!! I want my money back! Including the commission I paid you! SUZANNE!
More good news for bubble sitters and bitter renters - lots of nice "luxury condos" out there for rent (until they get foreclosed on).
These condo 'owners' are going to experience death by a thousand cuts as condos rent for pennies on the dollar of their ownership costs, and they lose more and more money every day, every week, every month until it's all gone.
Buyers Scarce, Many Condos Are for Rent
Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling.
In many cities, banks have significantly scaled back loans to condominium builders. Some have demanded that developers sell half or more of the units in a building before even beginning construction.
In hopes of salvaging something from their costly plans, hundreds of developers like Mr. Franco are looking to the strong market for apartments, planning to rent their units for at least a couple of years while waiting for today’s condo surplus to shrink. Mr. Franco and Mr. Blum hope to break ground on what will be a somewhat less expensive building this spring.
Industry analysts also point out that rents may start sagging if too many condos are converted into apartments too quickly.
Lenders started tightening the purse strings for the condominium market in early 2006 as sales weakened first in cities like Miami and Las Vegas.
“Did the lenders pull back soon enough?” asked Robert Brennan, managing director of real estate finance at Credit Suisse in New York. “I don’t think we know yet.”
Real estate experts say condos are more susceptible to booms and busts than single-family homes are because they attract more investors who do not intend to live in them and are easier to build than a new subdivision in many cities.
January 16, 2007
FLASH: New York Times - "the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed"
Subscribe to:
Post Comments (Atom)
33 comments:
Just to clarify: "Here" is referring to Washington DC. While the article is in the NYTimes, the article showcases the Metro DC Condo bust and not NYC. I am in DC and I see the decline every day. I cannot comment on the nature of the condo market in NYC, but a friend of mine trying to sell a Co-op apartment is struggling to sell it at a FMV price. Of course FMV is fake in a declining market, I learned this first hand when I sold my luxury ghetto riverfront town home in wilmington Delawhere. I advised him to slash & burn if he really wants to sell. If he's not then he can just keep it on the auction block and ride it out as long as he can accept the wait.
"They have a choice of how they want to lose it,” Mr. Murphy said of investors and condo developers. “Drip by drip or in one slap.”
Great quote...I wish them "drip by drip" , so their pain and torture is exaggerated for month after month.
Its a lesson necessary to expunge the greed and arrogance of the realthy whores.
Time to start attending the Sheriff's sales on a courthouse steps near you. Can't hide the truth there...
Rents are still extremely high in NYC. I live in a rental building with 1,000 apartments, and there is a condo building just across the street that charges about 25-30% more than my building. But the condo building is half empty. I'm hoping that the condo rents in the city begin to drop, otherwise I may have to move out.
"Slash and burn"?
I like that. Really tells it like it is. BUT WILL HE HEAR YOU?
Vancouver, BC went though this with condos in the 90s too. Way too many built, tons of people lost money. Fools like you were predicting a housing collapse and doom and gloom was in the air.
Fast forward to today:
Vancouver's median price is $750K.
West Vancouver's median price is $1.5M.
So you all go ahead and believe you'll buy that nice 4bd/3bth colonial in Boston for $200K next year if you want. History dictates you won't.
Damn it I have work to do, but Anon 5:20:45 PM forces me to comment:
"...tons of people lost money. Fools like you were predicting a housing collapse..."
Impressive, 3 sentences into your speech and already a contradiction. Did they loose money from a housing boom??? Biting my tounge, it's back to work.
After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, Jeff Blum, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings.
YA, sure. It'll be Section 8 or HUD or CHA soon enough.....
In many cities, banks have significantly scaled back loans to condominium builders. Some have demanded that developers sell half or more of the units in a building before even beginning construction.
Such kaka. They could sell if they want to. They just want the 50% profits from years back.
NYC, but a friend of mine trying to sell a Co-op apartment is struggling to sell it at a FMV price. Of course FMV is fake in a declining market, I learned this first hand when I sold my luxury ghetto riverfront town home in wilmington Delawhere. I advised him to slash & burn if he really wants to sell.
About Co-ops:
I have a friend in Chicago that has a Co-op. I believe it is in his best interest in selling now. Are there restriction on selling Co-ops?
Co-ops are communist living that you pay top dollar for. that is what i don't get... in the Soviet Union, you could get the same lifestyle for free that Americans in 2006 pay $900/sqft.
can some one explain this idiotic madness??
Hey Anon- About the sheriff's sale. Great comment just wait until 2008, then the sales will get real interesting.
Oh, sweet vindication.
Thanks for making this renter's day in DC.
Damn it I have work to do, but Anon 5:20:45 PM forces me to comment:
"...tons of people lost money. Fools like you were predicting a housing collapse..."
Impressive, 3 sentences into your speech and already a contradiction. Did they loose money from a housing boom??? Biting my tounge, it's back to work.
1. Nobody looses money. Some people lose money.
2. Uhm yeah it went like this Einstein. Boom. Bust. Even bigger boom = median price in Vancouver of $750,000.
Get it?
"Boom. Bust. Even bigger boom..."
Um yeah, I think Noggin taught me what comes next in that series. Got it.
And yes if you check macro-economic theory 101, "money" is lost.
Anonymous said...
.....Boom. Bust. Even bigger boom = median price in Vancouver of $750,000.
So the next logical step in your scenario is: even bigger bust?
Or since any market comes up from its lowest point, is it considered a perminant boom forever in Vancouver, with some irrating dips along the way?
I find it fascinating when illiterate people who can't distinguish between the words "lose" and "loose" give me advice on financial matters.
Anonymous said...
2. Uhm yeah it went like this Einstein. Boom. Bust. Even bigger boom = median price in Vancouver of $750,000.
Get it?
"In Vancouver the average house price is almost five hundred and seventy five thousand ($575K) and the affordability index is seventy-five. So compared with the rest of the country our house prices are way out of whack."
"The less affordable houses are -- the harder they are to sell. That puts more pressure on housing prices to fall. RBC predicts the Vancouver housing market is near a turning point -- where prices will begin to fall. The signs are all there."Full Article
Since I am a fellow Canadian I would like to help you out. Obviously you aren't doing your research and are ignorant to what is going on.
Do some research before you start throwing STATS around.
P.S. You may be interested in knowing Calgary has a 30% Vacancy on SFH Listings and a 40% Vacancy on Condo Listings. Just a FYI for you.
Your BC Assessment was done on July's 2006 Market value, this year will look a lot different with a 43% increase in Listings.
Get it?
Hey Anon- About the sheriff's sale. Great comment just wait until 2008, then the sales will get real interesting.
Tuesday, January 16, 2007 6:43:45 PM
=================================
Thank you. I would've said auctions held by professional auction businesses. But that time might have come and gone in an instant, for the professionals take their hefty percentage of the sale price. A Sheriff's sale takes much less, and might even be free depending on where you live and what their conditions are.
Yeah the whole loose, lose thing drives me nuts.
Are the "loose" people from Canada or Europe? Even an attorney in my firm used "loose" instead of lose- WTF?!
I can't wait for Spring. It is going to get ugly here. Right now is the silence before the storm.
boom
bust
bigger boom
bigger bust
i will wait after the bigger bust ends. the stupid ones will buy during the booms
This is a permanent housing boom like the permanent NASDAQ boom of the late 1990's. Buying now would be like buying the QQQQ's in August 2000. The NASDAQ has reached a permanently high plateau of 5000 in February 2000. It's a new paradigm where prices and statistics and other numbers are meaningless. WOOHOO
Spin, Spin, Spin away renters.
1. I am not a "fellow Canadian" there Mr. Canuck, please don't insult me like that. I lived in Canada for a few years, see the difference?
2. The point you so obviously are missing is that a glut of condos in Miami does not mean a general housing crash as evidenced by Vancouver where after a similar story as Miami median prices for homes exploded.
3. You go ahead and keep renting if it makes you feel better. You go ahead and thorw out affordability indexes, it's the same old bullshit I heard in Toronto when I lived there 10 years ago and guess what Einstein, homes today in Toronto are double the price they were in the late 90s. There is always a group of people - socialists generally - who talk about affordability indexes. That is code word for we don't have enough government subsidized housing for the lazy. A home could cost $30K and theseimbeciles would be complaining that it's too expensive.
Housing is obviously affordable if people are buying the homes for the median of $575K. This median isn't just set arbitrarily you know. It is set by buyers and sellers getting together and establishing the value of the homes. Since you are a renter you don't understand this very basic concept, but that's OK, someone has to rent my house and pay off the mortgage, for me, night as well be you.
@Anon 8:56:51 PM:
Yep I can't spell. Got me there. Perhaps even miss a few typos along the way if I'm rushed.
Since you injected Einstein's name awhile back, can you name any of his formulas besides E=MC2? Could you derive E=MC2? Can you name any living physicists? If I bring up CARS right now, would you think I'm referring to a movie?
I love the spelling cop out many contrarians around here seem to cradle. Granted we *should* get it right, but wow, talk about a hollow rebuttal. If that's your highest critique for me, so be it, I'm satisfied.
Anonymous said...
Spin, Spin, Spin away renters.
From the Rocky and Bullwinkle Show I'd like to say "Thank you Mr. Know-it-all".
blah, blah, blah
This isn't a pure housing bubble - it is a credit bubble that is chasing real estate and make no mistake about it, will end as all credit bubbles heretofore have ended.
lose vs loose is not a typo it is a lack of grammar
"Housing is obviously affordable if people are buying the homes for the median of $575K. This median isn't just set arbitrarily you know. It is set by buyers and sellers getting together and establishing the value of the homes."
1. Buying via what type of loans?
2. What is the median income?
3. It turns out the values are also set by kickbacks to appraisers, puffed up sales prices, fraudulent comps, and other scams.
Maybe you can easily swing a $500k and up mortgage, or think that's a good price. Excuse the rest of us for being closer to the average.
Look, honey - we have money left over for this nice meal of...celery!
"Housing is obviously affordable if people are buying the homes for the median of $575K."
Affordability and easy access to credit due to loose lending standards are two different things.
"This median isn't just set arbitrarily you know. It is set by buyers and sellers getting together and establishing the value of the homes. Since you are a renter you don't understand this very basic concept"
Spare the condescending remarks for your own children you schmuck! Most of the renters in this forum have a sophisticated level of understanding economics and their own personal finanances. We understand that it is much more financially prudent to rent and invest the money we save than it is to live paycheck to paycheck struggling to pay the mortgage on an overpriced house.
"but that's OK, someone has to rent my house and pay off the mortgage, for me, night as well be you. "
Except that in most inflated housing markets the rent you can get in the current market won't even cover the mortgage, let alone the other expenses associated with owning a home. This is due to a glut of rental properties out there. Apparently you don't understand this basic concept.
Keep trying you realtor troll!
Anonymous said...
Spin, Spin, Spin away renters.
Actually I am a Home Owner, who just Sold his house a month ago.
Soon to be Renter becaue the "tells" are all there that we are in a Housing Correction in Vancouver.
I don't disagree with you that housing is up since the '90's. But History shows us that Housing goes up and down, sometimes drastically, while appreciating.
You can sit there and type your rants all you want. You are just saying the obvious that we all know.
Some of us want to take advantage of this down turn and buy back in when it makes more sense. I guess you won't be.
That's your choice, unless you have a house that isn't selling.
Vnacouver's Family Median Income is $54,000/Year. Not too many can afford $575K for a house.
This is probably why we have a 43% increase YOY in residential inventory.
Are those insane interest only loans and other exotic loans available in BC? Much of the American Bubble has been built on such loans.
Post a Comment