Manhattan Apartment Prices Decline QOQ

[jyl]

I thought this was an interesting data point.

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=URI:urn:newsml:reuters.com:20051004:MTFH00 289_2005-10-04_04-02-01_N03588885:1

NEW YORK, Oct 4 (Reuters) - What goes up and up must eventually head back to earth -- at least in Manhattan, where the average price of an apartment fell to $1,149,813 in the third quarter -- down 12.7 percent from the second quarter, according to a quarterly real estate report released on Tuesday.

[snip]

the average price of a Manhattan apartment in the third quarter of 2005 was still 10.1 percent higher than in the same period a year ago, according to the report.

[snip]

For the Manhattan apartment market, the number of sales fell 8.4 percent during the third quarter to 1,997 units -- down from 2,181 in the second quarter -- and off nearly 18 percent from 2,429 in the year-ago third quarter.

Apartments also hung around the market longer -- lasting 133 days, up 30.4 percent from 102 days in the second quarter and up 23.7 percent from 107 days in 2004's third quarter.

Inventory climbed to 5,764 units in the third quarter -- up 16.1 percent from 4,965 in the second quarter and up 12.8 percent from 5,112 in the year-ago third quarter.

[snip]

The weakest sales were in the top of the Manhattan market, according to the Prudential Douglas Elliman report. The average sales price of a unit with four or more bedrooms declined about 36 percent in the third quarter to $6,823,346, down from $10,639,792 in the second quarter.

[arcsine]

$7 million for a four bedroom apartment and the market is down!

My mind is too shallow to comprehend that as an acceptable reality unless you are talking pesos or lira. Unbelievable.

[Mulhollanddose]

Liberal New York...wouldn't ya know it...sorta like Frisco...The rich getting filthy and the poor in the ghetto.

[CamB]

Do you ever stop Mul? Without referring to socialist principles, how on earth would you imagine one changes the rich/poor gap in New York?

[legion]

Originally posted by CamB
how on earth would you imagine one changes the rich/poor gap in New York?

First, we kill all the lawyers...

[tabs]

First property declines in Boston....now NYC.....my GAWD the declines are spreading.....the BUBBLE IS BURSTING....next LA and SF......

Didja ever think that Liberals have a rational for keeping poor people poor...so that they could feel good about themselves, through their own moral superiority...and that they need someone to follow their misbegotten ideas....and who to do it but the ignorant, unwashed poor.....

[Mulhollanddose]

Originally posted by CamB
Do you ever stop Mul? Without referring to socialist principles, how on earth would you imagine one changes the rich/poor gap in New York?

Seems the 40 year "war on poverty" would amount to a little more economic equity in liberally owned political climates like San Francisco and New York City...The opposite seems to be true.

"How would I imagine changing the rich/poor gap"?...Start with changing the political philosophy, as philosophy is what motivates action and action produces results...Socialism (or socialism-lite even) has proven time and again to create social ills, not fix them.

[CamB]

So what differs about the political philosophy in New York that makes it liberal and worsens the gap from rich to poor? How does changing the philosophy work?

I think you're dreaming...

[jyl]

Reducing poverty is completely different from reducing the rich-poor gap.

Globally, the rich have been getting richer for decades now, and the ultra-rich have been getting ultra-richer. That is fine with me.

I believe it is important for our country to reduce poverty. I do not think it is particularly important to reduce the rich-poor gap.

Anyway, I think the more interesting aspect of this data point has to do with the question of whether there is a bubble in real estate prices.

[Hugh R]

Why should be do anything about the Rich-Poor gap? Cam, you say that like its a problem. The United States has thrown $7 Trillion at this problem over the last forty years. I think we have a proven track record that it doesn't work. Because some people choose not to compete in a capitalist society, shouldn't be my problem, it should be their problem (the poor that is). I came from nothing, and I managed to get myself to a point where I'm sort of comfortable, certainly not rich, by Los Angeles standards, but I manage. Its never dawned on me to look to the government for a handout. In a relatively remote country like NZ, its my understanding that you can't gov't services unless you can prove your a citizen. Not so here.

[Dixie]

First, we kill all the lawyers...

Hear, hear!

Lawyers are an important part of society. (You'll appreciate them if you've ever been in a pinch and needed them.) But the issue is we've become consumed by them. Lawsuits and lawyers do not create any goods or consumable service. They simply redistribute wealth. They have become a huge hidden tax limiting our ability to increase the standard of living for all citizens.

[304065]

John, that's an interesting data point, but here's another one: the original market crash was in 1987. The NY real estate market bottomed in 1992. It took five years for the guinea pig to work its way through the python, so to speak.

The City has actually been doing pretty well under our version of conservative leadership. Giuliani and Bloomberg may be significantly to the social left of your typical square-state objectivist wanna-be, but they are significantly to the right of the Democratic candidates here. Contrast the provision of basic services like an effective police presence and regular garbage pickup during the last decade or so with the situation in the 1970's.

Enough of the hollow ideological garbage about the rich-poor gap. New York City continues to embody the essence of the American Way, which is simply this, and I'm going to turn the bold face on: Every single day, immigrants from war-torn, impoverished and famished countries of every type, manner and description land on our city streets, and throw off the habits of their former homes to conform to American Capitalism as it is practiced across the five boroughs. Some make it, some don't, but the fact is that the opportunity is offered to people with NOTHING to take part in the economy and begin to better themselves. Outside at this very moment, people from a hundred different countries and racial backgrounds have put aside millenia of hostility to one another and interact in trade. I submit that that mixing happens NOWHERE else in the world, and it is the strength of New York City, which is the strength of America.

I now return you to your regularly scheduled reading of We the Living.

Oh, and Legion, do you know WHY Dick the Butcher said that line in Henry VI?

[304065]

Oh please Rob.

Lawyers CREATED private property. We CREATED the concept that a universal reliance interest in not taking the property of others was cheaper than the cost of hiring private security guards to prevent your property from being taken by force or violence.

We CREATED the concept of civil liberties. We distilled from human experience, bloody revolutions and the collective philosophical effort of five thousand years a scheme of ordered liberty that allowed capitalism to flourish.

We CREATED the joint-stock company and the concept of limited liability, which is what allowed capitalism to flourish in the 15th century. We CREATED the concept of equity ownership, which has absolutely been the engine of wealth creation, that has marked the rise of the American Economy to the greatest in human financial history.

We CREATED the rules that hold back the fragile borders of civilization against chaos. We wrote the criminal code and put advocates on both sides to protect the rights of the accused. We also wrote the civil code, that allows people who are harmed to seek legal redress for wrongs, rather than resorting to self-help, which reinforces the "civilized" nature of modern society.

So while I don't disagree that there's wealth redistribution going on, I would point out that unlike things like progressive taxation, which penalize high income taxpayers disproportinately over middle-income taxpayers without a trial or the opportunity to protest, wealth redistribution in the context of tort law isn't such a bad thing.

Seriously, now: XYZ Corporation makes a hazardous product which suffers from a design defect which injures somebody, and we don't think it's OK for the victim to recover?

If you want to talk about Tort Reform and "loser pays" no problem, but such a discussion is way above the typical laywer-bashing thread as it's played out with increasing frequency on the Pelican Board.

Just my .02. . .

[CamB]

Sorry guys - didn't mean to imply I had a problem with rich and poor in New York.

The way I look at it, it is expensive to live in New York, so there are high poverty levels. Its expensive because people wanna be there, and cause that is where the jobs are. I'm guessing it would be pretty friggin hard to live off welfare in NY.

This is not the liberals fault, and not something that can be "fixed" (by conservatives or liberals), except by destroying what NY is.

John - what relationship of housing prices to rent and so on is there in NY now? Aren't there funny rent controls which screw that up too?

[jyl]

CamB, I'm no expert on NYC but my assumption is that if you are lower-income, you don't live in the nicer parts of Manhattan - you live in Queens or Brooklyn etc.

JohnC, in SoCal the real estate peak to trough was also about 5 years, 1990 t0 1995 appx. What I don't remember is if most of the decline occurred in the first couple of years with the rest being a long basing.

[Mulhollanddose]

Originally posted by jyl
CamB, I'm no expert on NYC but my assumption is that if you are lower-income, you don't live in the nicer parts of Manhattan - you live in Queens or Brooklyn etc.

Fact...My cousin lives in Spanish Harlem and he pays 1350 for a box...We are talking Spanish Harlem here...Anything affordable is state subsidized and dangerous in that area...Parking a car is at least another 4 bills.

[ubiquity0]

Its expensive no doubt... but $1000+ for a monthly parking space though- come on

[Nathans_Dad]

Never miss a chance to pile onto a lawyer!!

Bottom line is that lawyers are reaping what they have sown for the last 20 years. The culture of "sue everyone" is about to come down onto their heads because the market won't bear it anymore. Drug companies will be charging more for their drugs (as if they don't charge enough already), doctors are already leaving certain states because they can't afford malpractice insurance, etc etc. Yet still we see the ads for the ambulance chasers during the commercial breaks of Jerry Springer. It's sad really. Some day when people wake up and discover that no one will help them or sell them anything because they don't want to be sued over it, MAYBE the lawyers will wake up...

[Mulhollanddose]

No worries...big-gubmint will ride in for the rescue on a horse named Confiscatory Taxation.

[Rondinone]

Originally posted by CamB
So what differs about the political philosophy in New York that makes it liberal and worsens the gap from rich to poor? How does changing the philosophy work?

I think you're dreaming...

Rent controls! Holding down prices stifles supply. Liberal dream gone wrong. Frisco is the same way, but for environmental reasons not fiscal.