Comments on: Quelle Surprise! Manhattan Real Estate Prices Drop Sharply http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html Sun, 22 Nov 2009 07:56:24 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19386 Anonymous Sun, 05 Oct 2008 03:17:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19386 <i>she with her late husband purchased the house in 1970. She must own the house by now. Again, why would she take out a 30-year, 6.375 percent mortgage?</i><br/><br/>Cash-out refinance of the existing home equity. she with her late husband purchased the house in 1970. She must own the house by now. Again, why would she take out a 30-year, 6.375 percent mortgage?

Cash-out refinance of the existing home equity.

]]> By: Yves Smith http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19361 Yves Smith Sun, 05 Oct 2008 00:27:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19361 In the fiscal crisis (late 1970s, when the city verged on bankruptcy), and to a much lesser degree in the 1991-1992 downturn, you could buy apartments with high maintenance (usually because the co-op corporation had a large mortgage) simply for assuming the maintenance. Zero payment at closing. <br/><br/>But you also had to have good enough financials to be approved as a buyer by the co-op. In the fiscal crisis (late 1970s, when the city verged on bankruptcy), and to a much lesser degree in the 1991-1992 downturn, you could buy apartments with high maintenance (usually because the co-op corporation had a large mortgage) simply for assuming the maintenance. Zero payment at closing.

But you also had to have good enough financials to be approved as a buyer by the co-op.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19358 Anonymous Sun, 05 Oct 2008 00:21:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19358 RK,<br/><br/>Prices/sq ft on completed buildings can drop below replacement cost, so I think anonymous 4:19 may indeed be right. Unfortunately, that means repeat of 1930s, but it has happened before. RK,

Prices/sq ft on completed buildings can drop below replacement cost, so I think anonymous 4:19 may indeed be right. Unfortunately, that means repeat of 1930s, but it has happened before.

]]> By: SilverDollar http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19353 SilverDollar Sat, 04 Oct 2008 22:35:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19353 dmd,<br/><br/>Correct you are. San Fran hasn't been hit quite as bad in the credit crunch, because layoffs have not hit us yet. 2009/2010 will be interesting times for local real estate. Look for decent bargains in Spring 2010.<br/><br/>SilverDollar dmd,

Correct you are. San Fran hasn’t been hit quite as bad in the credit crunch, because layoffs have not hit us yet. 2009/2010 will be interesting times for local real estate. Look for decent bargains in Spring 2010.

SilverDollar

]]> By: RK http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19350 RK Sat, 04 Oct 2008 21:13:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19350 Anonymous of 4:19<br/>In 1986 you could buy a building in soho (manhattan) for $30 per square foot. (I did) Today you can't BUILD a building for $300 per square foot, EXCLUDING the<br/>land. So I would rethink my hyperbole. Anonymous of 4:19
In 1986 you could buy a building in soho (manhattan) for $30 per square foot. (I did) Today you can’t BUILD a building for $300 per square foot, EXCLUDING the
land. So I would rethink my hyperbole.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19348 Anonymous Sat, 04 Oct 2008 20:19:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19348 The good news is that it really will be a great buying opportunity when the bottom finally comes. We're talking 1980s prices. The good news is that it really will be a great buying opportunity when the bottom finally comes. We’re talking 1980s prices.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19345 Anonymous Sat, 04 Oct 2008 19:42:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19345 Couple of observations:<br/><br/>1. A friend is developing a building building into luxury condos (full floor apartments >$3mm). He has been advised (4 months ago) that the only bidders will be from Europe, and he was being fully marketed there. (No update post Euro crash/London real estate crash, but I don't think the US luxury buyer market has picked up...)<br/><br/>2. Another developer I know predicts major disaster for the developers now rushing to complete the 80% filled buildings (4 of which are within 2 blocks of my (rented) home in Brooklyn.) These were all built/financed using straight line price projections on $/sf historical growth. No one was expecting a reversal. But these are construction loans (5 year terms). If the condo buyer market implodes, it will be next to impossible to convert these to rentals - lenders won't want the exposure. Expect deep price cuts.<br/><br/>R in NY Couple of observations:

1. A friend is developing a building building into luxury condos (full floor apartments >$3mm). He has been advised (4 months ago) that the only bidders will be from Europe, and he was being fully marketed there. (No update post Euro crash/London real estate crash, but I don't think the US luxury buyer market has picked up…)

2. Another developer I know predicts major disaster for the developers now rushing to complete the 80% filled buildings (4 of which are within 2 blocks of my (rented) home in Brooklyn.) These were all built/financed using straight line price projections on $/sf historical growth. No one was expecting a reversal. But these are construction loans (5 year terms). If the condo buyer market implodes, it will be next to impossible to convert these to rentals – lenders won't want the exposure. Expect deep price cuts.

R in NY

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19342 Anonymous Sat, 04 Oct 2008 18:47:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19342 The price drop in Manhattan will only accelerate as the crime rate inevitably starts to rise. More crime means incrasingly panicky foreign selling. 2009 will be a rough year for Manhattan. The price drop in Manhattan will only accelerate as the crime rate inevitably starts to rise. More crime means incrasingly panicky foreign selling. 2009 will be a rough year for Manhattan.

]]> By: The Charters Of Dreams http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19337 The Charters Of Dreams Sat, 04 Oct 2008 17:04:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19337 I have a question about this sad story of Addie Polk, 90, of Akron, Ohio. Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home:<br/><br/><a HREF="http://www.cnn.com/2008/US/10/03/eviction.suicide.attempt/index.html" REL="nofollow">Fannie Mae forgives loan for woman who shot herself</a>.<br/> <br/>I'm a bit confused about how exactly the current banking crisis lead to her own personal financial crisis. <br/><br/>The article gives some details:<br/><br/>"In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.<br/><br/>Over the next couple of years, Polk missed payments on the 101-year-old home that she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure."<br/><br/>Question 1: She's 90 -- what does it mean she took out a 30-year, 6.375 percent mortgage? Did she borrow $45,620? What was the $11,380 line of credit for?<br/><br/>Question 2: she with her late husband purchased the house in 1970. She must own the house by now. Again, why would she take out a 30-year, 6.375 percent mortgage?<br/><br/>Anyway, it's a very sad story, but I'm wondering exactly what mistakes or mis-calculations Ms. Polk made, if any. Thanks! I have a question about this sad story of Addie Polk, 90, of Akron, Ohio. Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff’s deputies tried to evict her from her foreclosed home:

Fannie Mae forgives loan for woman who shot herself.

I’m a bit confused about how exactly the current banking crisis lead to her own personal financial crisis.

The article gives some details:

“In 2004, Polk took out a 30-year, 6.375 percent mortgage for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls, Ohio. The same day, she also took out an $11,380 line of credit.

Over the next couple of years, Polk missed payments on the 101-year-old home that she and her late husband purchased in 1970. In 2007, Fannie Mae assumed the mortgage and later filed for foreclosure.”

Question 1: She’s 90 — what does it mean she took out a 30-year, 6.375 percent mortgage? Did she borrow $45,620? What was the $11,380 line of credit for?

Question 2: she with her late husband purchased the house in 1970. She must own the house by now. Again, why would she take out a 30-year, 6.375 percent mortgage?

Anyway, it’s a very sad story, but I’m wondering exactly what mistakes or mis-calculations Ms. Polk made, if any. Thanks!

]]> By: JP http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate.html#comment-19333 JP Sat, 04 Oct 2008 16:02:00 +0000 http://www.nakedcapitalism.com/2008/10/quelle-surprise-manhattan-real-estate-prices-drop-sharply/#comment-19333 Anyone have a pointer for price-to-rent ratio history for the city? (And where are we now?) Anyone have a pointer for price-to-rent ratio history for the city? (And where are we now?)

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