UrbanDigs Press: NY Times / NY Mag / IBD

Posted by urbandigs

Sat Apr 18th, 2009 02:04 PM

A: Jeff Bernstein doing his 'reality check' in today's front page story on NY Times. Jeff joined UrbanDigs about 2 years ago and his presence here has proven to be incredibly beneficial for all readers. We will continue to monitor this market and offer commentary on the fast changing macro environment, and how that may impact our local real estate marketplace. While its not the best sales tactic to tell it like it is in a commission driven industry, we are on a mission to make Manhattan real estate more transparent and to offer a venue where reality trumps babble. Lets continue to keep it real!

jeff-in-nytimes.jpgFront Page NY Times Real Estate, "Don't Even Say The Words":

New Yorkers have moved from a love affair with real estate to a “short-term hate” phase, said Jeffrey Bernstein, a former Wall Street analyst and a partner in a real estate investment banking firm, Guild Partners in Armonk, N.Y.

“You’re in a short-term hate market when you have prices coming down 30 to 40 percent, but there’s still some feeling you can make some money out of this,” said Mr. Bernstein, who has blogged about the psychology of asset cycles for UrbanDigs.com, which examines the New York City residential market through a macroeconomics lens. Whether the asset in question is oil, tech stocks or condos, he said, “this is all part of the cycle.”

A hate market, he said, is not a market bottom. That, he explained, will be marked by a sustained period of apathy — and quiet.

“Apathy is when people are so turned off they’re just not interested anymore,” he said. “That means all the speculative juices are wrung out and the only buyers are true buyers who need shelter and might even be grudgingly buying.

“Apathy means there are no expectations and maybe the market gets a little bit better, but really over two to three years there is not much progress. And finally no one is talking about real estate as the great wealth-building vehicle anymore. That is what makes a really good bottom.”
I totally agree with Jeff. What marks bottoms, is when nobody wants to even discuss the asset anymore, the market is sluggish, and frustration is high - sellers just want to get rid of the asset to eliminate the stress of trying to sell it. We are not there yet. Markets usually do not go from peak to trough in a straight line (except it seemed that the cliff dive crude oil did from mid 2008 - early 2009 was a straight shot from 145 to 30 or so). Rather, there are a number of waves or adjustments and then the market takes a breather as the new comfort zone is reached. For Manhattan, I'm positive there are deals happening right now that will define the next wave down when closings are recorded, ushering in a new round of price discovery. The most surprising deals will be found in the high end & mid/high end market. This includes the Classic 6s, 7s, & 8s, and larger trophy properties that must be sold for whatever reason. I think the next round of price discovery will occur in JUN/JULY, right at the time this market normally slows significantly - the seasonal component of Manhattan real estate I discussed in Friday's State-of-the-Market piece: "
...my view is that this countertrend pickup in activity (which is mostly foot traffic and not a surge in contracts signed) will not last for much longer. Once we enter the slower summer months, history will probably repeat itself and this market could get significantly more illiquid; similar to what the 4th quarter of 2008 saw and bad news for anyone that must sell. If this seasonal component proves correct, serious sellers will find it even more difficult than it is now and that may ultimately mean a bid will have to be hit. Therefore, I think the latter half of the 2nd quarter all the way up to the 4th quarter will show continuing sluggish sales volume and perhaps the second wave of adjustments in pricing that is only proven after the fact."
If you have not read Jeff's previous discussions on the Psychology of Asset Cycles & Waiting for the Hatin', the links are provided.

UrbanDigs also got some press recently in the following publications, but I was too busy to add to our PRESS page. Enjoy!

NY Mag: Flipped or Flopped -
Normally, apartments are priced based on “comps”—similar sales nearby, adjusted for layout and condition. But now that we’re a year into the market slowdown, the data pool is big enough that the gurus at Streeteasy.com can go beyond that inexact science. They’ve isolated a list of individual apartments that sold at the peak (mostly in 2006 and 2007) and then again in the past few months. “It’s a true apples-to-apples comparison, assuming a property hasn’t changed considerably,” says appraiser Jonathan Miller. “The only variable is time.” Adds Noah Rosenblatt of Urbandigs.com: “It clears out the noise and gives you a pure look.”
Investors Business Daily: Manhattan Housing Hurts Amid Job Losses -
But buyers are "pricing in further downturn risk," said Noah Rosenblatt, publisher of Manhattan housing blog UrbanDigs.com.

"Generally, nobody likes to buy a depreciating asset," he said. "There are value-hunters out there. But the bids they are putting in are not where the seller at this point is willing to go ."