New York Real Estate Market Finally Crashing
Post: Toll Brothers, the largest US luxury homebuilder, said fourth-quarter revenue plunged 41 percent as the housing and credit crisis pummeled its business.
The builder is also seeing housing demand in New York City, which had been a "beacon," slumping in the past six weeks, CEO Robert Toll said.
"It has now joined the ranks of the rest of the country," Toll said.
The "rest of the country" is now down 21% from the peak, with Vegas leading the way (down 39%). The country is on track to bottom down about 40%. New York was a bit more bubbly than average, but less so than Vegas. So it will be interesting to see how far New York falls.
See Also: Robert Shiller: New York Real Estate Market to Crash, Too
In general real estate in NYC always falls less than the rest of the country. On top of that, Real Estate in NYC is the last one to fall. There won't be no 40% drop. If there is a 40% drop in NYC you can be sure to see 75% drop everywhere else.
Now open go to Amazon, buy few books and figure out why I wrote the above statement. I'm not helping you any further. Stop listening to those economic exports, you are going to go broke.
But the economic reality is that NYC is a levered play on US GDP. It is not a play on jet-lagged Europeans flying eight hours to buy condos with newly depreciated euros, it is not a play on "everybody wants to live here," it is a play on the second derivative of changes in US GDP.
1) the average buyer of a $1.5MM co-op in NYC didn't have a 100% interest only NINJA loan that their getting "surprised" on now like the rest of ignorant america. The co-op system is somewhat self regulating in that sense.
2) the chooches who levered themselves to the max and would have to sell at their first missed bonus were the mortgage brokers who lived in Jersey and Long Island. (sorry, but it's true)
3) there are plenty of wall street guys levered up, but i don't think they puke their apartment after one year of missed bonuses. I'd guess, that most owners, even if bonuses are down 75% or more, would still be able to hang on another year
4) thus, it will take a full EXTRA year or two of a diasterous economy (which we may very well get) before we see the decline in NYC that we saw elsewhere
5) they aren't building anymore townhouses in the Village - so areas like that don't lose value. they DID, however, throw up a 35 story high rise on every corner of sixth avenue from 18th st to 26th street - these can certainly take a dump.
-KD
Rental
Condo
Co-Op
Townhouses
Will the market be down, sure, but more so in the first two than the second two, and even then not by much. Anyone with a Co-op or townhouse is secure, job or not, market at 9000 or 6000. It's that hard to get into a Co-op and to even think there is such a thing as an affordable townhouse in this city is maddening.
As far as condos, appox 1 in 3 is owned by a foreigner, due to the ease of buying one.
What you're seeing in the condo/ rental market is condos that were built to be sold are now renting units that weren't sold, creating more rental units. Rental buildings in good areas will continue to hold value as the people who live in them likely have no alternative.
Plus, you have MANY building owners in the city who own their buildings for literally nothing, so they can afford to cut their prices on rentals and still make a kiling. You are beginning to see this in both residential and commercial. They can afford to bring the market down x% because they will still do well, and thus put the squeeze on the levered spec condos that were built along the west side and in less desirable areas.
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And just wait until RE taxes jump by 500%...all these deficits the state and city are talking about...where do you think they're going to make up the difference? Does anyone really believe that that will help RE prices remain high?
Or how about all the city services that are going to be cut? Wait until the crime rate spikes...it's already starting to happen.
I'm not saying armegeddon is coming, but it's going to get very ugly before it gets better.
1) Do not "hand over" your inventory to ad networks, give them your unsold inventory. Keep your sales team in place. CNN uses Advertising.com to sell their unsold inventory for example.
2) There are enough ad networks out there fighting to represent premium sites with unsold inventory - Gawker has good content. CPM rates might lower in the long run,Online shopping but getting paid for something is better than nothing - it's as simple as that.
3) As for video, who says Gawker needs to create their own? YouTube certainly doesn't. They can grab videos out there and run ads Online collector against them. Maybe have user video reviews or something on Gizmodo for example...just an idea.
4)TV never gave into the third party route?
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