Which market will crash first? housing market or the comic market?

[october]

As an aside, as nice as Roberts' apartment is, it doesn't have a washer/dryer in the unit (many co-ops don't have and don't allow them). Only in NYC can you spend almost $5 million on a place to live without a washer/dryer.

 

It's sentences like this that make me so glad I live in the south, despite the brutal summer we're having this year.

 

I could build a life-size replica of Taj Mahal here for 5 million bucks.

 

I was thinking the same. I am in Nashville, which is experiencing it's own real estate boom and identity crisis, as Music Row and Midtown slowly succumb to high rise condos.....but it's nothing compared to what everyone else is describing.

 

$11,000 a square foot? That boggles the mind. My current house would convert to a Manhattan broom closet.

[Peter G]

Half my practice is dealing with condos and coops here in NYC. Talk about self-absorbed people!!

 

Meanwhile, let's not forget the comics market. Here is an article from today's USA Today on comic investing starring Vincent from Metro.

 

http://www.usatoday.com/story/money/markets/2015/08/04/comic-book-investing-story/30573299/

 

 

Thanks for posting

[delekkerste]

$11,000 a square foot? That boggles the mind. My current house would convert to a Manhattan broom closet.

 

Whoops, I see that Russian billionaire Dmitriy Rybolovlev paid $13,000/square foot in 2012 when he bought a condo at 15 CPW for his daughter. Bozhe-moi!!

 

Obviously, that's an extreme outlier, but there have been other sales in the $9-11K/square foot range, and the average for new construction these days is about $2K/square foot, with more and more new projects coming in well above that (like the $3-4K/square foot being asked by The Greenwich Lane, the condos/townhouses on the old St. Vincent's Hospital site, that I linked to above).

[CBT]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, (and a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

[VintageComics]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, and (a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

 

Even if they continue to inflate the GDP in size, as someone else mentioned?

[The Less Blob]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, (and a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

 

the prime stuff is often being bought with cash. no mortgages. true, maybe these rich folks have all that cash handy because of the ZIRP (or 15% tax rates on capital gains or getting their money out of Russia or whatever), but it is peons like me who can no longer touch that RE with a 400 foot pole who have to resort to mortgages and must move out to the boonies and hang out with the Welcome Back Kotter crew (I actually don't live over there, but I am not that far).

[passion4comics]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, (and a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

 

the prime stuff is often being bought with cash. no mortgages. true, maybe these rich folks have all that cash handy because of the ZIRP (or 15% tax rates on capital gains or getting their money out of Russia or whatever), but it is peons like me who can no longer touch that RE with a 400 foot pole who have to resort to mortgages and must move out to the boonies and hang out with the Welcome Back Kotter crew (I actually don't live over there, but I am not that far).

 

I'm in PA. The pre-boom houses that were $400k are now $150k. They nose dived with all the foreclosures on the big 5000sf homes. The taxes are about $10k for the house I'm in and it's not that big up from $2600 12 years ago. I'm probably going to have to move out of my area because of taxes! If someone is going to print money please send me a box.

[lou_fine]

Further to my point above, Julia Roberts recently listed her Gold Coast Greenwich Village penthouse apartment for $4.5 million, which is not that much more than the $3.895 million she paid in 2010. Why so little (price appreciation)? Because it's a co-op. If it was a condo, you'd have to add a million or two to the price, easily. I mean, $4.5 million in the current market is not much above starter home level when the average price of new construction condos is coming in around $3.5 million in the better areas these days.

 

As an aside, as nice as Roberts' apartment is, it doesn't have a washer/dryer in the unit (many co-ops don't have and don't allow them). Only in NYC can you spend almost $5 million on a place to live without a washer/dryer.

 

Gene;

 

Since I am not used to the Manhattan scene, what are the basic differences that have made the condo market go up while the co-op market not so much? Co-op housing normally refers to government subsidized housing for the lower income groups, so obviously it is something else when it comes to Manhattan as I do not see Julia Roberts needing a government handout for her housing needs.

 

Where I live, the condo market has only moved up slightly due to the almost endess supply of new condos being built and coming onto the market. Similar situation in Toronto from what I am hearing. Single family detached housing, in the meantime, have gone through the roof. Main reason for this is that it comes with land which is in limited supply along with potential revenue from secondary suites. Condos comes with no land and yet at the same time, comes with a high monthly maintenance payment.

 

Are there any single family detached housing in the NYC ares surrounding Manhattan, and if so, what have their pricing valuations been like?

[Peter G]

Further to my point above, Julia Roberts recently listed her Gold Coast Greenwich Village penthouse apartment for $4.5 million, which is not that much more than the $3.895 million she paid in 2010. Why so little (price appreciation)? Because it's a co-op. If it was a condo, you'd have to add a million or two to the price, easily. I mean, $4.5 million in the current market is not much above starter home level when the average price of new construction condos is coming in around $3.5 million in the better areas these days.

 

As an aside, as nice as Roberts' apartment is, it doesn't have a washer/dryer in the unit (many co-ops don't have and don't allow them). Only in NYC can you spend almost $5 million on a place to live without a washer/dryer.

 

Gene;

 

Since I am not used to the Manhattan scene, what are the basic differences that have made the condo market go up while the co-op market not so much? Co-op housing normally refers to government subsidized housing for the lower income groups, so obviously it is something else when it comes to Manhattan as I do not see Julia Roberts needing a government handout for her housing needs.

 

Where I live, the condo market has only moved up slightly due to the almost endess supply of new condos being built and coming onto the market. Similar situation in Toronto from what I am hearing. Single family detached housing, in the meantime, have gone through the roof. Main reason for this is that it comes with land which is in limited supply along with potential revenue from secondary suites. Condos comes with no land and yet at the same time, comes with a high monthly maintenance payment.

 

Are there any single family detached housing in the NYC ares surrounding Manhattan, and if so, what have their pricing valuations been like?

 

NYC co-op is ownership of shares of stock of the cooperative. It is much harder to get mortgage financing on shares of stock.

 

NYC condo is ownership of space from wall to wall.Association is usually responsible for exterior of building and common areas. Mortgage financing on a condo is much much easier.

 

I have closed hundreds of condos and co-ops in NYC and condo is the way to go because of the liquidity of the investment.

[Peter G]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, (and a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

 

All debt backed assets will suffer when leverage is removed from the system. It is inevitable.

[delekkerste]

Since I am not used to the Manhattan scene, what are the basic differences that have made the condo market go up while the co-op market not so much? Co-op housing normally refers to government subsidized housing for the lower income groups, so obviously it is something else when it comes to Manhattan as I do not see Julia Roberts needing a government handout for her housing needs.

 

Where I live, the condo market has only moved up slightly due to the almost endess supply of new condos being built and coming onto the market. Similar situation in Toronto from what I am hearing. Single family detached housing, in the meantime, have gone through the roof. Main reason for this is that it comes with land which is in limited supply along with potential revenue from secondary suites. Condos comes with no land and yet at the same time, comes with a high monthly maintenance payment.

 

Are there any single family detached housing in the NYC ares surrounding Manhattan, and if so, what have their pricing valuations been like?

 

In a co-op, you technically own shares in the building as opposed to the apartment itself. The more important distinction is that co-op buildings tend to be older, tend to be stricter in terms of financing the purchase (the co-op across the street from me requires you to put 50% down, for example), stricter in terms of your ability to sublet it (some even require it to be your primary residence), you get interviewed by the co-op board (notable names like Richard Nixon and Madonna were famously turned away from prestigious co-ops who didn't want the crowds/hassle these new neighbors would attract), etc. I don't know whether the government ever had anything to do with co-ops, but they certainly are not involved anymore - co-op housing in NYC has nothing to do with government subsidized housing.

 

No one is building co-ops anymore - nearly 100% of the new construction is geared towards luxury condo buyers. Investors can leverage them, don't have to live in them, can rent them if desired, etc., all of which have made that market white hot, especially among foreigners who have led the market surge in recent years (most of whom are excluded from the co-op market since these are rarely primary residences and have such onerous rental restrictions). Co-ops have definitely lagged, though high-end co-ops with full-time doormen and luxury amenities have definitely lagged less than your run-of-the-mill co-ops like the one I live in (though, at least I live in a great location).

 

BTW, I was watching the latest episode of "Million Dollar Listing: San Francisco" last night and I'm convinced that SF prices are literally only half of NYC prices when adjusted on a per-square foot basis. I just looked at the stats on Trulia which suggest that SF prices are about 2/3rds of NYC on a per-square foot basis, but if you're comparing condo to condo prices, the gap is definitely wider. Pretty much every property they've shown on the series so far has looked crazy cheap to my jaded NYC eyes.

[VintageComics]

I just looked at the stats on Trulia which suggest that SF prices are about 2/3rds of NYC on a per-square foot basis, but if you're comparing condo to condo prices, the gap is definitely wider. Pretty much every property they've shown on the series so far has looked crazy cheap to my jaded NYC eyes.

 

Weren't they recently (meaning just a few short years ago) neck in neck?

[delekkerste]

I just looked at the stats on Trulia which suggest that SF prices are about 2/3rds of NYC on a per-square foot basis, but if you're comparing condo to condo prices, the gap is definitely wider. Pretty much every property they've shown on the series so far has looked crazy cheap to my jaded NYC eyes.

 

Weren't they recently (meaning just a few short years ago) neck in neck?

 

No, there's always been a meaningful gap. I know some people thought (some even still think) that prices were much closer because the gap in terms of median sales price is smaller than the gap in terms of price per square foot. But that's just because SF homes are larger on average than what we have in NYC. Adjusted for size, the gap is quite sizable and even more so when you adjust for apartment type (condo vs. condo).

[The Less Blob]

both are held up by the Zero Interest Rate Policy used to levitate assets/markets after the second great depression started in 2008. As was always the inevitable outcome,the policy will fail(more debt cant fix a debt problem), and the second GD will continue right where it left off, with a few dozen trillion more in notional debt created in the interim, (and a few 100 trillion more in shadow banking/derivatives).

 

They will crash together when the money printing is no longer enough to keep the lie/music going....

 

the prime stuff is often being bought with cash. no mortgages. true, maybe these rich folks have all that cash handy because of the ZIRP (or 15% tax rates on capital gains or getting their money out of Russia or whatever), but it is peons like me who can no longer touch that RE with a 400 foot pole who have to resort to mortgages and must move out to the boonies and hang out with the Welcome Back Kotter crew (I actually don't live over there, but I am not that far).

 

I'm in PA. The pre-boom houses that were $400k are now $150k. They nose dived with all the foreclosures on the big 5000sf homes. The taxes are about $10k for the house I'm in and it's not that big up from $2600 12 years ago. I'm probably going to have to move out of my area because of taxes! If someone is going to print money please send me a box.

 

yes, that area (are you in the pocanos or some semi-commutable to NYC area?) has been destroyed price wise. people bought out there to get out of NYC but the commute is so horrific many decided it was a huge mistake (my former boss did that and once the kid went to college and they had no use for the decent schools out there they moved back to the city, but can't sell the house, so they rent it out) and i guess there aren't enough jobs in philadelphia for them to work there instead.

[The Less Blob]

Are there any single family detached housing in the NYC ares surrounding Manhattan, and if so, what have their pricing valuations been like?

-------------

 

I live in a single family detached home in Brooklyn. I have about a 35 minute train ride to Wall Street/the courts in Manhattan. I have a yard and a driveway (the lot is only 40 X 100, but some in my area are 60X100 or more). Prices are up about 50% since when I bought at the end of 2006. Prices never really dropped more than 5% below what I paid even during the recession (although that was probably 15% below the peak in 2007/2008).

 

But it is not every area is the same. I think similar homes in some more middle class parts of outer Queens and outer Staten Island have not bounced back as much from the drops from the 2007/2008 peaks. Particularly in Queens I think there was a lot of speculation in some middle class/upper middle class black areas and prices got jacked up beyond what made sense for the incomes in the area.

[Conan_Aficionado]

This response isn't directed at anyone. I don't know if mortgage rates are pegged to the fed funds rate but if we look at historical data on both mortgage 30 rates and the fed funds rate you will notice that even in 2006-2007 when the fed funds rate was above 5% the 30 year mortgage rates were only about 100 to 150 basis points higher. Now looking at the fed funds rate which stands at .25 we see that 30 year mortgage rates stand about 375 to 400 basis points above that.

 

I guess what I'm trying to say that I don't believe that mortgage rates will raise so fast or high as to squash the housing market. I suppose, that's if they are tied to the housing market, but alas, I'm too lazy to google that.

[The Less Blob]

NYC co-op is ownership of shares of stock of the cooperative. It is much harder to get mortgage financing on shares of stock.

-------------------

Understanding we have strayed far from the comics vs. RE topic, but this shows how New Yorkers just love talking real estate...

 

 

Not really for Manhattan co-ops. I never had a problem getting a mortgage, financing, etc. They are generally known quantities.

 

Some people who are looking for a place to live rather than just leveraging an investment prefer not having endless sublets next door and the fact that many co-ops require 25-50% down and a careful review of your finances means that people buying are less likely to default (some condos also require large down payments though). Also, property taxes on co-ops in NYC are lower than for condos.

 

But yes, because of the liquidity and such condos tend to have a price premium over co-ops.

 

With that said, most of the apartment buildings on Central Park West, Park Avenue, 5th Avenue, etc. are older, established, co-ops worth many millions and in them live some very very rich people, and maybe even some wealthy comic collectors!

[The Less Blob]

Looks like 30 year mortgage rates are at 4.00-4.25% right now. Not exactly "zero" for us suckers who have to get a retail mortgage, but very low for the last 60 years or so.

 

The ZIRP is more about banks and big wall street players who are being allowed to borrow from the government at almost zero percent in order to encourage them to lend money and keep the economy going. Interest rates are low, but I don't know if they are handing out loans willy nilly anymore. Wall Street it seems may be using the money to finance acquisitions, investments and it is not getting directly out to the consumer, but maybe I am just a conspiracy theorist.

[The Less Blob]

I just looked at the stats on Trulia which suggest that SF prices are about 2/3rds of NYC on a per-square foot basis, but if you're comparing condo to condo prices, the gap is definitely wider. Pretty much every property they've shown on the series so far has looked crazy cheap to my jaded NYC eyes.

 

Weren't they recently (meaning just a few short years ago) neck in neck?

 

SF is 1/10th the size of NYC population wise, so it is hard to compare.

 

If you compare SF to NYC overall (which includes non-Manhattan, where 80% of the people (peons like me nowadays) actually live) I suspect that SF overall is more expensive than NYC overall, but cheaper than Manhattan per square foot.

 

Frankly, it is just weird to me that SF has 1/3 the population of Brooklyn. I drive around SF and it "feels" like a pretty decent size place and it takes me as long to get from one end to the other as it does in Brooklyn and Brooklyn also has a lot of low density housing like I live in, but the numbers don't lie I suppose.

[delekkerste]

Two points:

 

Mortgage rates are keyed off the 10-year Treasury rate, not the Federal Funds rate.

 

One other reason why condos are preferred over co-ops is because co-op boards do an invasive full body cavity search of your financial qualifications, something that many wealthy people are not keen on. With condos, many wealthy foreigners just set up an LLC and buy them anonymously. NYC real estate has become the new Swiss bank account or safety deposit box equivalent for the global elite. :doh: