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Archive for December, 2009

[Three Cents Worth #135] Five Boroughs and a Manhattan Hiccup

December 31, 2009 | 5:08 pm | curbed | Charts |

It’s time to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate.

Admittedly, I forgot to link out to my 3CW post last week, so I am playing catchup, plus Joey gave me the week off.

Three Cents Worth: Five Boroughs and a Manhattan Hiccup

This week I took a look at the quarterly percent change in average sales price adjusted for inflation for each borough, as compared to the same period in the prior year. I am starting to track and build the historical data for the outer boroughs, but no plans for a formal report at the moment. I don’t have the historical median sales price, price-per-square-foot and new development/re-sale breakout for the outer boroughs completed yet, so I went with average sales price (yes, I know). The data set is comprised of co-ops, condos and one- to three-family properties in each borough…


[Click to expand and read full post on Curbed]

Check out previous Three Cents Worth posts.


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[The Housing Helix Podcast] Lakshman Achuthan, Co-founder, Managing Director, Economic Cycle Research Institute (ECRI)

December 31, 2009 | 4:49 pm | Podcasts |

In this podcast, I have a conversation with Lakshman Achuthan, the co-founder and managing director of the Economic Cycle Research Institute (ECRI), an independent organization focused on business cycle analysis and forecasting. ECRI maintains business cycle chronologies for 20 countries around the world other than the U.S.

Lakshman is the managing editor of ECRI’s forecasting publications and regularly participates in a wide range of public economic discussions. ECRI’s U.S. Weekly Leading Index is widely followed.

He is a member of Time magazine’s board of economists and the New York City Economic Advisory Panel (where I met him) and serves as trustee on a number of non-profit boards. He is the co-author of Beating the Business Cycle: How to Predict and Profit from Turning Points in the Economy published by Doubleday.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.



[Interview] Lakshman Achuthan, Co-founder, Managing Director, Economic Cycle Research Institute (ECRI)

December 31, 2009 | 3:13 pm | Podcasts |

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[Not Really Counted] 1.7M Units In Shadow Housing Inventory

December 22, 2009 | 1:04 am | wsjlogo |


[click to open full report]

One of the by-products of the credit crunch has been the rise in shadow inventory. Within my own market stats, I consider shadow inventory all units that are complete or under construction but not yet offered for sale as condos (sometimes as cond-ops or co-ops). In many cases the developer was unable to sell the initial block of units offered and is therefore unable to release the units behind them.

The development stalls because the lender behind the developer usually prevents the units to be converted to rentals because the value of the project would fall considerably as a rental on their balance sheet, causing stress to their capitalization ratio.

The lender’s reluctance to make such a decision is referred to as:

  • pretend and extend
  • pray and delay
  • kick the can down the road
  • a rolling loan gathers no loss

First American CoreLogic tracks shadow inventory. They define shadow inventory as real estate owned (REO) by banks and mortgage companies, as a result of foreclosures and other actions, such as deeds in lieu, as well as real estate that is at least 90 days delinquent. They put the amount of shadow inventory at $1.7M in 3Q 09, up 54.5% from $1.1M a year ago.

Visible inventory, like the amount estimated NAR and Census every month, is estimated at $3.8M, down 19.1% from $4.7M last year.

The total unsold inventory (which combines the visible and pending supply) was 5.5 million units in September 2009, down from 5.7 million a year ago. The total months’ supply was 11.1 months, down from 12.7 a year earlier. This indicates that while the visible months’ supply has decreased and is beginning to approach more normal levels, adding in the pending supply reveals there is still quite a bit of inventory that will impact the housing market for the next few years, especially in the context of the current increase in home sales, which is in part due to artificially low interest rates and the homebuyer tax credit.

In other words, even with the surge in activity over the past several months, total inventory hasn’t changed all that much (I agree with Bob).

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[The Housing Helix Podcast] Jerry Feeney, Esq, Real Estate Attorney

December 21, 2009 | 5:46 pm | Podcasts |

In this podcast, I got to catch up with Jerry Feeney, a terrific real estate attorney who specializes in representing buyers and sellers in residential real estate transactions as well as institutional lenders in the New York City metro area. He brings a wide range of experience to the table, including a stint with the SEC, working for law firms specializing in litigation and real estate, before establishing his own firm.

A most importantly, he succinctly answers a legal terminology question that keeps me up at night.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.



[Interview] Jerry Feeney, Esq, Real Estate Attorney

December 21, 2009 | 3:45 pm | Podcasts |

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[In The Media] Bloomberg Radio/TV Housing Recovery May Take 3 to 4 Years

December 18, 2009 | 11:30 pm | bloomberglogo | Public |


[click to play]

I was invited this morning to join Tom Keane and Ken Prewitt on their must listen to radio show Bloomberg Surveillance at 8am. I sat in for about 3/4 of an hour. Love this show – avid listener of their podcasts.

This time, they brought in a few cameras for a few minutes, mid-interview and cut in from the Bloomberg TV broadcast to join us. Fun!

Mentions during show
55 Sq Ft Apartment [NY Post]
Gotham: A History of New York City to 1898 [Amazon]

Show links
Listen to the show podcast [Bloomberg]
Watch the TV clip [YouTube]


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[Three Cents Worth #134] Manhattan’s Recession Bookends Graphed For Your Convenience

December 18, 2009 | 11:00 pm | curbed | Charts |

It’s time to share my Three Cents Worth on Curbed, at the intersection of neighborhood and real estate.

Three Cents Worth: Manhattan’s Recession Bookends Graphed For Your Convenience

This week I plotted nearly 20 years of year-over-year quarterly percentage changes based on Manhattan median sales price adjusted for inflation, and parsed the data out by the number of bedrooms. I dropped four-bedrooms from the mix because of their wild fluctuations, largely due to their nominal 1-2% market share and diversely priced housing stock. I was interested in the pace of growth during different economic periods…


[Click to expand and read full post on Curbed]

Check out previous Three Cents Worth posts.


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[Commercial Grade] Stuyvesant Town/Peter Cooper Village Rent Decontrol Ruling Explained

December 17, 2009 | 1:29 am |

One of the mysteries of the recent credit boom was the way very smart people made decisions that they now regret. Hugh Kelly and I in our latest podcast agreed that “you do the math” simply wasn’t enough. Knowledge of rent regulation intentions was imperative.

Rental office site for Stuyvesant Town/Peter Cooper Village

One of the largest examples of the credit disconnect and the moment I realized the credit bubble had peaked was the moment I heard that the price paid for Stuyvesant Town/Peter Cooper Village was $5.4B a few years ago.

A recent ruling on rents may have been the last straw.

My commercial partner John Cicero in our Miller Cicero commercial valuation concern lays this out plain as day in his Commercial Grade blog extolling the virtues of an excellent white paper by Barbara Byrne Denham, Chief Economist of Eastern Consolidated Properties.

Here’s a great blog on the building complex.


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[The Housing Helix Podcast] Hugh F. Kelly, Real Estate Economics, NYU Associate Professor, Brooklyn Catholic Charities

December 15, 2009 | 11:38 am | Podcasts |

Hugh Kelly joined me today for the podcast. I’ve known Hugh for quite a while and greatly admire his insights.

Hugh is an Associate Clinical Professor of Real Estate in New York University’s Masters Degree Program in Real Estate Investment and Development. He heads his own consulting practice, Hugh F. Kelly Real Estate Economics, which serves national and international real estate investment and services firms, governmental organizations, law firms, and not-for-profit agencies. Prior to establishing this consultancy, he was chief economist for Landauer Associates, where he worked for 22 years until early 2001.

Hugh also serves as the President of the Board of Brooklyn Catholic Charities’ affordable housing development corporation, which has built and manages 3,000 units of low-income family, seniors, and special needs housing. He is a member of the Counselors of Real Estate, the National Association of Business Economists, and the American Philosophical Association. He has spoken to virtually every major real estate organization in the United States, as well as to audiences in Canada, the U.K., France, the Netherland, and Germany.

We served together on the New York City Council Finance Committee Economic Advisory Board and our firms have worked together on several consulting projects.

Hugh provides perspective on affordable housing, his recent Ground Zero consulting, MBA programs and their relationship to the credit crunch among others. He’ll join me again in the near future to expand the discussion on affordable housing.

Check out the podcast

The Housing Helix Podcast Interview List

You can subscribe on iTunes or simply listen to the podcast on my other blog The Housing Helix.