Manhattan Mansions Fall from the Sky - Barron's 15 comments
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Until recently, the luxury real estate market remained buoyant as the rest of the U.S. housing market crumbled. Now the stock market has crashed, hundreds of thousands of financial jobs are disappearing and Wall St. bonuses are expected to fall by 50%. Barron’s predicts the fallout on luxury housing markets like Manhattan and its tony suburbs will cause price declines of 20%-25% over the next five quarters.
Transactions in the $5 million-plus market are generally in cash, and so are unaffected by tighter mortgage standards. Foreclosures, too, are rare. But move-up sellers can’t sell their luxe digs and buyers are waiting for prices to fall further. Foreign buyers who were propping up markets like Manhattan and Florida are now retreating as their own fortunes wane.
Bel Air, Calif., Las Vegas and New York's Westchester County have seen price cuts on 45%, 29% and 28% of all luxury listings, respectively. Inventory and time on the market is skyrocketing while incentives abound. In some markets, luxury homebuilders have noted a 50%+ decline in demand.
Traditionally rich enclaves like Beverly Hills and Greenwich, Conn. have seen less price cuts than in places that were just bid up during the housing boom. But that doesn't leave them immune. Barron's warns New York: "Look out below!"
Index Universe says CME futures are predicting further house price declines in places like Las Vegas (another -12.97%), New York (another -13.40%), LA (another -17.22%) and Miami (another 11.93%). That’s without inflation included and after declines of 30% and more in some cities. Jordan Kahn reports NAR figures of -35% declines in Los Angeles, and -28.4% in Las Vegas. One positive: Matt Stichnoth says posh Orange County prices have fallen 50%+, but sales rose 66.6% in October.
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This article has 15 comments:
The ones to pity are the former $3 million home owners now stuck in a $2.25 million home that they can't sell to trade up to a $8 million home now knocked down to $6 million.
I mean, why must these people suffer after all they have done for the rest of us?
I think the entire Wall Street matrix - which does nothing but talk on the phone and shuffle pieces of paper - should be outsourced to India. Those people have lower cost structures and would hopefully rip less out of our accumulated capital base for their own enrichment.
Still can't figure why a guy can walk into a bank and end up in prison for walking out with $10,000 obtained at gunpoint when white collar criminals - using the chicanery of stock trading - walk off with a few million fiat credits scott free.
Look at how Dr. John Malone appropriated $1 billion of shareholder value from his various liberty reincarnations of tele-communications - all through stock options. And look how these companies have performed over the last 10 years.
Even recently one of the liberty clones burned through something like $30 million of its capital - isn't capital king these days? - to take some stock off his hands. And the move, by reducing overall outstanding stock, only strengthened his strangehold.
This destructive greed has not only been on Wall Street, but inside the corporations whose paper stock and bonds they ruthlessly churn.
And how about those rating agencies and their highly overcompensated overseers.
And why should regulators who failed to regulate still cling to their federal jobs and perks?
Maybe we should sue the regulators to recover wages and benefits paid to them the past few years.
But we won't. After all, they did not walk into a bank and use physical intimidation.
Cheap labor is a natural desire for any capitalist. When labor costs negatively impact roi, machines and resources are moved to areas where cheap labor can be found. Management clearly holds all the cards, and has always been willing to sacrifice communities that once provided the labor or outlets for it's profits.
But it's still a bit of a stretch to say that outsourcing alone is the cause of the current global financial crisis don't you think? What about greed, corruption, and fraudulent pilfering of the public purse at the highest levels of financial and governmental responsibility?
The Queen of Hearts when she was told she had used an oxymoron,
said "What? Go away! Don't bother me with that. We already have enough dumb animals running around the palace"
"when in this life you ramble,
you meet some funny men,
some'll rob you with a six gun,
and some with a fountain pen"
woody guthrie (sort of)
On Nov 23 11:06 AM nukldrager wrote:
> vbierschwale; while I agree with your point, the question that nags
> me is how to have capitalism, which is fundamentally buy low, sell
> high in every aspect from labor to investment, and allow existing,
> established communities to continue and prosper. Might be impossible.
>
> Cheap labor is a natural desire for any capitalist. When labor costs
> negatively impact roi, machines and resources are moved to areas
> where cheap labor can be found. Management clearly holds all the
> cards, and has always been willing to sacrifice communities that
> once provided the labor or outlets for it's profits.
> But it's still a bit of a stretch to say that outsourcing alone is
> the cause of the current global financial crisis don't you think?
> What about greed, corruption, and fraudulent pilfering of the public
> purse at the highest levels of financial and governmental responsibility?
>
> The Queen of Hearts when she was told she had used an oxymoron,<br/>sa...
> "What? Go away! Don't bother me with that. We already have enough
> dumb animals running around the palace"
>
>
>
See the link below. It is mind boggling!
www.taxfoundation.org/...
I would prefer to live in a society where I have the opportunity to make my own success than by being told by a government functionary what role I will play in society. I found that working for a corporation seemed like a pointless existence, so I built up my skill set and moved on; I suggest you try it also.
And if a substantial segment of the voting population had not voted in these clowns in the first place, we would not be having this discussion.
I am reminded of how certain governors of certain states were quick to take credit for the economic prosperity and budget surpluses that their states realized during the dot.com boom years. That's like the doctor saying he made the patient feel better during a state of high fever and delerium, right before the patient expired...
Jim
On Nov 23 01:40 PM Hmm?! wrote:
> If some politicans in washington had not voted against oversight
> of Fannie and Freddie in 2003, we are not having this discussion.
>
>
> See the link below. It is mind boggling!
>
> www.taxfoundation.org/...
> vbierschwale; while I agree with your point, the question that nags
> me is how to have capitalism, which is fundamentally buy low, sell
> high in every aspect from labor to investment, and allow existing,
> established communities to continue and prosper. Might be impossible.
>
> Cheap labor is a natural desire for any capitalist. When labor costs
> negatively impact roi, machines and resources are moved to areas
> where cheap labor can be found. Management clearly holds all the
> cards, and has always been willing to sacrifice communities that
> once provided the labor or outlets for it's profits.
The reason to get to stable or dropping population. Then labor is in the driver's seat as there isn't anywhere to move to for cheap labor. Imagine if every country in the world had the population trends of Japan or Europe. Growth comes from enhancing productivity and new product innovation instead of cutting labor costs by moving. In other words, if there is a shortage of labor, what happens to the price of that labor?
So stable or dropping world population is what we need for capitalism to work for everyone. Can we get there?
Stable is doubtful, but dropping is highly likely in the decades and centuries to come.
Meanwhile, outsourcing is nothing new - not even in the USA. The Hamilton Watch Company was outsourcing it's military watch cases back in the 70's. Outsourcing is just easier now.
BTW, Americans have been at it for longer than that by voting directly with their wallets. Cars, TV's, stereos . . . the list is endless.
T.C.
you forget that fewer employees also means fewer consumers and then you have to factor in the increasingly productive machines. pretty soon, we will not need people to produce products, anymore than we use percentage wise to produce food on modern farms. star trek here we come. all we need is a really cheap and plentiful source of energy, some room temperature super conductors and some better batteries. beam me up, scotty.
If you bought anything with a 'made in China' label, count yourself among them.
I have read SA for quite some time and the amount of rhetoric from, shall we say, left field, has increased dramatically over the past few weeks, usually snuffing out (but not always), logic, credibility and common sense.
I am glad to see there are still readers of these pages who can spot nonsense and BS when they see it.