Broker CONfidence

NSFW for language

Alot of this going around.


Yesterday we got carpet bombed by Q4 market reports on the Manhattan market. If you want more of the gory details go the following link.

I do not have much to say because as far as I am concerned it is more of the same. However I did take notice of the New York Times coverage.

Below are some excerpts from the article.


Striking Declines Seen in Manhattan Real Estate Market

Pamela Liebman, president of the Corcoran Group, a real estate brokerage, said that though the Manhattan market had continued to rise in the past year when most of the American housing market was in decline, it “came to a grinding halt on Sept. 15,” when credit markets collapsed and buyers lost confidence.

“Now we see the effects of buyers sitting on the sidelines, and they will remain on the sidelines until they get some confidence back,” Ms. Liebman said. “A lot of brokers are making friends with lawyers and doctors and all those people who were left behind in the heyday of Wall Street, three months ago.”

Beyond the first quarter this year, assessments varied. A number of brokers said that as sellers cut prices, they will create an opportunity for buyers to get good deals that were unimaginable a few months ago, especially at a time when mortgage rates are falling. Several said they were counting on the Obama administration to bring in a wave of confidence that will change the psychology of the market.

“When the market solidifies itself and everyone feels confident that we are on solid ground, you are going to have hordes of buyers,” said Diane M. Ramirez, the president of Halstead.

Notice a trend here? They are throwing around the confidence word around a lot. Does Halstead and Corcoran get together and figure out what catch phrases they should drop for these articles or they just sharing the same PR firm? Whatever they are doing they should just stop and hire Kelly Kreth because whoever is doing their PR is just phoning it in.

In the 2004 election when John Kerry often cited being a Vietnam Veteran as one of his primary qualification to be President. The Republican strategists took his war record used it against him in what is known as “Swift boating” and used it challenge his war record and make him look like an anti war douche. It obviously worked because Obama is now President.


What Pam Liebman and Diane M. Ramirez are doing, dare I say and I do dare,is a form of Swiftboating. What these two are doing are attempting to connect real estate with consumer confidence and latch onto the euphoria of the incoming Obama administration. I am not sure that is a good idea because even President Obama has admitted he has his work cut for him and that we are looking at a trillion dollar deficit.

Here's my analysis and just to reinforce my points I am going to be writing in big obnoxious bold caps.


CONFIDENCE HAS ABSOLUTELY NOTHING TO DO WITH THE CURRENT STATE OF THE MARKET. WHAT THIS MARKET IS BEING DEFINED BY ARE TWO FACTORS WHICH ARE CREDIT AND LIQUIDITY.

THE ERA OF CHEAP MONEY IS OVER AND WITH THE CREDIT MARKETS STILL FROZEN, LENDERS ARE MAKING TRIVIAL ATTEMPTS TO WARM UP THE MARKETS AND HAVE PROVEN THEIR TRUE INTENTIONS BY SIMPLY HOARDING THE STIMULUS MONEY. IT IS ALSO VERY DIFFICULT TO GET A MORTGAGE BECAUSE STANDARDS HAVE TIGHTENED CONSIDERABLY SO THERE IS NO INCENTIVE FOR BUYERS TO ACQUIRE ONE.

BUYING A HOME REQUIRES OPM (OTHER PEOPLE’S MONEY) AND THERE IS NOT A LOT OF THAT GOING AROUND

THE SECOND FACTOR IS LIQUIDITY OR LACK THEREOF. THE REASON WHY SOME PEOPLE ARE NOT BUYING IS BECAUSE THEY HAVE NO MONEY. EVEN THE PEOPLE THAT THOUGHT THEY HAD MONEY DON'T HAVE IT. THEY EITHER LOST IT IN THE STOCK MARKET, REAL ESTATE MARKET, BOSTON MARKET OR THEY WERE F**KED BY MADOFF. THOSE WHO HAVE LIQUIDITY ARE HOLDING IT ON FOR DEAR LIFE AS A RESERVE FUND BECAUSE THEY HAVE BEEN LAID OFF IT IS THE ONLY THING THAT IS ENSURING THEIR SURVIVAL.

EVEN THOSE WHO ARE LIVING COMFORTABLY AND HAVE PLENTY OF LIQUIDITY AT HAND ARE NOT GOING TO JUMP INTO THE REAL ESTATE MARKET. THEY ARE NOT BLIND AND SEE THE BLIZZARD OF KNIVES FALLING ONTO MANHATTAN AND THEY DO NOT NEED A BROKER TO TELL THEM OTHERWISE. IN THEIR MIND IT MAKES NO SENSE TO BE A BUY IN A MARKET WHERE THE INVENTORY IS RAPIDLY DEVALUING.

BASICALLY THIS IS JUST A REVERSAL OF FORTUNE AND THE BUYERS ARE IN THE DRIVER’S SEAT. INSTEAD OF DRIVING ON THE HIGHWAY, THEY HAVE PUT THE CAR IN PARK AND ARE WATCHING THE MULTIPLE VEHICLE COLLISION TAKING PLACE WHICH IS OUR ECONOMY. IT IS ONLY AFTER THEY SEE CONSIDERABLE PRICE REDUCTIONS AND SIGNS THAT THE CREDIT MARKETS ARE STABILIZING WILL THEY EVEN CONSIDER VENTURING OUT.

SO IGNORE PAMELA LIEBMAN AND DIANA "THE DEAD ZONE" RAMIEREZ. THE ONLY TWO HONEST PEOPLE QUOTED IN THAT ARTICLE WERE THESE TWO INDIVIDUALS

“The worst is yet to come; there is a blood bath coming,” said Matthew Haines, a founder of the real estate site Propertyshark.com who prepared the Corcoran report.

But others worry that the market will need more than psychology to support it. Gregory J. Heym, an economist who prepared the reports for Halstead and Brown Harris Stevens, said that unless the economy strengthens, the weakening job market in New York City could further dampen enthusiasm for real estate. He said the city had lost about 18,000 jobs in the 12 months that ended in November, while city economists are now predicting a loss of 170,000 over the next year or two.

“Each time they update the forecast, it gets worse,” Mr. Heym said.

GOD BLESS THEM FOR STICKING TO THEIR GUNS!