Housing slump comes to the Hamptons
Manhattan has been mostly immune from the Housing slump. This has been primarily due to lots of Wall Street money, and the cheap dollar, which has made real estate in the NY area very attractive to Europeans.
The Hamptons are apparently less immune. Its a seasonal market, so when problems show up, they do so very quickly. Its now the beginning of the rental/purchase season, and the issues are brought into bright relief:
"In a sign that falling prices and home sales gluts are no longer limited to the nation’s declining rust-belt cities or bubble markets, prices for gilt-edged properties in East Hampton and Southampton have fallen sharply.
The Long Island resort towns, among the wealthiest and most well-connected in the US, experienced a boom between 1998 and 2007 when home values quadrupled...
The three-month running median sales price of single-family homes in the two towns fell 19.2 per cent to $638,600 (€400,000, £320,000) between December and February, according to Suffolk Research. That is almost as much as the 19.3 per cent drop in home prices that Miami and Las Vegas, where the boom and bust in the housing markets has been most dramatic, suffered in the whole of last year, according to the S&P Case-Shiller house price indices.
As we noted over the weekend, sales of vacation property fell 31% across the US, against a 10 per cent drop in sales of homes bought to live in.
The Hamptons are now facing a high end rental market with decreasing demand, amid a glut of properties to let. FT specifically mentioned several properties owned or rented by Bear Stearns executives that are back on the market. Agents said the rental market is off 10%, after several years of double digit gains.
I wonder if this might be presaging weakness in the NY housing market . . .
>
Source:
Housing slump comes to the Hamptons
Daniel Pimlott
FT, March 31 2008 19:35
http://www.ft.com/cms/s/0/ca4ccbbe-ff49-11dc-b556-000077b07658.html
See also:
New York City Real Estate Market Slows as Wall Street Cuts Jobs
Sharon L. Lynch
Bloomberg, March 31 2008
http://www.bloomberg.com/apps/news?pid=20601109&sid=ahgWx1z6LFxE&
Home building tumbles for 24th month
MARTIN CRUTSINGER
AP, April 1, 2008
http://news.yahoo.com/s/ap/20080401/ap_on_bi_go_ec_fi/economy_14
Tuesday, April 01, 2008 | 12:15 PM | Permalink
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Comments
Another example of "contained".
Posted by: Pat G. | Apr 1, 2008 1:03:28 PM
Instead of calling these sucker rallies can we now refer to them as Dennis Kneale rallies.
Posted by: Eric | Apr 1, 2008 1:04:24 PM
Lizzy bottom ticked it a few years ago, who's the lucky top ticker? But, the market seems to quickly digest any down cycle. So 2 month recession and lets get back to buying. Pessimists need not apply.
Posted by: mitch | Apr 1, 2008 1:05:42 PM
I'm sure Jimmy Cayne will be buying a fantastic house since all of OUR money just backstopped his stock AND now the Treasurey is backstopping the losses from the BSC/JPM bullshit that is called a merger.
XXXXXXXXXXXXXXXXXXXXXXXX
this is bordering on insanity...now the banks have no restraints on them as fuckin' Paulson et al will just guarantee more of this type of bailout.
These people had better be investing in security details because at the rate this is going.......bullets are going to be in short supply.
Ciao
MS
Posted by: michael schumacher | Apr 1, 2008 1:07:03 PM
F- bombs flying from MS = market's are rallying - every time.
I'm short some SDS and QID, as well as FXP, EFU and of course I bought $25K of IAU the other day when it was at $1,000(perfect contrarian purchase).
I'm holding on since I'm long with about 65% of my portfolio. That being said, it sure seems to hurt when the market rally's and I have these hedges on.
Oh well, net-net I'm still making money.
MS - really, just step away from the keyboard.
CIAO
Posted by: Jdamon | Apr 1, 2008 1:41:49 PM
If I didn't see the tape moving higher I'd assume this headline from the NY Times was an April Fool's Joke...
Shares Surge on Bank Writedowns
http://www.nytimes.com/2008/04/01/business/01cnd-stox.html?hp
Posted by: Brian | Apr 1, 2008 2:15:06 PM
sure you did..
You know it would really mean something had you said it BEFORE THE MARKET WAS ALREADY UP.
But if that makes you feel better......
May be if you were concerned about people other than yourself you might have some passion about the continued destruction of our economy for YOUR benefit...
But I guess that doesn't matter when you lie about making money.
Douchebag
Ciao
MS
Posted by: michael schumacher | Apr 1, 2008 2:35:04 PM
The Hahhh-mptons? Oh gawd Lovelie, this is serious, tell Gilligan and the Skipper to set sail for that three hour tour at once.
...a three hour tour...
Posted by: VennData | Apr 1, 2008 2:43:39 PM
The markets don't give a shit about fundamentals.
They now have the full faith and credit of the US taxpayers to cover their asses regardless of what happens, to whom or to what degree.
They are also telling us we can stuff that moral hazard argument right up our cuzoo.
Posted by: BG | Apr 1, 2008 2:52:17 PM
Howdy Bears,
Our party is over!
Kind Regards,
David Tice
The Complacent Bear Fund
Posted by: Complacent Bear Fund | Apr 1, 2008 3:01:24 PM
MS.... Give it a rest already. You attack anyone who doesn't fall in line with your thoughts and opinions, yet your posts paint you as the ultimate amateur. Sorry to be rude, I have to call a spade a spade. Learn how to handicap both sides of the trade and quit complaining about how unfair the markets are for ignoring you rantings.
Posted by: Matt M. | Apr 1, 2008 3:08:19 PM
Sell in May and go away.
I think my strategy this year is going to be fun and profitable.
Posted by: Vermont Trader | Apr 1, 2008 3:13:46 PM
Off topic (not that some of the posts above are on topic), but did anyone else notice David Sterman's correction on RealMoney.com where he complained that Circuit City was closed Sunday of last week, and he just was told today that day happened to be Easter, and most stores were closed? What an idiot! Mental note not to pick up on trends from someone unaware of major holidays.
Posted by: Yawner | Apr 1, 2008 3:25:18 PM
MS,
The market is a two-way street. We have had a one-way bear complacency party for six months.
The party is over, my friend. The party is over...
Kind Regards,
David Tice
The Complacent Bear Fund
Posted by: Complacent Bear Fund | Apr 1, 2008 3:28:49 PM
Only in America can we have a rally such as this based on the most idiodic and meaningless news. Ever heard of short covering?? Wake up you sheep!
Hey Michael Schumacher, sounds like you've got it all figured out then, huh? All of the other Wall Street gliterratti geniuses can't keep a single dollar of their own (just the Fed's [tax payer's] money) in their portfolios, but somehow YOU have figured it all out. Why aren't you being interviewed by every major news organization in the U.S.? You've got the magic that nobody else seems to have so they're beating down your door right? Grow up you poser. 25k is your entire portfolio and you know it.
Tell you what, you go ahead and keep all of those long positions you have. I'll throw you a nickel when I walk by your cardboard box.
Peace (not really)
Posted by: MarketBrass | Apr 1, 2008 3:45:27 PM
thanks but I'm way beyond being on both sides...
but please continue to think that someone who is passionate about what is going on here can only have a one track mind (nee short) for making money.
That you accuse me of being unable to understand that shows just how amateur you are.....
Marketbrass-
did that make you feel better??? add a zero and you'd be closer than your "projection"....but I see how that made your day.
Ciao
MS
Posted by: michael schumacher | Apr 1, 2008 3:55:03 PM
and while you perma bulls are at it why don't you enlighten all of us as to what has changed, since yesterday, fundamentally speaking.
All I see is juiced futures, juiced financials and a temporary psychological shift that is a direct result of blatant manipulation.
Please show me some real proof....
All you have is intervention and a power grabbing administration. That is not anything I want to invest in since it continues to allow the system to gorge at will with no consequence for poor decisions.
Hold and Hope is not just an attitude...it's a full blown strategy for some.
Ciao
MS
Posted by: michael schumacher | Apr 1, 2008 4:04:45 PM
MS,
With all due respect, you are clueless (and BR will not cover it for you) as to what is going on.
Let me try explaining it to you. You (and the bears like BR) have been betting on a severe recession, but today's ISM number was consistent with GDP growth of 2.4%
Have you analyzed today's number yet?
I suggest you cover your shorts ASAP.
Surprise, surplice, BR is quiet about it.
Kind Regards,
David Tice
The Complacent Bear Fund
Posted by: Complacent Bear Fund | Apr 1, 2008 4:21:30 PM
I don't think Mike ever called the markets unfair or called himself an expert. He is just colorfully irritated how their are no risks for the rich.
I find it laughable how this is the bottom and somehow earnings and fundamentals for companies going forward are going to be great. Bailout or no bailout, where are the earnings going to come from.
Marketbrass, soft paw tough guys like you are going to be begging for your life from some broke J6P while his shot gun is down your throat.
This market assumes the balout goes through. I know of a couple grassroot petitions from taxpayers to throw a little wrench into that mess.
For what it's worth, I imagine old MS has got a brick house built for this coming mess.
Posted by: Ken H. | Apr 1, 2008 4:25:21 PM
>>Have you analyzed today's number yet?>>
You must mean that wonderful ISM report that basically says:
"we don't suck as much as we thought we did but we still suck"
Contraction is still contraction no matter how you attempt to tart it up. No matter what it says you(and others) are making one release a trend.....it still shows contraction.
with all due respect.....fuck off.
Hows that.
Ciao
MS
Posted by: michael schumacher | Apr 1, 2008 4:33:29 PM
MS -
You are a macro-wanker. While you continue to make broad, biased statements about the ISM and the beginning of the apocalypse, good money is (and has) been going into the select good companies here in the US and more importantly abroad; companies that are not only creating lots of cash but have little current debt to speak of, pay real dividends and are in businesses that are growing. Can you name any companies that are worth owning today in your opinion? Probably not because this is where you come before you go home to get whacked upside your head by your angry wife. I'll give you two: AMX and RIO. The good companies don't need a full blown recovery (whatever that means anyway), they just need the psychosis to subside that everything is falling and we'll never get up - which to your dissatisfaction has apparently happened. On a positive note, Hampton's real estate pulling back is a very positive sign; now we need Manhattan to get back to $800 psf or so and I will feel good about reaching a meaningful inflection point.
Posted by: Fred | Apr 1, 2008 4:49:26 PM
Mathematically (and historically) you would need ISM manufacturing to be around 42-44 for a recession, but the number was 49 (one month of data but still above what the bears were expecting and not consistent with a “severe” recession)
I have been trying to help you (telling you something that you will not hear from an opinionated BR in his bearish land) but you are telling me to f... off.
Anyway, you are welcome.
Posted by: Complacent Bear Fund | Apr 1, 2008 4:55:54 PM
MS,
It's pretty evident your concern isn't simply making money. It's moral as well. I believe it actually pisses you off to make money at the expense of our future. Which is admirable in my book.
Don't listen to the haters.
Posted by: saltwater | Apr 1, 2008 5:29:09 PM
Bove Recommends Buying Financials `Very Aggressively'
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vrdGuRMabQ70.asf
Posted by: Complacent Bear Fund | Apr 1, 2008 5:30:36 PM
Somehow, I suspect that not everyone is distraught over the decline in the value of houses in the Hamptons.
Posted by: DL | Apr 1, 2008 5:35:22 PM
I'll wait till Friday to see if there are any gloating bulls left around these parts. My guess is we will lose most (if not all) of the gains the market made today. I mean how is it different than any other rally we've seen in the last few weeks - none of them have stuck.
BTW wasn't this thread supposed to be about Hamptons Real Esate? If the NYC banking world is in for the 'adjustment to reality' I think it is, my guess is that this may be the best year for Hamptons home sales for quite a while. Let's face it these things take time to trickle down (up?).
Posted by: Jrade | Apr 1, 2008 5:48:56 PM
Well let's see how the Hamptons rentals go. Usually there are bargains to be had in April, and by May everything is settled except for the greediest holdouts. I take it that there are only troubles at the tippity top as per the guy "having trouble finding a summer tenant for a $200,000-a-month ocean-front property that would normally have been snapped up."
Geez, I can only imagine his troubles.
Posted by: Paul in NYC | Apr 1, 2008 8:10:28 PM
Saltwater-
Finally someone actually gets it.
This whole thing is not about making money, if you know how ....you will. I'm already in a better place this year than last. But these people have no clue what is going on under there noses. All it takes is a few quick gains and any semblance of moral compass is thrown out the window. I can't accept that and won't.
It pains me to no end that apathy replaces any sense of what is wrong or right as long as a few quick bucks falls into their laps. And that these people can't even recognize that luck and massive gov't intervention had a large part in those quick bucks appearing to them. When I get lucky in the market....I admit it....apparently that is not a trait that goes over to well in the chest thumping "up" world that we have created in our markets.
I do not claim to know it all......and what I do know and presented here is easily verifiable.....it's not my job to provide links to you...it's everyone's job to be educated about what is being done to the system in order to allow a small number of people to control it for a longer period of time.
BTW "Mr. Bear" take a looksey at where contraction is marked on the ISM report....you'll see something I've already made you aware of...contraction is contraction no matter how you try to spin it.
Trying to school anyone with that kind of attitude will get the "fuck off" all the time.
Ciao
MS
Posted by: michael schumacher | Apr 2, 2008 10:17:02 AM
