FRB Beige Book – NY Area Real Estate

From the Federal Reserve:

The Beige Book – Second District – New York

Construction and Real Estate

Commercial real estate markets in the District were mixed in the first quarter. New York City’s office market continued to deteriorate, with vacancy rates climbing to a 4-year high at the end of March and asking rents on Class A space falling 14 percent from a year earlier. A major commercial broker cites a huge increase in available sub-lease space, mostly from financial service firms. In contrast, office markets in outlying areas were steady to slightly stronger in the first quarter: vacancy rates and asking rents were little changed in northern New Jersey, Westchester and southwestern Connecticut; in Long Island, vacancy rates improved to a 3-year low, while rents edged higher. Similarly, office markets in upstate New York showed resilience: office vacancy rates declined in the Buffalo and Syracuse areas and were little changed in metropolitan Rochester and Albany; rents were little changed across the board. The purchase market, however, is still reported to be exceptionally sluggish throughout most of the District.

The rental market for industrial space was steady to softer in the first quarter, as was the market for retail space. Manhattan’s retail market softened more than others: while vacancy rates were steady at low levels, asking rents declined sharply for the second straight quarter, and a relatively large volume of new retail space is due to be completed in the fourth quarter of 2009, much of it still unleased.

Housing markets have continued to weaken in much of the District since the last report–particularly in the multi-family segment. New York City’s rental market continued to soften in March: asking rents in Manhattan were estimated to be down just 5-6 percent from a year earlier, but with the growing prevalence and size of concessions (waiving of rental fees, 1-3 months free rent, etc.), effective rents have reportedly fallen much more sharply–especially in full-service buildings. The inventory of rental listings has continued to increase, particularly in non-doorman buildings; one large brokerage firm reports that the rental vacancy rate has nearly doubled over the past 12 months. Manhattan’s apartment sales market deteriorated markedly in the first quarter: the median sales price for condo re-sales was down 16 percent from a year earlier, while co-op prices fell 22 percent. The number of sales transactions fell nearly 50 percent from a year earlier, while the inventory (number of units listed) jumped 34 percent. Moreover, an industry contact maintains that there is a sizable “shadow” inventory of apartments–new condo units that are unsold but not yet listed. While quarterly data are not yet available for other parts of New York City, Brooklyn’s market has reportedly slackened to an even greater extent than Manhattan’s, largely due to a huge supply of newly constructed units.

The market for single-family homes has been mixed but generally weaker since the last report. A New Jersey industry consultant notes that resale activity, though still sluggish, picked up a bit in March–even after accounting for seasonality–but only on properties with fairly steep price reductions. However, a real estate broker in northern New Jersey maintains that traffic has been unusually quiet in recent weeks. Both contacts estimate that prices are off about 20 percent from their peaks, on average, and note that much of the activity is in “short sales”, where the mortgage holder agrees to forgive part of the debt to the extent that it exceeds the selling price. Real estate contacts in upstate New York indicate somewhat more favorable market conditions. Home prices in the Buffalo-Niagara Falls area have reportedly remained steady thus far in 2009, though sales activity has fallen roughly 20 percent from 2008 levels. Contacts in both upstate New York and northern New Jersey note that the new tax credit for first-time home buyers has spurred at least some interest among potential buyers. Industry contacts throughout the District indicate that new home construction is running substantially lower this year than in 2008.

(emphasis added)

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48 Responses to FRB Beige Book – NY Area Real Estate

  1. sas says:

    Obama = Bush = failure

  2. kettle1 says:


    Such an incident will result in all of North East US experiencing lethal dose of radiation, including some parts of Sarah Palin’s version of “Real America”. Of course, bye bye, sweet Princeton!


    Substantial radiation effects would be felt, but nothing close to the entire northeast receiving a lethal dose!!!!

    i’ll be nice and point you to a real source if you care to educate yourself

    also, fallout would be carried by/follow prevailing jet stream patterns which in the northeast would leave much on NY state, VT, NH and MN receiving low to moderate fall out. CT, RI, and MA would be likely to receive substantial fallout.

    that is far from dropping a lethal does on the entire northeast. You are also forgetting that a lethal does of radiation is a statistical spread and is different for everyone

  3. sas says:

    “New York City’s rental market”

    alot, and I mean ALOT more inventory has yet to hit the market. Many projects still being finished. I see it all the time.

    Shakeout is far from over, no matter what your beloved CNBC tells you.


  4. grim says:

    Obama = Bush = failure

    What? No blame for Congress?

  5. sas says:

    hugh…radioactive fallout?

    gee wizz, that would really lower RE prices around here.

    but then again, the EPA will just lie to you like they did about the dust on 9/11 and 3 Mile Island.

    don’t come crying to me when you have mesothelioma.


  6. sas says:

    “What? No blame for Congress?”

    yes. I believe you got me.

    If there is anyone to blame for than the executive branch & Wall St. bankers is the Congress.

    So, I somewhat stand corrected.

    they are all failures & crooks, and to a certain degree, so are we all for letting these Bozos do what they do…. myself included.


  7. sas says:

    “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition”

    a hogwash article


  8. Comrade Nom Deplume says:

    (8) Sas

    Here I disagree with you. I have expected this for years.

  9. Victorian says:

    Nom (137) From previous thread –

    ““The sad part is that I would have joined the Tea Parties if they were really protesting against what is wrong – socializing the losses of the private sector.”
    Actually, this was a central theme of the tea party crowds, from what I observed.”

    Maybe you were at some parallel universe Tea Party, because most of the reports and photographs I have seen are anti-tax, anti-govt and anti-Obama.

    As far as I could observe, there wasn’t a single protest against the looting of the country by Wall St.

    BTW, most of the bailouts happened during the Bush Regime. This does not excuse Obama for what he is doing, but you tend to conveniently blame “lib punks” for everything under the sun. Surprising, because 22 of the last 30 years, we were under Republican rule.

    As far as I am concerned, democracy is an illusion in this country. Financial Oligarchy rules.

  10. NJGator says:

    Price reduced on Strahan’s old house in Montclair. Now can be had for the “bargain” price of $5,795,000.

    The place is assessed at $3,833,400 with an annual tax bill of $88,206.53.

    Any takers? Gary?

  11. Shore Guy says:


    And some people complained when we produced the W-78.

  12. kettle1 says:


    you mean people actually believed that the dust from the WTC collapse wasnt harmful?????

  13. sas says:

    “Here I disagree with you. I have expected this for years”

    i think its an incomplete article, leaves out alot of factors. but, at least its not CNBC.


  14. sas says:

    “democracy is an illusion in this country”

    yup, advertisement agencies run elections. Team Obama beat out Apple & Nike.


  15. sas says:

    “you mean people actually believed that the dust from the WTC collapse wasnt harmful?”

    oh yeah man.

    There are people who actually think AL qaeda are ……..

    well, lets leave that blank. this is a real estate blog afterall.


  16. Sastry says:

    Kettle1: You are right, I was wrong about the extent of lethal dose. My numbers were way off. I misread the result from a PBS site (they used 900 rem to mean lethal dose — it is a bit higher than LD90/60, about 620 rem). Also, I estimated 300 miles based on their calculations (along the wind direction), but used it as a radius.

    More detailed calcs show most of the NE corridor from Trenton to Boston getting more than LD50/60 and some parts over LD90/60.

    Thanks, for your post. Gave me a chance to refresh some stuff…

  17. sas says:

    “Guardian Angels’ Sliwa offers NY ‘Underbelly Tour'”

    yup, I was there.

    you should of been in Lodi during the 70s.


  18. kettle1 says:

    sastry 17

    that i assessment sounds about right from what i have read.

    but you are correct that a 20 MT blast means that the northern half of NJ is toast on way or another

  19. RentinginNJ says:

    Obama = Bush = failure

    What? No blame for Congress?

    Lets not forget voters, who prefer the short term quick fix.

  20. Sastry says:

    nom and keith:

    “comparing a person who makes $250k to the richest guy in the country is silly”

    And yet that is precisely what O’bama, the Democratic Party, and the Internal Revenue Code has done.


    FWIW, the cut-off for upper tax bracket wrt income taxes and for phase out of is not something new that O created.

    And, at the higher brackets, the worth of deductions is not much anyway (as a fraction of total income). In fact, some other marginal taxes can easily become zero — and depending on lifestyle choices, one can really get to a base line 50 to 60% of income direct into savings. With a good accountant and proper estate planning, the taxes can be steered much, much lower.

  21. JBJB says:

    The idea that O is somehow cutting taxes for 95% of the population is a joke. Somewhere around 40-47% of people in this country don’t even pay income taxes, how can you cut income taxes for someone who doesn’t pay any? It’s called a credit, aka welfare.

    The biggest tax hike O wants is the extremely regressive energy tax for his silly cap and trade boondoggle. Cap and trade has already been demonstrated to be a complete failure and serves no purpose other than creating another huge, useless, government bureaucracy so half-wits w/ little education can have jobs in DC. This tax will hit low or middle income people the hardest by far. Businesses who use energy will pass this tax directly on to consumers. This is reason enough to protest.

  22. homeboken says:

    Has there been any discussion about the Texas Gov. doing some sabre rattling with the secession talk? I’ve spent a lot of time in Texas and these folks absolutely think that they live in their own country anyway. The next step of attempting formalized recession is not that big of a leap.

    What are the thoughts? Just show-boating and talk, or possible tinder box?

  23. yome says:

    Housing index posts biggest jump in 5 years
    Economist: ‘We are at or near the bottom of the current housing depression’

  24. All Hype says:

    As a result, homebuilders have reported an uptick in traffic in recent weeks. KB Home, a Los Angeles-based homebuilder, reported last month that new home orders jumped by 26 percent in its fiscal first quarter.

    Big deal, let’s see what the cancellation rate for these new orders are before we get all a warm and fuzzy feeling.

  25. imkeithhernandez says:

    sastry, i never mentioned O specifically in any of my posts wrt the formation of the upper tax bracket… i do think the idea that i can lower my taxes through this or that deduction is part of the problem though

    rather than paying an accountant to fill out piles of paperwork wouldn’t it just be easier to nix the income tax (and really, is it the govs business how much i make… this is something i don’t tell family or friends even and now i have to tell the gov) and raise the revenue through a national sales tax

    this would be anonymous, require no reporting, be easy to collect and it would broaden the tax base so that mobsters and others in illegal, cash business entities could be collected on as opposed to the current system where they don’t

    heck, make it progressive and don’t have it levied on food and utilities

  26. Sean says:

    re# 23- homeboken – ever been to Dallas?

    Been there and I have seen how the military lands its jets in Dallas burbs for service, fact is Texas ranked second among states for total defense contract value.

    11,658 Texas companies contracted with the Department of Defense (DOD), earning a whopping $197.1 billion from 2000 to 2007, $39.5 billion of that amount in 2007 alone. Texas ranked second among states for total defense contract value in 2007, behind only Virginia’s $40.9 billion.

    Texas Governor Perry has been on the MSM lately saber rattling but the fact still remains without Federal Defense spending, coal burning power plants, oil wells and refineries that place would be cow paddies and tumble weeds.

  27. Sean says:

    cow patties that is, and they are everywhere in Texas.

  28. Paul Yarbles says:

    Victorian #10 sez: As far as I could observe, there wasn’t a single protest against the looting of the country by Wall St.

    Perhaps this article will shed some light on why this is so…

    Some excerpts…

    At first glance, the sites appeared to be unconnected and unplanned. But many were suspiciously well designed and strangely on point with their “nonpartisan” and “grassroots” statements. It was as if all of them were reading from the same script. The Web sites heavily linked to each other, spreading their mission with help of Facebook and Twitter feeds. FreedomWorks, as if picking up on rumblings coming from the depths of the conservative netroots, linked to them, too.

    But as our investigation showed, the key players in the Tea Party Web ring were no amateurs, but rather experienced Republican operatives with deep connections to FreedomWorks and other fake grassroots campaigns pushing pro-big-business interests.

    To understand what the Tea Parties are really about, timeline is everything. The Tea Parties were never about the little guy’s fight against big government or Wall Street. FreedomWorks did not uncork Santelli while the government was bailing out the banks. The FreedomWorks machine was idle while Citibank and GE pocketed their billions. (The latter, incidentally, a big donor to FreedomWorks).

    Freedomworks kicked off its anti-tax, anti-spending movement only when the government announced it would give money to regular Americans to help avoid a wave of housing foreclosures.

  29. Paul Yarbles says:

    Oops, I forgot to mention that there is some foul language on that site I linked to above. Consider yourself warned.

  30. Shore Guy says:

    About Texas:

    If Texas left, would the nation care enough to fight to keep it? One downside to its leaving, at least for our KU friend in Bkln, is that it would mess-up the Big 12 Conference.

  31. Shore Guy says:

    Texas would have to form its own professional football leagu: Dallas and Houston.

    Houston v. Dallas followed by Dallas v. Houston, for weeks on end.

    Maybe W could run for president there, seeing that he has experience and did such a crack job for all of us..

  32. Shore Guy says:

    Texas would have to form its own professional football league: Dallas and Houston.

    Houston v. Dallas followed by Dallas v. Houston, for weeks on end.

    Maybe W could run for president there, seeing that he has experience and did such a crack job for all of us..

  33. firestormik says:

    From the previous thread:
    Man, we hired an Indian company a while ago to develop a report for us. SAP R/3 + ABAP if you know what I’m talking about. After 6 months they gave up and we never paid them. It took 48 hrs for the code they made to finish. I personally had to redo it from scratch (and learning from scratch how to do ABAP, yes I had a good background in assembler, C++ and Pascal). Result – 1200 lines of code opposite to 12000 they did. Run time 20 seconds.

    sastry says:
    April 14, 2009 at 11:04 pm
    “Just from my experience.
    I’ve rarely met\spoken with a really knowledgeable Indian. Most of you guys say “will do” (with the head shaken side to side) but never do. So whatever you said about your education is NOT TRUE”

    W.T.F. is that supposed to mean?

    You know what, you’ve helped me… I’ve never been good at knowing when to stop, but this is a wonderful opportunity to do so. Thanks

  34. Shore Guy says:


    All this discussion of lethal doses brings back memories of health physics and nuclear engineering classes.

  35. yikes says:

    no shot texas goes anywhere. it couldn’t control the border.

    where would Friday night lights be filmed?

  36. PGC says:


    Can you pull the details on 10 Franklin Ave Midland Park. Tarvin in Ridgewood had it on offer for about 2 weeks. I wonder if it went that fast. It is an interesting colonial on the Ridgewood border.

  37. stan says:

    just to jump into the tax debate, I hate mailing, or efiling now, my taxes to NY, NJ and Fed……..

    I still do it, but it hurts. wife and I are fortunate to have made more over the last few years, but its tougher to see it come out at once, in addition to per pay period.

  38. stan says:

    on another note, I usually can catch up on the blog after hours, and when you cut away the fluff in John’s posts, he does bring up a lot of good stuff.

    his value goes beyond the hilarity and he definitely has had a lot to say over lent, its just been pent up and coming out rapid fire the last few days

  39. chicagofinance says:

    Shore Guy says:
    April 15, 2009 at 9:08 pm
    Fallout: And some people complained when we produced the W-78.

    shore: speaking of which….are they building an exit ramp from GSP-N to W-78?

  40. sastry says:

    #34… firestormik

    You were saying something to the effect of “all Indians are frauds” or “no Indian is well educated”?

    I’ve worked with a couple of dumb programmers from India — I get the blame because of the retarded phone interview I conducted with softball questions… I’ve also worked with some really smart and educated people, some of them are Indians too.


  41. Pat says:

    stan, get with the program. Last line should read:

    “…just been pant up and coming out..”

    Sastry, your retorts scuk. Poor use of foul language and little venom. You could have at least sucker punched with the cf and/or nom “holier than thou tactic” and tossed around some dumb-ass fancy words so jim would have to go google them.

  42. Pat says:

    That’s it with the charity cases. Helping kittens and Indians. I gotta get me a job before I lose it.

  43. Shore Guy says:

    “hore: speaking of which….are they building an exit ramp from GSP-N to W-78”

    I assume so, with all the construction going on up there.

  44. cobbler says:

    “hore: speaking of which….are they building an exit ramp from GSP-N to W-78″

    I assume so, with all the construction going on up there.”

    Not sure this is the first of the 2 to be built – maybe GSP-S to 78E which is currently as bad or worse. Amazing it took as little as 45 years or so to figure out that the full interchange is needed.

  45. cobbler says:

    Depression Lurks Unless There’s More Stimulus: Robert Shiller

    Commentary by Robert Shiller

    “…In the face of a similar Depression-era psychology today, we are in need of massive pump-priming again. We appear to be in a much better situation due to the stronger efforts to date. Still, there is a danger that, because of a combination of faulty economic theory and inadequate appreciation of human psychology, as well as deep public anger, we will not continue with such stimulus on a high enough level.

    We desperately need to be persistent, keeping our government response adequate for the problem at hand on a sufficient scale and for sufficient time…”

  46. samgoody says:

    I only hope that a Recession today means a boom in the coming years.

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