Beige Book – NY/NJ Real Estate

From the Federal Reserve:

Beige Book – Second District–New York

The Second District’s economy has shown more signs of stabilizing in recent weeks, though, on balance, economic activity may still be contracting. The labor market remains exceptionally weak but with some signs of leveling off. Manufacturing sector contacts report stable conditions and are generally optimistic about the near–term outlook. Retailers indicate that sales were steady in June and early July while continuing to run well below 2008 levels. Consumer confidence was mixed but generally steady at a low level in June. Tourism activity in New York City has also been sluggish but little changed since the last report, as have been commercial real estate markets. Housing markets have shown some signs of stabilizing in northern New Jersey and upstate New York but continued to deteriorate in New York City and especially in Manhattan. Finally, bankers report a downturn in loan demand-particularly from the household sector-as well as ongoing tightening in credit standards and steady to higher delinquency rates.

Construction and Real Estate

Housing markets remained soft throughout most of the District, though there were signs of stabilization in a number of areas. Contacts in northern New Jersey indicate that the market has a somewhat more positive tone than in recent months: prices, though still down about 15 percent over the year, appear to have stabilized somewhat and volume has picked up moderately. There is still reported to be a moderate degree of new development of multi-family buildings along the Hudson waterfront, but otherwise new construction activity is described as moribund. New construction in the Buffalo-Niagara Falls area was reported to be exceptionally slow in April and May but picked up in June; while the high end of the market has weakened somewhat, sales activity at the low end ($150,000 and under) has reportedly been fairly brisk, with multiple bids, sometimes above the asking price. This strength was largely attributed to the $8,000 tax credit for first-time homebuyers. Overall, home prices have held relatively steady in western New York State.

New York City’s market, however, has shown further signs of deteriorating, in both the sales and rental markets. In the second quarter, the median sales price for existing co-ops and condos in Manhattan reportedly fell 26 percent from a year earlier, while the number of sales transactions fell 50 percent; the inventory (number of units listed) was up 9%, though there is reported to be a substantial “shadow” inventory of new apartments-condo units that are unsold but not yet listed. Brooklyn’s and Queens’ markets have also slackened in the second quarter, with median prices of existing apartments reported to be down 15 to 17 percent from a year earlier, and the number of transactions down roughly 30 percent. The city’s rental market has also slackened further, with asking rents reported to be down 8-12 percent over the past year, and actual rents off more than 17 percent, on a per square foot basis. Also, landlords are increasingly offering concessions-free rent for one or more months–in slack neighborhoods.

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70 Responses to Beige Book – NY/NJ Real Estate

  1. GerryAdams says:


  2. safeashouses says:

    How can NYC be down 26%? What happened to that river of wealth?

  3. grim says:

    From the AP:

    Frank threatens banks to stop foreclosures
    A senior House Democrat threatened banks Wednesday that if they don’t volunteer to save more homeowners from foreclosure, Congress will make them.

    In a sternly worded statement, Rep. Barney Frank said Congress will revive legislation that would let bankruptcy judges write down a person’s monthly mortgage payment if the number of loan modifications remain low.

    Frank, chairman of the House Financial Services Committee, also said his committee won’t consider legislation to help banks lend unless there is a “significant increase” in mortgage modifications.

  4. grim says:

    A sternly worded letter?

    Oh yeah, that’ll do it.

  5. SG says:

    Option ARM Loan Modification Outlook Dismal

    New Barclays Capital research from Sandeep Bordia and colleagues shows that the recasts in the next year or so are expected to be a minor event. But by mid-2011, these borrowers are forecast to see payments that are 50% to 80% higher than what they are grappling with now. (Many of these option ARMS are concentrated in former hot-spot real estate markets, such as California and Florida.)

    Modification don’t seem to be working with these particularly noxious loans. In the face rising payments, borrowers don’t have an incentive to keep up with their current payments for homes that are already so horrendously under water, i.e. the loan amount is far above the current value of the property. Bordia says that many of the option ARM loans that do get modified turn delinquent soon after anyway. They’ve crunched some numbers and forecast that 95% of the loans that are slated for modification will eventually default. If you think that sounds bad, get this: They say that 80% of the option ARM loans out there that are ok and up-to-date as of right now will eventually default, too.

  6. NJGator says:

    Barbara prev 284 – Stu used to say that the Montclair EOF kids all would never use their book stipends to buy their own books. They would use their stipend to buy books for other students, charge them 50% of cost and pocket the cash.

  7. yo'me says:

    #293 from prev
    Federal judges? Kiss this market goodbye. Not only will investment capital flee this industry, it will flee the country. Going forward, watch the TIC Data. In addition to this, keep track of how much your dollar buys. Then, bend over and kiss your ass goodbye

    Smock it!

  8. yo'me says:

    “Will this expansion of credit and bank reserves create high inflation? My answer is no,” she said.

    Core inflation, stripped of food and energy price rises, will likely remain below 2 percent for several more years, Yellen added.

    “Monetary policy fosters inflation when it loosens the stance of policy enough to create excess demand for goods and services. Right now, we have exactly the opposite.”

    The United States needs “more demand — not less — to offset slack in labor and product markets,” Yellen added.

    Fed watchers recently have noted that the “velocity” or circulation of money in the U.S. economy has not risen despite the billions of dollars it has pumped in.

    Yellen said that trend was not especially surprising since banks are keen to hold onto reserves to guard against fresh shocks to the financial system or the economy.

    Similarly, large budget deficits by themselves “do not cause high inflation automatically,” the policy-maker said.

  9. safeashouses says:

    Should fattening foods be taxed?

    I actually think fast and junk foods should be taxed, with the proceeds going to healthcare reform.

    I doubt the idea to create a program for low income people to buy fruits and vegtables would work. I see lots of junk food and heavily processed foods in shopping carts of morbidly obese people, few to none fruits and vegs.

  10. yo'me says:

    Anyone looking for the economy to “recover” is going to be disappointed, according to Robert Reich. The problem is that the old economy was built on sand–rising spending, falling wages, mounting debt, housing bubble–and it’s gone forever. If we are ever going to see prosperity again, it will have to be because we build it on a new basis

    This is our only choice now.Easy credit is gone.

  11. grim says:

    I actually think fast and junk foods should be taxed, with the proceeds going to healthcare reform.

    Agree, a great idea. Would like to see a tax on high sugar content beverages similar to that of alcohol.

  12. #12 – safe – Sin taxes? I hate to use a term like ‘slippery slope’, but giving this sort of coercive power to the state makes me very nervous.

  13. yo'me says:

    Greenlight hedge fund head David Einhorn is selling his fund’s nearly $390 million in gold shares and buying physical gold instead, Hard Assets Investor reports.

    “After extensive investigation we switched our entire GLD exchange-traded fund position into physical gold,” Einhorn wrote in a note to investors.

    I always thought GLD had no real metal to back the their position.

  14. BC Bob says:


    Which is the reason that this is not your normal recession. It’s the beginning of a depression. Hey, we have already experienced a bigger bank run than the 30’s, shadow banking.

    This is not a slowdown in a healthy economy nor is it a slowdown due to inventory adjustments. A total restructuiring is required. The old, sham economy is dead. Welcome to the new show.

  15. BC Bob says:

    “I always thought GLD had no real metal to back the their position.”


    You, along with many others. One day, the pillars of the Comex will come tumbling down.

  16. grim says:

    Sin taxes? I hate to use a term like ’slippery slope’, but giving this sort of coercive power to the state makes me very nervous.

    Not necessarily a sin tax, as I see it, but a way to encourage healthier choices. After all, if we’re talking about social health care, we’re all going to be paying for our own care, right? Isn’t a healthier lifestyle in our own best interest anyway? Both from a cost perspective and a quality of life one?

    What is the alternative? Higher health insurance premiums for those who live unhealthy lifestyles? Or worse, denial of coverage? We’re going to get taxed, why not chose the tax that results in a healthier lifestyle?

    We could look at it from a credit standpoint.. How about tax credits for those who maintain a healthy lifestyle (how the hell do you quantify this one, it’ll be worse than Rube Goldberg clunkers program)?

  17. yo'me says:

    JACKSON, Miss. — Two dueling Chinese businessmen have settled a federal lawsuit over a proposed $6.5 billion car plant in Mississippi, with both sides saying they can pursue the massive project on their own.

    An attorney said a company owned by one of the men will unveil four prototypes in August and break ground on the plant this fall. He said the company already has a site plan ready.

    “Our project is the original project that is going to go forward under a new name,” said Bill Brabec, an attorney for Xiaolin “Charles” Wang. “Getting rid of this litigation was pivotal to getting this project going again.”

    Here comes the chinese cars

  18. yo'me says:

    The plan before Yeung and Wang split was to raise some money through a visa program that provides foreign investors “with both a great investment opportunity and a possibility of becoming a U.S. resident,” according to Hybrid Automotive’s Web site. The Web site will be shut down in August as part of the settlement agreement in the lawsuit. Other terms of the settlement were not disclosed.

    Promising foreign investors for a permanent residence in the US.Can they really do that?

  19. BC Bob says:

    26% decline in NYC? In conjunction with this, substantial shadow inventory? Hard to believe, the experts told us this would never happen. Isn’t NY a sea of wealth, the magnet that draws the highly educated? Yet, I’m delusional.

    Yes, the great unwind continues. Like I’ve stated previously, this bust will go much longer and the declines will be much greater that most can even begin to imagine. By the time the majority gets it, they will be capitulating while the NJ Vulture Fund will be shopping for new boots.

    We are approaching the 13th mile of a 26 mile marathon. We haven’t even approached Heartbreak Hill, The Pru is nowhere to be found[Nom understands]. Hope the bulls still have their legs under them.

  20. BC Bob says:

    than most can imagine.

  21. What is the alternative?
    I honestly can’t think of anything unfortunately.
    We could look at it from a credit standpoint..
    That’s a good idea. I could sell my skinny credits or at least not get hammered so bad in April.

    I have a previous comment in moderation. Not sure what triggered it, my love of Citroens?

  22. yo'me says:

    Call it a sign of desperate times: Legislators are considering selling the House and Senate buildings where they’ve conducted state business for more than 50 years.

    Dozens of other state properties also may be sold as the state government faces its worst financial crisis in a generation, if not ever. The plan isn’t to liquidate state assets, though

  23. d2b says:

    Great! We tax crappy foods and everybody starts to eat better. We’ll go broke because everybody will live to be 100.

    I say we tax vegetables…

  24. grim says:

    That’s a good idea. I could sell my skinny credits or at least not get hammered so bad in April.

    I like it! Model it after the carbon trading model.

    When skinny credits are selling for $15/per, I’ll go out for a 100 mile bike ride to raise some extra spending cash.

    Won’t pity the fool paying 19 dollars for that cheeseburger.

    But I wonder if I’ll have to hedge against getting hit by a car. Will I need to pay an “unsafe activity” tax?

    Ah damn, I guess I’ll see you later Tosh, at the government sponsored healthful activity center where we can participate in mass group calisthenics. I hear we’re doing the Chariots of Fire routine tonight, can’t wait, my favorite. I call dibs on the ribbon.

  25. House Whine says:

    A healthy diet is just a part of being healthy. People have to get up and move their bodies! It’s hard to do since a lot of us have sedentary jobs but you have to try to find ways to be active. I know people in their 40’s who won’t even walk up two flights of stairs at work. They take the elevator all the time.

  26. #28 – I hear we’re doing the Chariots of Fire routine tonight

    Alright, I’m sold. Wheat grass for all, Doritos for none!

  27. Sean says:

    CNBC has to be hurting they are running ads for Female Pattern baldness during Kudlow’s show.

  28. zieba says:


    This must’ve been written by the same guy who spotted Wall Street types rowing on the river in Rutherford.

    PS- skip the scrolling by replacing the page # in the link to 37

  29. BC Bob says:


    No Capital One; “What’s in your wallet”?

  30. yo'me says:

    NEW YORK (Reuters) — American Express Co. paid the U.S. Treasury Department $340 million Wednesday to redeem warrants to buy its stock, allowing it to fully escape the government’s bank bailout program
    It said the cost of buying back the government’s warrants to buy 24.3 million shares, together with the $74.4 million of dividend payments it made on the preferred shares, gave the government an annualized 26% return on its investment

  31. yo'me says:

    Foreign cash for U.S. jobs
    The little-known EB-5 visa program offers international investors a deal: Put up $500,000 for a project that creates 10 jobs and get a green card in return. Here’s a look 5 projects funded through the program.

  32. yikes says:

    catching up on earlier chatter about “time to buy” …

    wife and I bought in Bucks County earlier this year after waiting and researching and saving up.

    we HATE moving. i think i counted something absurd like 10 moves in 13 years. moving is very stressful.

    we waited it out as long as possible and as soon as we had enough to put down 35% (and have 6 months living expenses leftover), we found a house we really liked and pulled the trigger. luckily, house didn’t need much work (maybe 11k in carpets, painting, odds and ends).

    i concur with some folks talking about ‘moving on’ with a purchase. we found a place we want to be for 30 years, and it was sort of a destination. we were not just going to buy something as a stopgap for 8 yrs and then upgrade. we feel that step is a bad one (anyone who bought from 03-07 prob agrees).

    obvs it’s all still a case-by-case situation.

  33. Cindy says:

    Sean @ 31 –

    On this list, New Jersey is #7 at 55.46%

    Oregon#1 at 57.54%

  34. Pol Clot says:

    safe (12)-

    I think we should execute the obese.

    Much cheaper and efficient.

  35. Pol Clot says:

    grim (19)-

    I’m thinking of taking up cigarettes. Other whiskey drinkers tell me they’re a natch.

  36. Cindy says:

    I see you are logged on Clot. Thought I would post this for you – some light reading from The Economist’s View.

    “How Wars, Plagues, and Urban disease Propelled Europe’s Rise to Riches”

  37. BC Bob says:

    Any reported Mudslides in C Park? There may be some hope for Du*k?

  38. Pol Clot says:

    oops, 43 moderated

  39. Pol Clot says:

    BC (34)-

    Is it true Kudlow’s taken to snorting lines while the cameras are rolling?

  40. Pol Clot says:

    Cindy (41)

    You really know what gets me going…one man’s bubonic plague is another man’s ticket to riches.


  41. Cindy says:

    #46 – Oh Yeah Clot – Apparently, all we need is a nice plague – 1348-1350 style…. Wiped out 1/3 to 1/2 of Europe – easy. There ya go. Riches all around…for anyone who’s left that is.

  42. grim says:

    Can we exchange inner city murders for the plague?

    If so, I’d posit that Camden is prime.

  43. BC Bob says:


    Our only escape from the Great D was a world war.

  44. grim says:

    Speaking of..

    From the Philly Inquirer:

    Ugly-house contest aims to draw attention to Camden’s vacant-property problem

    It was built by one of South Jersey’s founding families and once served as a station on the Underground Railroad. Nowadays the large, brick colonial at 22nd Street and Wayne Avenue in Camden’s Cramer Hill section is just plain ugly, a local church group says.

    But just how ugly is the vacant, 210-year-old Samuel Cooper house, compared to the thousands of other abandoned homes in Camden?

    Cooper’s house is among 13 of Cramer Hill’s most burned, battered and broken-down homes designated by the Camden Churches Organized for People to compete in the first Cramer Hill Ugly Home Contest, which will culminate next month when votes are tallied.

    Brother Jerry Hudson, of St. Anthony of Padua Church in Cramer Hill, said no one was aware of the Cooper home’s historical significance.

    “We just drove around and took pictures of houses that looked bad or close to falling down,” he said.

    Camden has thousands of vacant properties, and, like Cooper’s house, many are boarded up by the Public Works Department and slated for eventual demolition.

    From the Courier Post:

    Ugliest-home contest focuses on city eyesores

    That’s been a perennial issue for the impoverished city. Stephen Singer, executive director of CAMConnect, estimated that the city has between 4,000 and 8,000 abandoned homes.

    Cramer Hill is home to 195 of those buildings, according to surveys done for a neighborhood plan that was released this spring.

    Church leaders said Hurlburt’s home has been vandalized at least three times and become a hangout for drug addicts since he died about three years ago. They’ve cleaned the property four times since then and say they’ve found a contractor willing to tear down the building for free. But they can’t do that unless they officially acquire the property, which would require paying off $25,000 worth of liens.

  45. Pol Clot says:

    grim (48)-

    I think all we’d need to do is set a couple of infected monkeys loose in Camden, and we could start an Ebola outbreak.

  46. Pol Clot says:

    Cindy (47)-

    1348. That’s when men were men.

  47. lostinny says:

    Clot 46 and Cindy 47 (Hi Cindy!)
    Too bad the Swine Flu isn’t doing its job.

  48. Cindy says:

    53 – Lost – you’ve been lost. Hi there. Oh yeah – the swine flu….no, they are planning a vaccine and all. I think BC has it @49. We best be on the look out for a WW.

  49. Pol Clot says:

    I seem to remember hearing that swine flu can kill an obese person. Could be some added value here.

  50. Pol Clot says:

    BTW, I got sick in late May, and my doctor told me I probably had swine flu.

  51. gary says:

    Booze and cigs are a great way to lose weight, I highly recommend it!

  52. Cindy says:

    Some sort of flap over Wiki posting these Rorschach plates….

    (The ten inkblots are at the bottom of the page)

    Some saying it is kin to posting the answers to an SAT test…

    Quick – Look at the “most commonly answered” notations before they pull it from the net. One never knows when they might be dragged into the looney bin.

  53. Cindy says:

    IHT – “A Rorschach Cheat Sheet on Wikipedia?”

  54. Cindy says:

    Sorry – Grim – I am soooo off task….

  55. Barbara says:

    I thought the Rorschach test went the way of the Etsel and the Quonset Hut.
    Do professionals still use these?

  56. stan says:

    That snook pulling the Frankie Five angels in Jersey city last night is interesting.

    I have a feeling that the FBI/ US attorney general and their indictments have put a lot of pressure on the state and local keystone cops. We may see some action from our toothless state AG. Until she gets canned by christie.

  57. stan says:

    Clot, I saw that readington wants to borrow money to preserve farmland.

    I was out on 523 the other day and I don’t understand wtf is going on. They buy the land, ‘preserve’ it, put up a sign saying they preserved it and let it turn to overgrown grass???

    At least lease it for what the taxes should be or 100 bucks or whatever and let someone grow something. Help me understand here.


  58. Barbara says:

    “overgrown grass” is what happens in nature. Opened space is just that, natural. Only in NJ does is appear unusual.

  59. stan says:

    Big difference between preserved farmland and open space. If its open space or a nature preserve, make it one. If the idea is to preserve farmland, I see no corn no horsies, nor buffalo.

  60. DL says:

    Hey, wait a minute, I’m from Camden.

    Yikes; we’ll be touring Montgomery and Bucks county in Oct trying to nail down a town where we might want ot live. Do you have any recommendations? Wife doesn’t drive so a walkable town center is a plus. We’ve been to Newtown and Doylestown. Was curious if there are any hidden gems. Chalfont? Ambler? Lansdale? Yardley? Grateful for any observations.

  61. fvspvj says:


  62. xkasrg says:


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