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davelj
ParticipantDowntown is a disaster. I bought here in November ’06 in an odd deal, the details of which I won’t bore you with, that protects me from a peak-to-trough decline of 40%. And I’d like to buy another place down here as well, so I’m pleased with the direction and speed that prices are moving.
In my building there are two REOs and three or four short sales that haven’t sold yet. They are priced at 20%-30% below their last sales, depending on the unit. And they aren’t moving. This is happening in several other buildings as well. So, we’re going to see a dramatic drop in the comps over the next 6-9 months. I believe that in 2009 there will be many units available downtown for which the mortgage+taxes+HOA will be at or below comparable rental prices using conventional financing.
But as for right now, there ain’t no hurry. Just sit back and enjoy the show.
ParticipantDowntown is a disaster. I bought here in November ’06 in an odd deal, the details of which I won’t bore you with, that protects me from a peak-to-trough decline of 40%. And I’d like to buy another place down here as well, so I’m pleased with the direction and speed that prices are moving.
In my building there are two REOs and three or four short sales that haven’t sold yet. They are priced at 20%-30% below their last sales, depending on the unit. And they aren’t moving. This is happening in several other buildings as well. So, we’re going to see a dramatic drop in the comps over the next 6-9 months. I believe that in 2009 there will be many units available downtown for which the mortgage+taxes+HOA will be at or below comparable rental prices using conventional financing.
But as for right now, there ain’t no hurry. Just sit back and enjoy the show.
ParticipantDowntown is a disaster. I bought here in November ’06 in an odd deal, the details of which I won’t bore you with, that protects me from a peak-to-trough decline of 40%. And I’d like to buy another place down here as well, so I’m pleased with the direction and speed that prices are moving.
In my building there are two REOs and three or four short sales that haven’t sold yet. They are priced at 20%-30% below their last sales, depending on the unit. And they aren’t moving. This is happening in several other buildings as well. So, we’re going to see a dramatic drop in the comps over the next 6-9 months. I believe that in 2009 there will be many units available downtown for which the mortgage+taxes+HOA will be at or below comparable rental prices using conventional financing.
But as for right now, there ain’t no hurry. Just sit back and enjoy the show.
ParticipantThe vast majority of people won’t even notice a recession. The typical peak-to-trough decline in GDP is about 2%. A year-over-year decline of 3%-4% in traffic at a mall is a financial disaster because retail profit margins are extremely thin. A small change in traffic and spending is the difference between a profit and a loss for many stores. So unless you’re able to monitor changes in traffic/parking/spending using amazing powers of occular regression, you aren’t going to notice when the economy has turned south by spending time at a shopping mall. You might, however, get a feel for things by talking to the managers of the stores because they are seeing a daily P&L.
Yes, the malls are packed. Yes, we’re in a recession. There’s no mystery or contradiction here. It’s the economics of “the margin” which most people can’t grasp.
ParticipantThe vast majority of people won’t even notice a recession. The typical peak-to-trough decline in GDP is about 2%. A year-over-year decline of 3%-4% in traffic at a mall is a financial disaster because retail profit margins are extremely thin. A small change in traffic and spending is the difference between a profit and a loss for many stores. So unless you’re able to monitor changes in traffic/parking/spending using amazing powers of occular regression, you aren’t going to notice when the economy has turned south by spending time at a shopping mall. You might, however, get a feel for things by talking to the managers of the stores because they are seeing a daily P&L.
Yes, the malls are packed. Yes, we’re in a recession. There’s no mystery or contradiction here. It’s the economics of “the margin” which most people can’t grasp.
ParticipantThe vast majority of people won’t even notice a recession. The typical peak-to-trough decline in GDP is about 2%. A year-over-year decline of 3%-4% in traffic at a mall is a financial disaster because retail profit margins are extremely thin. A small change in traffic and spending is the difference between a profit and a loss for many stores. So unless you’re able to monitor changes in traffic/parking/spending using amazing powers of occular regression, you aren’t going to notice when the economy has turned south by spending time at a shopping mall. You might, however, get a feel for things by talking to the managers of the stores because they are seeing a daily P&L.
Yes, the malls are packed. Yes, we’re in a recession. There’s no mystery or contradiction here. It’s the economics of “the margin” which most people can’t grasp.
ParticipantThe vast majority of people won’t even notice a recession. The typical peak-to-trough decline in GDP is about 2%. A year-over-year decline of 3%-4% in traffic at a mall is a financial disaster because retail profit margins are extremely thin. A small change in traffic and spending is the difference between a profit and a loss for many stores. So unless you’re able to monitor changes in traffic/parking/spending using amazing powers of occular regression, you aren’t going to notice when the economy has turned south by spending time at a shopping mall. You might, however, get a feel for things by talking to the managers of the stores because they are seeing a daily P&L.
Yes, the malls are packed. Yes, we’re in a recession. There’s no mystery or contradiction here. It’s the economics of “the margin” which most people can’t grasp.
ParticipantThe vast majority of people won’t even notice a recession. The typical peak-to-trough decline in GDP is about 2%. A year-over-year decline of 3%-4% in traffic at a mall is a financial disaster because retail profit margins are extremely thin. A small change in traffic and spending is the difference between a profit and a loss for many stores. So unless you’re able to monitor changes in traffic/parking/spending using amazing powers of occular regression, you aren’t going to notice when the economy has turned south by spending time at a shopping mall. You might, however, get a feel for things by talking to the managers of the stores because they are seeing a daily P&L.
Yes, the malls are packed. Yes, we’re in a recession. There’s no mystery or contradiction here. It’s the economics of “the margin” which most people can’t grasp.
Participantkewp,
“Borrowing from the Fed to keep minimum reserves” doesn’t make any sense. Fed borrowings don’t count as Tier I or Tier II capital. And they have nothing to do with Loan Loss Reserves. Maybe you mean that banks are borrowing from the Fed to help maintain liquidity because the deposit market is very competitive? I don’t think this is necessarily a bad thing considering that the Fed Funds rate is below the rate being offered on most certificates of deposit these days.
“At what point do banks start to lose a significant % of deposits?” I don’t understand this question. All banks will move their deposit rates down, albeit to varying degrees. Where is a person going to go if they want an FDIC insured deposit? Are you suggesting that people will take their deposits out of banks due to the low rates and invest them in some other instrument with the same risk profile that’s got a higher yield? I’m curious as to what that instrument might be.
Participantkewp,
“Borrowing from the Fed to keep minimum reserves” doesn’t make any sense. Fed borrowings don’t count as Tier I or Tier II capital. And they have nothing to do with Loan Loss Reserves. Maybe you mean that banks are borrowing from the Fed to help maintain liquidity because the deposit market is very competitive? I don’t think this is necessarily a bad thing considering that the Fed Funds rate is below the rate being offered on most certificates of deposit these days.
“At what point do banks start to lose a significant % of deposits?” I don’t understand this question. All banks will move their deposit rates down, albeit to varying degrees. Where is a person going to go if they want an FDIC insured deposit? Are you suggesting that people will take their deposits out of banks due to the low rates and invest them in some other instrument with the same risk profile that’s got a higher yield? I’m curious as to what that instrument might be.
Participantkewp,
“Borrowing from the Fed to keep minimum reserves” doesn’t make any sense. Fed borrowings don’t count as Tier I or Tier II capital. And they have nothing to do with Loan Loss Reserves. Maybe you mean that banks are borrowing from the Fed to help maintain liquidity because the deposit market is very competitive? I don’t think this is necessarily a bad thing considering that the Fed Funds rate is below the rate being offered on most certificates of deposit these days.
“At what point do banks start to lose a significant % of deposits?” I don’t understand this question. All banks will move their deposit rates down, albeit to varying degrees. Where is a person going to go if they want an FDIC insured deposit? Are you suggesting that people will take their deposits out of banks due to the low rates and invest them in some other instrument with the same risk profile that’s got a higher yield? I’m curious as to what that instrument might be.
Participantkewp,
“Borrowing from the Fed to keep minimum reserves” doesn’t make any sense. Fed borrowings don’t count as Tier I or Tier II capital. And they have nothing to do with Loan Loss Reserves. Maybe you mean that banks are borrowing from the Fed to help maintain liquidity because the deposit market is very competitive? I don’t think this is necessarily a bad thing considering that the Fed Funds rate is below the rate being offered on most certificates of deposit these days.
“At what point do banks start to lose a significant % of deposits?” I don’t understand this question. All banks will move their deposit rates down, albeit to varying degrees. Where is a person going to go if they want an FDIC insured deposit? Are you suggesting that people will take their deposits out of banks due to the low rates and invest them in some other instrument with the same risk profile that’s got a higher yield? I’m curious as to what that instrument might be.
Participantkewp,
“Borrowing from the Fed to keep minimum reserves” doesn’t make any sense. Fed borrowings don’t count as Tier I or Tier II capital. And they have nothing to do with Loan Loss Reserves. Maybe you mean that banks are borrowing from the Fed to help maintain liquidity because the deposit market is very competitive? I don’t think this is necessarily a bad thing considering that the Fed Funds rate is below the rate being offered on most certificates of deposit these days.
“At what point do banks start to lose a significant % of deposits?” I don’t understand this question. All banks will move their deposit rates down, albeit to varying degrees. Where is a person going to go if they want an FDIC insured deposit? Are you suggesting that people will take their deposits out of banks due to the low rates and invest them in some other instrument with the same risk profile that’s got a higher yield? I’m curious as to what that instrument might be.
ParticipantWall Street to Uncle Ben:
“WHAAAAAAAA!! WHAAAAAAAAA!! BABY WANT MORE CAKE AND CANDY!! WHAAAAAAAAAAA!!”
But I repeat myself.
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