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Start Spreading the News, They’re Leaving Today… I have been engaged in conversations with a variety of people very familiar with the New York metropolitan real estate market and they’re worried. Rightfully so, it seems as New York and the surrounding employment corridors are about to make history again, this time for job loss. Our estimates for the Manhattan-Northern New Jersey-Connecticut region show a loss of over 155,000 jobs, and for the first time, a very probable spike in apartment vacancies. The unemployment rate will probably vacillate between 5.8% and 6.8% (you know I think the household survey is inaccurate,…

I Love the Smell of Cactus in the Morning In what can only be described as an economic calamity meets public policy overload, today we travel to sunny Phoenix, where the cactus is in bloom, the temperature is a very modest 86 degrees and lots of apartments are empty. If you listen closely, you can hear the sounds of cars leaving Phoenix and not coming back. Phoenix, once the dominant poster child for institutional investment has achieved some level of notoriety lately since the city government, in their infinite wisdom passed a law suggesting that it was unlawful to hire…

The markets have whipsawed over the past weeks, with the Dow index seeing its  worst stretch ever–an eight-day plummet of 2,400 points which wiped out some $2.4 trillion in market value–only to be followed by a record gain of 936 points. Recent days, though, have seen a stepping up of efforts around the world to deal with the financial crisis. Some details of the government’s $700 billion financial rescue program have now been revealed, and the government announced plans to invest some $250 million into preferred stock equity positions in a number of banks. Across the Atlantic, 15 European nations…

By Keat Foong It was certainly hair-raising to watch the stock market in the past week. By Friday, the Dow Jones industrial average had fallen from 9,955.50 on Monday to 8,451.19 points—a drop that was reportedly even worse percentage-wise than the 17 percent plunge in the week ending July 22, 1933. Part of the current panic has to do with the suspended financing markets—which one would think at its worse can lead to economic collapse. In this regard, the Treasury’s announcement this week of the plan to inject $250 billion into banks, guarantee inter-bank lending and backstop the commercial paper…

With the current press coverage of the $700 billion taxpayer financed bailout firmly taking hold in the minds of most owners and developers, we’re now facing a very unique situation. Typically, in most economies, the Fed takes the lead. With the capacity to move markets, the Fed actually only has two primary responsibilites: set the short term rates most typically affecting interbank transactions and second and most importantly, manage expectations on Wall Street. One of the most disturbing aspects of our current monetary policy now unfolding in a market near you, is that Bernanke has essentially been made ineffective, losing…

As the national housing market continues to slow down, a number of condo projects in major cities are being reborn as luxury apartment developments. Take, for example, Chicago. The overall housing market in Chicago hasn’t suffered the big dips areas like California and Miami have seen. While the single-family market has tanked in parts of California, and overall U.S. single-family home prices fell a record 16.35 percent in July compared to 2007 levels, according to the Standard & Poor’s/Case-Shiller Home Price Indices, Chicago prices only fell 10 percent. However, credit is still hard to come by pretty much everywhere in…

Last week, sales began at the first green development in New York City’s Murray Hill neighborhood. The 128-unit project, being built by Toll Brothers Inc. and The Kibel Companies, has been designed for LEED certification and features water-saving fixtures, bike storage and reduced parking rates for residents with energy-efficient or hybrid cars. Construction is expected to be complete in the summer of 2009, by which time New York will be just six years away from its big greenhouse gas emission reduction goal—and likely even more invested in green building. The Big Apple isn’t alone in its sustainable thinking. Across the…

A $700 Billion Mistake? Some of the smartest guys I know, economists, CEOs and even housing advocates from sectors usually ignored in the mainstream media are all starting to come to a conclusion that I think may be prescient. The federally managed $700 billion, tax payer financed proposal should fail in Congress. While there is a likelihood it will pass, the more conventional, non-hysterical wisdom is this: The president is not understanding our present economic situation and is getting bad advice from the Council of Economic Advisors and even worse advice from Benny Bernanke. The ability of the new funding…

By Keat Foong, Executive Editor We are going from crisis to crisis. The House voted down the $700 billion bailout plan, and the Dow Jones Industrials plunged by 777.68, or nearly 8 percent—its worst drop in two decades. In the immediate aftermath, it looks as though banks’ short term  interest rates are spiking. That means higher benchmark for short-term, LIBOR-based multifamily borrowing. On the positive side, Treasury yields have fallen further. This is a plus for longer-term, fixed-rate loans, provided spreads do not widen further—which is a big if. If the bailout plan should eventually pass, that should have a…