Comments on: Manhattan’s rent-vs-buy divergence http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: MathieuBCN http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-29409 Tue, 09 Aug 2011 01:42:39 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-29409 Actually seems kind of intuitive to me. The only people making any money in the current economy are bankers and brokers and of course they all want to live in Manhattan. As the recession continues and forces other folks to liquidate it simply opens up spaces for the long line of suits wanting to escape Connecticut and Long Island.

Mathieu
http://www.cocoonbarcelona.com/

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By: TFF http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-22609 Mon, 03 Jan 2011 02:43:58 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-22609 ErnieD, I repeat my question, “If everything is expensive, what is cheap?”

The previous bubbles were stoked by massive leverage. I’m not certain, but as best I can tell the current bubbles are inflated by “quantitative easing” funds. As long as that money stays in the system, the bubbles will remain inflated.

Am I missing something?

Won’t argue your conclusion, though. High-end Manhattan real estate could suffer in a variety of ways.

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By: ErnieD http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-22607 Mon, 03 Jan 2011 00:42:04 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-22607 I suspect that the high, Shiller PE, low bond yields, low Fed funds rate, and high commodity and gold (alternative currency, not commodity) prices indicate that this is nearly as good as it gets in the financial markets. Any sort of downturn could gain momentum into another crach, in which case we will likely see massive layoffs in the financial sector with many jobs taking a decade or more to return.

I suspect that this is NOT a good time to buy Manhattan real estate looking at a 5 to 10 year horizon.

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By: ARJTurgot2 http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-22605 Sun, 02 Jan 2011 17:42:26 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-22605 Shiller has the cyclically adjusted sp500 P/E at 22.7 for the end of year. 2011 will probably see some more climb, but unless earnings grow a lot more, it will be fantasy finance. It is fascinating how quickly we got back to this point, but we’re in something of an equity trap. Do you really want to be buying bonds, short or long, right now? Even with diddly for inflation, money market money is eroding month to month. Given all that, real estate price escalation is only marginally irrational.

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By: Commentasauris http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-22591 Sat, 01 Jan 2011 17:43:14 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-22591 I think the Manhattan real estate market is skewed by foreign high net worth investors.

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By: TFF http://blogs.reuters.com/felix-salmon/2010/12/30/manhattans-rent-vs-buy-divergence/comment-page-1/#comment-22527 Fri, 31 Dec 2010 00:21:46 +0000 http://blogs.reuters.com/felix-salmon/?p=6758#comment-22527 Shawn Tully put together an interesting piece here:
http://finance.fortune.cnn.com/2010/12/3 0/dont-believe-the-rosy-forecasts/

He affirms the same point you make. Bonds, stocks, and commodities are all looking pretty expensive right now. Real estate is also trading above its long-term trend. If all that is expensive, what is cheap? What is going *down* in price (at least relative to the others)?

As best I can figure out, the only thing that ISN’T costing more on a daily basis is labor. American wages are flat or down over the last three years. And, of course, wages (indirectly) make up a larger part of the CPI than commodities, so the formal measures of inflation aren’t screaming in pain yet.

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