tag:blogger.com,1999:blog-1541468051247516447.post1090795494619359005..comments2024-02-19T05:18:27.849-05:00Comments on <center>the Q at Parkside</center>: Beginning to UnderstandClarkson FlatBedhttp://www.blogger.com/profile/13463744536115119388noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-1541468051247516447.post-3776721532358049072014-07-17T22:25:00.573-04:002014-07-17T22:25:00.573-04:00wall street, government. government, wall street. ...wall street, government. government, wall street. same thing. for once, slappz, i agree with you. Clarkson FlatBedhttps://www.blogger.com/profile/13463744536115119388noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-29879245635565577022014-07-17T22:15:04.250-04:002014-07-17T22:15:04.250-04:00Clarkson, babs, diak, yes indeed, Congress mandate...Clarkson, babs, diak, yes indeed, Congress mandated it. Mortgages for everyone. No questions asked. <br /><br />In theory, the house was the collateral, and it was expected to maintain enough value to insulate the lenders against ruinous losses.<br /><br />Well, that didn't work. It didn't take long for people to realize that a no-money-down mortgage, or a low-low-low-downpayment, meant that buyers weren't risking anything.<br /><br />For someone who put no money into his house, he faced no loss if the value declined and he sent the keys back to the bank, understanding that it was the bank's problem, not his.<br /><br />Meanwhile, Sub-Prime Mortgage Loans have been around for many decades. However, the finance companies that were successful lenders in that category demanded huge down-payments from borrowers. Often 40 percent.<br /><br />Greenpoint Bank -- here in NY City and elsewhere -- was a big player in that market for decades. There was also Beneficial Finance and Home Finance, two firms that offered home equity loans. <br /><br />But the lending market fell apart when Congress took steps to make it possible -- easy -- for people highly likely to default to obtain mortgages.<br /><br />Yeah, the individual has to watch out for himself. But foolish lending rules are obvious. But Congress couldn't stop itself from enacting foolish legislation.<br /><br />Who cares how much was spent lobbying Congress? If Congress were looking out for consumers, Congress would have said NO to the insanely lax lending standards that came out of the Community Reinvestment Act of 1978 and a series of legislative changes in subsequent years.<br /><br />No, Wall Street wasn't hookwinked. The taxpayers were. That's what happens when Congress enacts laws that obligate the taxpayers to cover bad debts created by destructive legislation.<br /><br />Once again, if all homebuyers were required to hand over a down-payment of at least 10 percent, there have been no financial crisis.<br /><br />What does it take to rent or buy a place today? For renting? An annual income of 40 times the monthly nut. For buying? A big down-payment. <br /><br />In other words, somebody woke up to the risk of handing bushels of cash to people unlikely to spend it wisely and who aren't required to indemnify the lenders -- because the government is backstopping everything.<br /><br />Congress set the rules. You can argue that Wall Street pushed for the rules, but the votes approving the legislation were cast by the members of Congress.<br /><br />It was the government that touted the benefits of home-ownership. The real estate industry always blows its own horn. Banks are in the lending business.<br /><br />But the government gave its stamp of approval. That was the problem.no_slappzhttps://www.blogger.com/profile/04207475509053402475noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-82949870040497182014-07-17T12:51:30.384-04:002014-07-17T12:51:30.384-04:00I lived in a Pinnacle-managed building in Park Slo...I lived in a Pinnacle-managed building in Park Slope many years ago. The memories still make me shudder. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-44200977959363222312014-07-16T16:07:30.359-04:002014-07-16T16:07:30.359-04:00It might be hard to argue with no_slappz that dere...It might be hard to argue with no_slappz that deregulation by Congress led us down the toilet. But "Wall Street merely works with the hand it's dealt"? They just sat back and when any and all manner of financial sleight-of-hand was forced on them they sucked it up and tried their best to get creative to keep their companies afloat? That's simply not reality as most in banking will readily admit.<br />The financial industry's massive lobbying effort coupled with enormous contributions to legislative campaigns and PACs lit the fire under Congress's butt. Wall Street got the rules rewritten the way they wanted—usually in the most opaque ways possible—and then went to work cashing in.diakhttps://www.blogger.com/profile/01160226342863738763noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-1761702397509231152014-07-16T12:44:57.905-04:002014-07-16T12:44:57.905-04:00Must...not...feed...the...trolls.
The idea of &qu...Must...not...feed...the...trolls.<br /><br />The idea of "Predatory Borrowers" is as ridiculous as all those "Welfare Queens" out there living in the lap of luxury on their Food Stamps and Section 8 housing vouchers.<br />babshttps://www.blogger.com/profile/08365488181982105888noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-7601215152043308622014-07-15T21:42:58.789-04:002014-07-15T21:42:58.789-04:00Sob...sniffle...poor Wall Street. Once again hoodw...Sob...sniffle...poor Wall Street. Once again hoodwinked by those crafty predatory borrowers.<br /><br />Yes, Slappz, it's the job of the borrower to know what's good for him. After being sold a lot of horse puckey about the limitless potential of real estate, it really was the fault of the small investor or eager home-buyer for not understanding that overextended borrowing (outsized leverage) should be left to the experts (Banks and Wall Street), who would NEVER in a million years make a bet that wasn't safe.<br /><br />The "predatory" borrowers were working in thousands. Wall Street in billions. The folks selling sham equities knew better. Blaming the victim is so easy, isn't it? "She was ASKING for it..."<br /><br />Clarkson FlatBedhttps://www.blogger.com/profile/13463744536115119388noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-26976912071520396402014-07-15T19:19:39.890-04:002014-07-15T19:19:39.890-04:00Clarkson, it looks as though you're learning a...Clarkson, it looks as though you're learning about finance and leverage. <br /><br />Why do property owners leverage up the way they do? Because the supply of real estate is limited. Moreover, even if de Blasio becomes the king of new construction, rubber-stamping every project that needs his signature, supply will lag demand. <br /><br />Rent stabilization ensures a permanent shortage of available apartments. There are One Million rent stabilized apartments in the city. Thus, a lot of people will stay put till they die, and given the lax succession rights of rent stabilized tenants, their children may suddenly move home to take over the leases.<br /><br />It's been stated that about 90% of the apartments in PLG are rent stabilized. Thus, to accommodate its share of the city's growth, either new buildings go up, or stabilized tenants are urged to move.<br /><br />Why do property owners refinance their properties? When interest rates are dropping, as they did for the last several years, the value of properties rises. The Fed has driven rates to historic lows, which has been a boon to anyone holding a rate-sensitive asset. Real estate.<br /><br />What are they doing with the money? Most likely buying more property, or, as you suggested, making some improvements in existing buildings.<br /><br />On the other hand, our new Fed chief, Ms Yellen, who's from Brooklyn, has stated the Fed will stop (maybe only cut back) its bond-buying program by October. That suggests we're in for higher interest rates.<br /><br />How much higher? Impossible to say. Ideally she'll guide the Fed in a way that will allow rates to rise enough to help savers a little and not hurt borrowers too much.<br /><br />But a shift in policy that implies higher rates does suggest we're close to a near-term peak in real estate valuations. However, the limited supply of NY City real estate suggests that somewhat higher rates won't stop the rise of prices, or rents.<br /><br />A little slowing, perhaps, but not a full stop.<br /><br />As for the securities involved, well, news flash, it was NOT mortgage-backed securities that led to the big trouble of several years ago. <br /><br />The problem was the borrowers themselves. Credit standards were loosened and it was possible for someone with a lousy credit score, crummy job prospects and NO money for a down-payment to buy a house. Congress, by allowing speculators (that's what you are when you buy something without putting your own cash into it) to rampage through the housing market, was responsible for the debacle.<br /><br />If all borrowers had been required to cough up at least 10% of the purchase price, there would have been no credit crisis.<br /><br />Wall Street merely works with the hand it's dealt, and in this case, Congress distributed a deck of wild-cards. One of the most egregious was the way it lowered credit standards for mortgages purchased by Fannie Mae and Freddie Mac. <br /><br />We got hammered by Predatory Borrowers. The lenders played by the crazy rules. <br /><br />So once again, I say let there be development of Floyd Bennett Field. It's big enough to accommodate many thousands of apartments in uncramped style.<br />no_slappzhttps://www.blogger.com/profile/04207475509053402475noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-58314120406204750672014-07-14T12:55:36.503-04:002014-07-14T12:55:36.503-04:00We're talking about the Pinnacle Group here (h...We're talking about the Pinnacle Group here (http://www.pinnaclemanagementcompany.com/) - I've never heard of Pinnacle Realty, and from the looks of the people who work there they are definitely not related. Note that there's also a plain old Pinnacle Management company that provides business services and also has nothing to do with the types. babshttps://www.blogger.com/profile/08365488181982105888noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-27984378903113900102014-07-14T12:09:31.716-04:002014-07-14T12:09:31.716-04:00Just so we know who's who while we try to figu...Just so we know who's who while we try to figure out what's what, I did a little googling I found that in NYC there is a Pinnacle Realty who are brokers, and a Pinnacle Management Co. From their websites, it doesn't appear that they share anything but a name. Anyone know differently? Babs?<br /><br />It would seem that Pinnacle Management is the culprit here. The mission statement on their website —especially the "commitment to tenants" paragraph — is particularly ironic in light of Mr CF's piece.<br />www.pinnaclemanagementcompany.com<br />diakhttps://www.blogger.com/profile/01160226342863738763noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-81189237536473814412014-07-14T09:26:57.945-04:002014-07-14T09:26:57.945-04:00Thanks for the perspective Daniel.
I should quali...Thanks for the perspective Daniel.<br /><br />I should qualify every post like this one. I recognize as much as anyone the need and inevitability of change. I do want people to recognize however that change is not just a natural progression. In many ways, it's manufactured and engineered to maximize profits. Same as it ever was. It's not like the people living here now don't appreciate the Park and the commutes. Many are being written out of the neighborhood's diversity systematically and often illegally. Read the NY Times and you'd think it's all for the best. No offense to anyone intended. But I think it's worth noting how one-sided the information flow happens.Clarkson FlatBedhttps://www.blogger.com/profile/13463744536115119388noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-2340697615264862292014-07-14T07:52:07.314-04:002014-07-14T07:52:07.314-04:00So dirty and sad. The amount of debt associated wi...So dirty and sad. The amount of debt associated with 225 parkside is shocking. That building looks like a pit of despair from the outside and seems like it needs "cleaning up" in certain ways, but I am sure that productive, honest folks will get caught in the crossfire.<br /><br />Overall, price increases around here are really freaky and I hope that they stabilize soon. Seriously doubt that they would go down much even if the bubble bursts - they didn't in 2009 - or if they did, it was for a few months only, 10 years ago prices were so low, but I think that's because people outside the neighborhood literally did not even know it was here. Friends of mine who lived at the 7th ave stop in 2004/05/06 barely thought twice about whether subway stops after theirs existed. Lefferts was late to be "discovered," and now that it has been I think somewhat affordable prices are gone for good.Alexhttps://www.blogger.com/profile/00792646871333738725noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-7807823143439950642014-07-14T07:21:03.862-04:002014-07-14T07:21:03.862-04:00Is there any hope that this bubble is going to bur...Is there any hope that this bubble is going to burst? My wife and I moved here because we were looking for an affordable place in a decent neighborhood, and we found it. But I guess we got here just at the right time because if we were looking for it now, we wouldn't find it here. We love the neighborhood and we'd like to stay here and maybe buy a place eventually. But the prices are going up faster than our income, and faster than we can save. Seanhttps://www.blogger.com/profile/13728153813656669053noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-40440551349209408442014-07-14T00:06:25.066-04:002014-07-14T00:06:25.066-04:00You don't know the half of it - Pinnacle is li...You don't know the half of it - Pinnacle is linked in with so many other companies, and they trade properties like diamond dealers trade stones.<br /><br />Let's talk about 35-41 Clarkson Ave. Do you know who owned those buildings in 2008? A Pinnacle-controlled LLC which sold it to a related company (also an LLC) for $3.5 million and then the warehousing began.<br /><br />What do we have now? Ta da! Condos!<br /><br />Follow the money and it's all not going too far from the source.babshttps://www.blogger.com/profile/08365488181982105888noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-24178779925959782202014-07-13T21:32:35.172-04:002014-07-13T21:32:35.172-04:00I was expecting the 'change' to happen abo...I was expecting the 'change' to happen about three years ago, but then 2008 happened and it slowed things down a bit. I'm no Nostradamus, I just saw the same thing happen in the East Village, and Williamsburg, and then the Lower East Side. It happened in Ft. Greene and DUMBO too, I just didn't observe those transformations. It's not rocket science, just look at subway travel times to midtown and downtown and identify the next stop out that hasn't had the tsunami hit yet.<br /><br />The population of the city is growing, but we're not building subways nor light rail nor nearly enough housing so the income requirements to live 20, 30, 40 minutes from work will continue to increase. And the march happens neighborhood by neighborhood because this allows the real estate market to work efficiently.<br /><br />Our neighborhood will change more than most people thought five years ago, but less than most people fear. But I don't think we will turn into Park Slope or the East Village. Part of that is hope of course, but we also have a huge historic district and very low turnover throughout the neighborhood. <br /><br />There can also be positives. Rogers Ave was a thriving commercial strip 50 years ago. It can be again if some of those businesses priced off Flatbush Ave move there. Especially with SBS restoring some of the mobility that used to exist on Rogers Ave before we tore out the trolley tracks and turned that street into a highway.Anonymoushttps://www.blogger.com/profile/01061753453353408502noreply@blogger.comtag:blogger.com,1999:blog-1541468051247516447.post-45350141852223527552014-07-13T12:03:27.655-04:002014-07-13T12:03:27.655-04:00So what happens when these enormous bets don't...So what happens when these enormous bets don't pan out? Speculative economics already created enough trouble—the likely endpoint of this trend is disturbing. Noel Hefelehttps://www.blogger.com/profile/10991566209271459139noreply@blogger.com