WaMu, Where Are Thou?

The decline and fall of Washington Mutual, which swooned yesterday into the arms of J.P. Morgan Chase, is the “largest failure in U.S. banking history”, as the Wall Street Journal headline put it. Luckily depositors will not be injured; the bank’s debt- and preferred stockholders will not be so fortunate.

Are we nearing the bottom of a failure cycle which has the whole country holding its breath? Hard to tell. Certainly if Congress can get the giant bank bailout package signed that will help to stabilize things, and it is hard to imagine, for political reasons if no other, that they will leave Washington without getting SOMETHING done.

As for Manhattan real estate, mostly it too is holding its breath right now. Buyers are looking, Open Houses are busy, but many want to wait to see what happens next. Interestingly, several of those who ARE making offers are finding the sellers extremely reasonable. This is a moment of buyer opportunity.

I will end with my customary words of caution: residential real estate is an investment, but it is much MORE than an investment. If you can find the home you want and the price seems reasonable enough, don’t wait to outsmart the market. There are two reasons for this: 1) the market usually outsmarts you and 2) life is short. A beautiful home enhances your life in every way.