I had this dream that I was the Edge. People talked about me behind my back, bad mouthing the neighborhood I'm from and saying things like, no one will ever love me. No one will ever live with me. People in Manhattan will point their finger at me and say, there's the problem. In my dream I start to swallow water...lots of it...I panic...I'm being water boarded by the CIA in some deep basement in Iraq but, somehow I'm relieved that I'm not the EDGE.

It's beginning to sound like auction time for the Edge...

tanker, my bad. the first part should have been directed to jim

Geez, There has to be a limit to stupidity. If any asset is currently selling at x price (assuming a significant number of units selling), which is more or less similar to the deposit amount, as in within the percent or so that the deposit represents, it is not logical to walk away from the deposit. It is a ridiculous distraction to even debate this. The market view of one person that the market may fall in the future is irrelevant. Now, the bar on re-selling within one year might,,,,just might,,impact this issue but probably not. SE glibness interferes with a logical discussion too often.

jim, are you directing your statement to me? because if you are, i wish you would read my comment more carefully.

i wrote "if a 10% discount led to the market clearing, i would agree that walking away wouldn't make much sense." i don't really see how that differs from what you are saying.

as you say "(assuming a significant number of units selling)" which is similar to my "market clearing" conditional. currently we don't know whether your assumption is true.

when surveying the available information, i don't believe it's just one person's view of the market that 10% off edge's asking price is the market clearing. well respected sources, e.g. Miller, has came out and said manhattan has fallen at least 20% off of peak. if i were a betting man, i would not wager that WB has fallen significantly less than manhattan, especially considering factors like its excess supply.

given that the edge's prices are priced near WB's peak with many units north of $900 psf, i would think that a rational person could think that 10% off of the edge's asks are not near market. in that case, it might make sense to walk away.

here, we are not discussing whether it makes sense to walk away when market has fallen 10% or less, which i think everyone can agree. but we are discussing whether the market has fallen 10% or less.

we need more time to figure this one out, but given that the edge is now willing to negotiate 10% down (according to people on SE), we'll see if the market clears at this price level. my suspicion is that it will not, and the market will require more than 10% of edge's peak asks. if my suspicions are correct, then it may be perfectly rational for people to walk away from their deposits.

I wouldnt even think abt the edge unles we're talking about 20% off current ask.

Milkman as you put it I guess I agree. If the edge sells significant units at the current minus 10% range then I guess as some point we will have to accept that that is the market, however overpriced it may seem to many on here, BUT unless they sell out (unlikely), there will be a debate about whether sales are brisk enough to reflect reasonable market clearing levels.

"bjw, i am not sure i totally understand the point you are trying to get across. in the real estate market, there is usually a middle man (except for cash purchases, which i believe represent a relatively small percentage of purchases). so are you saying that supply and demand is generally inappropriate or only inappropriate in these circumstances?"

milkman, I'm not saying ignore supply-and-demand; I'm saying because of the restricted lending environment, there will undoubtedly be a lag between "correct" pricing and clearing of inventory, which makes it difficult for those of us surveying the market to know when that mark's been attained. It's not as simple as saying: "Ok, nothing's selling now, so it must be overpriced." I happen to think it is overpriced still, but it's just my opinion in the end, and the market speaks for itself of course. As has been said before, we'll know a bit more when closings start.

bjw, is your thought that the current lending environment will become less restrictive in the near future? if not and tight lending remains the norm, that factor becomes part of market pricing.

i guess it's possible that lending will loosen up again, but with upcoming losses in commercial RE and the possible winding down of the govt's mortgage purchase program, i have my doubts. so i think that we can draw some conclusions based on current sales rates

closings will definitely provide useful information, but they are a while away. and most of them will be based on old prices (unless sales really pick up), so people will have to factor in deposits when trying to ascertain what those closings say about market value.

milkman, I do think it'll be less restrictive, but I don't think anyone knows when exactly. Maybe after the '10 elections? But you make an excellent point that until then, this environment does impact pricing. I'm not convinced it's impacting the Edge's pricing right now though, for a few reasons: no underlying mortgage, and no closings scheduled anytime soon. They must recognize that no one buys off floorplans anymore, and even though they've just opened the model unit, that's not enough to really entice buyers who want to see the finished product they'll be buying. But I think all your points are valid and really underscore how little information we have about what's going on here, unfortunately. That's why I think interested buyers (ie: jimstreeteasy) would do well to sit tight until the picture comes into focus a bit more, but be ready to act accordingly (ie: offer or pass) when it does.

This relates more to NSP and Toll, but surprising preliminary Q4 numbers there:
http://www.sec.gov/Archives/edgar/data/794170/000095012309060842/c92381exv99w1.htm

I popped into the sales office over the weekend. the person i spoke with was super nice and upfront. she said the developer will "consider" offers of 20 percent below ask and is covering closing costs. She also reaffirmed that they are 30 percent sold (not counting anyone who might back out of course).

I wonder if this is semantics with them. When I asked -- two weeks ago -- "what if I offer 25% discount, or some very large discount, am I going to get a discussion going?" They answered: "Yes, we will consider offers." BUT...then she said, you should be realistic and be "nearer" to the level we are currently giving, which she seemed to hint was like 10% plus closing costs.I had the strong impression 25% was no go, and basically it was 10 percent plus closing costs.

They also told me quite emphatically that it was irrelevant to them if you pay cash or not