Great News..Manhattan buyers out in force and deals are happening

Funny how nobody replies. BTW, posted earlier but we also just got contract signed.

Doug is a 16 yr veteran, deep referral base, and his sellers flat out trust him, his market opinions, and listen to him on what needs to be done to move property. He is honest, ethical, and works hard for buyer clients too. And he decided to blog years ago, so the guy is in tune with a changing world. Props to him for being active, because its well deserved. I dont think his experiences are being felt widespread throughout the brokerage community.

urbandigs, so you don't feel an uptick yet?

1) Even the author says it might be a "Dead Cat Bounce". We're coming off an absolute crash in activity, so even doubling sales would leave us at 50% pace...

2) The guy is still noting that prices are down.

btw, how exactly is SteveF spinning 7 potential contracts as "buyers out in force".

Oh yeah, I forgot... denial.

Manhattan real estate appreciates 200% in 10 years and people think we are going to get away with a six month slowdown and a mere 20% dip off peak prices in the midst of the greatest economic crisis since the great depression which happens to have been caused by the collapse of the real estate bubble? Utter lunacy.

Actually, why is anyone looking at volume anymore?

Volume drops were originally noted as precursors to price drops, thats why they got mentioned. Thing is, we're already at the price drops... so why go back to looking at volume again?

Of course volume was going to bounce, it went down to nothing. But its price discovery time... and this market has already discovered a 20% drop.

Lets see where the next batch of sales are at... wonder how much seller panic there is.

"Manhattan real estate appreciates 200% in 10 years and people think we are going to get away with a six month slowdown and a mere 20% dip off peak prices in the midst of the greatest economic crisis since the great depression which happens to have been caused by the collapse of the real estate bubble? Utter lunacy."

Its always the folks who denied that there would be a crash in the first place that are suddenly the experts on telling us when its over...

Thats still a funny one.

and lets not forget....

inventory STILL growing...

http://www.urbandigs.com/charts.html

Uppereast - All I can pass on is that I see an uptick in sellers calling me about possibly working with them, and only 1 out of 6 signed on so far. Im helping/consulting two that are trying FSBO after terminating brokerage agreements.

I have a bunch of buyers, but I tell them my true thoughts and as you might suspect, they are holding off. Maybe 30 buyers. 20 of which on indefinite hold. 5 of which will be ready in few months. another 5 of which are seriously looking now. No contracts signed in last 4 months. Given that I just got this new listing, that means my buyers were listening to my advice and backed off over the past 5-6 months. I try to take pride in this, although it means less business for me in near term since last July/Aug or so.

To be honest, since my "low ball bids and cold feet" piece on UD, my clients took a big step to the side. We'll see how it goes the next 1-2 quarters. I tend to do a bunch of deals in a short period of time anyway. Thats how it somehow works for me.

Today's buyers will be tomorrow's sellers.

urbandigs, too bad there aren't enough brokers like you.

the trust you're building with your clients by telling them the truth will reap you benefits eventually. these clients, even if they are not buying right now will come right to you when they are ready, making you a very busy and wanted broker when the time comes, hopefully sooner than later.

UD, it seems you are trying to build a track record of credibility. This may prove more valuable than "number of deals done" in the future as the typical buyer will likely change from those bloated by loose and easy credit to the skeptical savers who have managed to keep their powder dry in the middle of a monsoon. The right day will come for those buyers to take down their big prize. Perhaps they will look to you when that day comes.

Not nice to mock SteveF, buyers are definately showing up everywhere, in fact 18 yesterday.

1-day 7-d 30-day
New Listings 88 595 1,752
Price Cuts 129 626 2,143
Contracts Signed 18 106 316
Total Inventory 9,803 9,735 9,297

18 contracts in all of Manhattan on open house day?
UD, is that supposed to be high?

Notice that inventory still jumping quite a bit.

for this time of year, I would think not. Deals are not going to zero, there will be volume, but its all relative and for this time of year, we priced in devastation already I think. Some deals will get done, many wont. Thats it. There will be an imbalance of sellers versus buyers for a few years. And thats that.

1000 days of inventory.

the point, fear level is high. And we moved 15-25%, perhaps more in some places, in a very short period. It kinda makes up for why it didnt start earlier! I often think about that.

Lets see how long this stays illiquid, and fear hangs around. Lets see what happens when price discovery hits. Lets see how media enhances it. Lets see how landscape is changed and new ideas succeed or fail. Very interesting times.

been a while...good to be back here!

> 1000 days of inventory.

2.6 years of inventory. And climbing. Doesn't sound too good to me...

btw, I thought this was a good piece (from UD, but not Noah!) on market psyche... there should be a volume jump, but only because lower prices are being accepted as a given...

http://www.streeteasy.com/nyc/talk/discussion/7839-interesting-ud-article-not-noah-denial-is-over

nyc, you've probably talked about this before but i'm curious as to what general level of price/sq ft you would be a buyer at for good manhattan inventory (define that however you will).

glad you're back noah

;-)

Look folks, there was still $18 billion of bonuses at year-end. The inflow to savings alone would spur incremental interest to purchase from a trough of 0 in Q4.

SteveF is always so blindly pro real estate as an investment -- he will be schlocking it for the next 50% decline all the way down and after five years in an L -- if it starts to recover -- he will still be saying -- I told you so! -- ignoring the opportunity cots and lost capital. Oy!

costs

I'm a mortgage broker and I can tell you purchases have definitely picked up. And it's just not me, it's everyone in my office. Contract prices are lower versus recent comps as evidenced by the appraisal reports. About 10% - 15% below.

Guess what, Manhattan sellers are out in force and they're cutting prices. Let's hope it continues.

Maybe but some of the lower priced apartments are actually getting multiple offers. Anything below $2 million seems to be moving better.

Maybe this round of buying simply flushes out the last of the fools. Fortunately, they're not using my money.

At lunch yesterday with a friend on the sidelines (looking for a 2BR), who said he looked at rents this past week and the disparity between cost of renting and buying is so extreme, no way he'll even look at buying right now.

And he doesn't spend a lot of time on streeteasy.

Who cares about the recession or downturn?????

The rental buildings I saw in NYC were boring and inferior to the condo buildings. I would rather loose some of daddy's money than live in a cookie cutter rental.

Apartments are for living, not for flipping you short-sighted clueless people!!

desgarcons -- loose --is spelled lose --- stop inbreeding!!! 3 generations rich -- 3 poor; clearly you are going toward poor if you breed because your disregard of wealth preservation indicates a missing sense of value.

New listings about 5.5 times contracts signed in the last 7 and 30 days according to urbandigs widget. Not going to slow the inventory build at that rate. Prices are going to have to fall further to stimulate the demand/activity to get the market in balance.

Ewww, "wealth preservation" is for ugly people.

Who exactly am I preserving it for? The government after I die? It's called living in the moment, sweetie. If I see an apartment I want to live in, then I buy it you tightwad. The economy will only fall further if those with money, such as myself, don't spend.

desgarcons - I assume you are a parody by some unemployed jokester. But since you are offensive without being funny, equals utterly annoying, I am "ignore this persons"-ing you.

My vibe on you is that you're low rent & kind of chunky & think you're "putting one over" on us. You aren't.

if the recession is just in the early stages why would intelligent, rich people want to buy now. Sellers will not make deep price cuts until they are surrounded by the recession and price cuts. I've seen it first hand in south florida. Sold my home in '05 neighbors listed same month as I closed and finally sold in '08 with a deep, deep price cut. they ended losing money.

anon10 - how many of the 300 or so contracts signed in the past month or so did you handle? quite the sample you're talking.

These conversations are just so amusing. It is great that Doug is seeing more activity; good for him. Let's remember that he is the guy who stated that he is pricing his listings 25% below peak comps. I would hope that would generate at least some interest.

But the more important point is that we don't need to speculate blindly on the number of deals being done. We have data. According to urbandigs just yesterday 18 apartments signed contracts while 88 new listings came on the market and 129 apartments had their prices chopped. It isn't anecdotal that this market cannot sustain itself at current prices or even close to personal prices--this is based on actual data.

One mans up-tick does not make a market. That said on the rental side I am actually very busy this week with solid "real" clients. Not people offering 30% below ask on a fairly priced unit. Hey I'll take it while I can.

>One mans up-tick does not make a market.<

Ditto. Upticks in long term down trends don't amount to anything as long as the macro (throw in micro as well for good measure) fundamental outlook is garbage. How many upticks/false hopes did Citigroup shares have on their way to 3 bucks or the Dow Jones on its way to 8K. As the old WS saying goes, don't try to catch a falling blade 'cause you will cut your hand.

I think as sellers continue to lower prices, buyers will come out and sign contracts. I have been looking in sutton/beekman and carnegie hill. A 2 BR on sutton palce south (candela bldg) dropped in pirce by $295,000 and went to contract right away (last list price was $1.2 million). Apartment needs new kitchen, but the space, layout and address are premiere.

There will always be some demand for people who want/need to buy... for people with cash on the sidelines that have been watching and looking with horror for the past three years as they lost out more than once on bidding wars, these buyers will find opportunities at 2005 prices and jump on board feeling that they FINALLY are getting what they want at a price they feel comfortable paying... my theory is these are people who always think it's the right thing to buy, or who got so shell shocked watching the market run away from them the past few years that their knee jerk reaction is to just jump in.... the sense I get from the open houses I attend are that most sales brokers are pushing this market as a 'once in a lifetime opportunity to get in before you are once again priced out forever'.. hmmmm what's wrong with that statement?

Fairly priced in whose estimation? You are the broker. Of course you think it is fairly priced, as do the sellers. But buyers are offering 30% below ask in order to hedge the risk of the market tumbling even further, which it will. Does the seller want a bird in the hand now, or wait until later when the downturn is definitive. At that point the buyer asks themselves, how much further will the market slide now? The buyer is making a purchase in a falling market knowing that the property they are buying will be worth less tomorrow. They would like the seller to share in that risk with them by acknowledging the risk of buying in this marketplace. There's a glimpse for you into this buyer's psyche. We are a cash buyer. What are you going to do to lure us into spending now, when common sense tells us to wait until the dust settles? Realtors, like urbandigs who markets to this issue, will do much better in this marketplace, in my opinion.

80s Man / MMafia - thanks guys!

Wow...all i did was link up to some positive news about increased buyer activity and I'm bombarded by everyone and their mother. There seems to be alot of built up anxiety in these posts. Sorry for your hyped up emotional states but don't blame the messenger.

It's not only Doug Heddings reporting increase activity but Curbed, Bellmarc and Corcoran etc. I'm seeing listings for Corcoran brokers who have had open houses every week for months for unsolds starting to not having open houses. Translation = accepted offers.

Its not that, its like getting excited nationally because sales volume increases when the real reason is bulk foreclosure sales at ridiculously low prices. Its supposed to be active now. At right price, things will move, and that price is down 15-25% or so, more in some places. I got a new listing coming that will be priced about 25% below the last same line sale in bldg. Lets see how it goes. I still inventory steadily rising.

urbandigs..your new listing at 25% below last line sale..how overpriced was the last same line sale. does it really mean anything.

so now overpriced sales dont count as peak sales? I dont get this comment at all? If a new dev unit sold for $1,700/sft at peak, and now the same unit trades for 1,200/sft, does it mean the original sale was 25% overpriced? Cmon Julia.

I feel obligated to put in my two cents here, possibly because i am on a caffeine high (two double espressos- what was i thinking?) and need to get my thoughts organized to ignore my rapid heart rate..
I am an agent with a large firm in manhattan, and what i am noticing in the past couple weeks is as follows:
1. Increased buyer traffic looking, but ONLY in certain areas/price points. I see increased traffic in the below 1.5 million range, and mostly in prime areas. This includes people calling for appointments and open house attendees. I still see very little movement in areas not considered prime.
2. I see more bids coming in, although definitely at lower numbers, and only on properties that are well priced, usually by a broker thinking "in advance" of the market. Again this is only in the below 1.5 range.
3. I see an uptick in contracts signed not only for myself, but companywide, and have been told by attorneys that i work with that just over the past month their business has picked up significantly. We are all seeing that these buyers fit the same profile-- First time buyers, or people moving from rentals who are negotiating deals at numbers GREATLY off the asking prices, in some cases up to 40 percent off.
4. I also see Sellers who had been resistant to price change in the past becoming more amenable, and accepting the reality of a changing market.
All of this would make it seem that things are picking up, which temporarily I agree with, however --in certain neighborhoods we have only seen "the tip of the iceberg" in bad news for sellers and developers. This is a time period where it really shows that LOCATION means a lot. Previously "up and coming" areas are now going to have serious further ppsf drops, most notably in the Financial District, where there are a large large number of defaults on contracts that have not yet been rereleased for sale.

nycbrokerdax,

great post. 1.5 million does seem to be a key number. above that the market seems pretty close to totally dead. part of the reason: people just have a lot less money to spend.

"Actually, why is anyone looking at volume anymore?

Volume drops were originally noted as precursors to price drops, thats why they got mentioned. Thing is, we're already at the price drops... so why go back to looking at volume again?"

That's kind of a silly point - you should always look at both pricing and volume. Neither means all that much in isolation, and it's not exactly difficult to look at both at the same time, is it? At this point, I think there's a strong contingent of potential buyers who are much less price sensitive than they were before. That is, price cuts don't mean that much to them until they feel better about jobs, credit, other investments, etc. That's why volume has been so low.

nycbrokerdax, which prime areas are you seeing activity in? Are these first time buyers going for 1BRs or larger units?

> Neither means all that much in isolation

Pricing in isolation means an incredible amount in regards to, well, pricing.

Silly to think otherwise.

"Pricing in isolation means an incredible amount in regards to, well, pricing.

Silly to think otherwise."

It doesn't tell you much about the market, which is what people care about. If the average sales price for the year is $3m but you don't know that it was only from one sale, you don't really know very much about the market. Silly to think otherwise.

happyrenter, thanks! and agreed as to your reasoning.
bjw103, the buyers that I am dealing with myself, as well as the overall consensus from company data, is that it is mostly first time buyers and renters who may have owned previously but sold at the peak and have been in rentals for the last year or two. The majority has been in the under 800k range (mostly the first timers) and then a number from 800k to 1.5, mainly renters moving to ownership. Many of these people had been waiting on the sidelines for prices to drop, and are comfortable knowing that although they may not be buying at the bottom, they are getting an apartment that they love (they are only bidding if it is the Right fit, they are not "settling") and they are sealing in 30 year fixed loans at low rates. We have seen apartments in Chelsea, West Village, and central UWS and central UES going to contract, overwhelmingly either resales or new developments where most of the units had already been sold pre meltdown. There is virtually NO action on new developments that are less than 50 percent sold, even at reduced prices. Areas like Fidi and Murray Hill are definitely seeing significantly less deals, also Yorkville and Harlem. People are really sticking to their exact preferred location

nycbrokerdax, great info, thanks!

FWIW, this bit also from Doug Heddings:

"Check out this comment I received privately on this post from a well-known NYC real estate attorney:

Ignore the critics. They report on yesterdays news. I'm a real estate atty in Manhattan and we got over 10 deals sheets each of the last 2 weeks (that's 20 deals). This isn't spin. Volume has returned. I can't comment on price since that is a brokers expertise. Let's hope it continues."

urbandigs...i understand what your saying..my comment was the prices were so crazy for the past few years what does 25% reduction mean. If it was '04 pricing with a 25% reduction that would be great. I meant no harm and i enjoy your blog as well as your postings.

> It doesn't tell you much about the market, which is what people care about.

Given all the discussions here, what people care about it pricing.
Extremely silly to think otherwise.

Volume was brought up as a precursor to pricing. Nobody was looking at volume when we had market reports showing the increases.

> the average sales price for the year is $3m but you don't know that it was only from one sale

Yes, when there is one sale in a particular year, you can congratulate yourself on finally being right on something. ;-)

Until then, you're just being argumentative.

"Ignore the critics. They report on yesterdays news."

bjw, did you point that out because he was talking about you?

;-)

"Given all the discussions here, what people care about it pricing.
Extremely silly to think otherwise.

Volume was brought up as a precursor to pricing. Nobody was looking at volume when we had market reports showing the increases."

I strongly disagree. Potential buyers absolutely care about volume AND pricing. If things really start to move in a sustained fashion, that will give them a lot more confidence that pricing is where it should be. It's really just silly to focus on one and not both (my extreme example was to show this) - I don't know anyone who would argue such a thing, when it's really quite easy to do.

"bjw, did you point that out because he was talking about you?"

Did you read the post? The "critics" he mentions would be people like yourself.

Happy to report that after we signed the contract (we were seller), we had another couple that wanted to put bid on apt. (before they heard that it had already gone into contract). These were people that were looking late last year. They came 4 or 5 times but kept saying that they are not ready yet.

Urban..I have to be alittle honest here. I def. repsect your overall economic knowledge. You called this recession way before the other so called experts. However, I gotta tell ya, your broker real estate front lines knowledge is questionable. Doug Heddings is too busy to even blog!, you on the other hand pour out these monstrous reports everyday on UD. Mostly stock/business related. You also spend way to much time on these boards and your boards. I would think that a Thursday would be spent on the phone with clients discussing the weekend prospects not here. Anyhow, don't hate me but I can't accept your real estate happenings. When I want to know about the next recession I'm all over UD. When I want to know about current real estate action I'm all over truegotham, Observer and Curbed.

desgarcons -- if you are interested in becoming a sugar daddy -- i know a slew of beautiful, smart, traveled ladies who would love to spend your dough that you seem so willing with which to part!

Sweetie, I'm gay.

You didn't know that?

Perhaps a few translations would help.

garcons - French for waiters.
Commes des garcons - French for "like the boys"

you overestimate how much time I spend here, with a new window up, as I work. Im totally booked up later today, tomorrow, and this weekend. But thanks for asking. It just took me exactly 40 seconds to write this.

When you want to know about current real estate action, I'm questionable? Okay, show me all the agents writing in early JULY 2008 about the LOW BALL BIDS / COLD FEET of buyers that just so happen to be a real time report on manhattan exactly 2 months before the market shut down.

http://www.urbandigs.com/2008/07/low_ball_bids_cold_feet.html

In hindsight, I guess that report was way off base! Oops, Im up to 2 minutes. I must not be busy.

> I strongly disagree. Potential buyers absolutely care about volume AND pricing.

I'm a potential buyer. I don't care about volume. I only cared as much as it predicted this drop in prices... which is now here.

> The "critics" he mentions would be people like yourself.

Only if you read it incorrect.

"Ignore the critics. They report on yesterdays news."

I'm talking about your fascination with outdated market data. He certainly isn't talking about me, as I don't doubt volume has increased... I said that above.

"Urban..I have to be alittle honest here. I def. repsect your overall economic knowledge. You called this recession way before the other so called experts. However, I gotta tell ya, your broker real estate front lines knowledge is questionable. Doug Heddings is too busy to even blog!, you on the other hand pour out these monstrous reports everyday on UD. Mostly stock/business related. You also spend way to much time on these boards and your boards. I would think that a Thursday would be spent on the phone with clients discussing the weekend prospects not here. Anyhow, don't hate me but I can't accept your real estate happenings. When I want to know about the next recession I'm all over UD. When I want to know about current real estate action I'm all over truegotham, Observer and Curbed."

OK, when SteveF goes after UD, you KNOW somebody is in denial city....

UD almost perfectly predicted every thing that is going on in this market - INCLUDING this volume bounce - and you don't trust him, but instead trust the morons who never saw it coming.

SteveF, your RE losses are your own fault. Your ignorance has not served you well.

"I'm a potential buyer. I don't care about volume. I only cared as much as it predicted this drop in prices... which is now here."

I'd say you're in the minority then. If it's a leading indicator of prices, why would you stop looking at it? I highly doubt you think prices have hit bottom. I suspect you'll only bring up volumes when it suits you - at the slightest uptick you'll shy away (which is exactly what you accuse others of doing around here).

"I'm talking about your fascination with outdated market data. He certainly isn't talking about me, as I don't doubt volume has increased... I said that above."

I'm actually just fascinated with the best and most reliable data (ie: closed sales prices). Even those who report contract data include major caveats. The "critics" he was talking about were people who blindly accuse all brokers of spinning everything.

> I'd say you're in the minority then.

Possibly... but it still means sweeping statements don't really apply.

But, I probably have 15-20 friends in that circle as well. None are looking at volumes. Most don't go anywhere deep into this. They care about prices coming down, buying stuff for X% less than 2 years ago. They don't care who ELSE bought, they just want declines.

Its like shopping... you don't really care how many other people are getting what deals, you just want 20% off sticker. At least thats how everyone I know feels.

> If it's a leading indicator of prices, why would you stop looking at it?

I should be been more precise... its a leading indicator of price MOVES. Once we're in the pricing moves, it doesn't matter a whole lot more to me. Noel did some really good writeups on this, and says it better than I could. But, in short, the volume decline was Phase I. We're not in Phase II, and IMHO there are different things to look at.

> I'm actually just fascinated with the best and most reliable data (ie: closed sales prices).

And absolutely outdated, the EXACT word the guy you quoted railed against....

> The "critics" he was talking about were people who blindly accuse all brokers of spinning everything.

You can stop trying to put words in his mouth, because we've now read what he ACTUALLY said.... and thats not what he said....

Actually SteveF, what urbandigs is doing is smart- he is filling that small niche for buyers who want a broker who actually knows his shit and isn't afraid to lay it out, positive or negative. His website is a fantastic advertisement for that. I'm sure he gets a lot of business from it. I know he'll be the first broker I talk to when I'm ready to buy.

nyc10022, fair enough, but I would urge anyone not to view buying an apartment merely as "shopping." It's obviously a huge financial commitment for most of us and you can only do well (or can do no worse) by being well-informed. That was really the crux of my point; I don't think you believe that we should willfully ignore volumes, but it kind of came off that way to me. You are right that they lead price movement, but I think simple movement is not enough. You want to be ahead of the game if there's strong indications of something like a bottom. To advise otherwise is kind of foolish, IMHO.

"And absolutely outdated, the EXACT word the guy you quoted railed against...."

Look, as you well know, real estate is fairly illiquid. Data that lags a few months is not as "outdated" as you think it is. I've never said anyone should buy or sell solely based on this info; I just think your strong bias against brokers and "broker spin" kind of blinds you to what is the only real indicator of prices (ie: actual prices themselves). As for the guy I quoted, I posted the entire quotation. It's quite clear if you go to Doug's site that the attorney was referring to people who think real estate is dead in this city right now. That's a school of thought that most people would attach to your posts.

> nyc10022, fair enough, but I would urge anyone not to view buying an apartment merely as "shopping."
> It's obviously a huge financial commitment for most of us and you can only do well (or can do no
> worse) by being well-informed.

Of course, I'm just giving an analogy. But my friends are folks who have kept a watch for some time, looked at prices, checked out apartments, read the NYTimes RE Section (no matter how much I complain). They aren't taking this lightly. But they are looking at prices, not volume... the volume in of itself doesn't matter to them.

> That was really the crux of my point; I don't think you believe that we should willfully ignore
> volumes, but it kind of came off that way to me.

I'm not saying it should be ignored, but it should certainly not be used in a "market is recovering" piece of logic. Home sales jumped nationwide, just as prices tanked even more. I was simply combatting a misguided notion. OF COURSE volume was going to bounce, can't get much lower than 0, but using that as a sign of "get in now, prices are going up" is dishonest. Not saying you did that, but others have clearly inferred such.

> You are right that they lead price movement, but I think simple movement is not enough.
> You want to be ahead of the game if there's strong indications of something like a bottom.
> To advise otherwise is kind of foolish, IMHO.

Agreed you want to be ahead of the game, and maybe see a bottom. You want to look at the data that matters. But telling someone to look at the WRONG THING as an indicator is as foolish as it gets. Yes, use all the indicators. Just use the right ones and USE THEM CORRECTLY. That was not done in this example.

> Look, as you well know, real estate is fairly illiquid. Data that lags a few months is not
> as "outdated" as you think it is.

We'll just have to agree to disagree. In a normal year, perhaps you have a case. But we just had a black swan event, and we had a particular time where it "hit", where the country "got it". Where panic set in, simply. Similar to October 1987, but worse. To look at data BEFORE that event as evidence of what is going on now is a big mistake IMHO. This isn't just outdated by a period of time. You are talking about data outdated by a complete change in the market.

> I've never said anyone should buy or sell solely based on this info; I just think your strong bias
> against brokers and "broker spin" kind of blinds you to what is the only real indicator of prices
> (ie: actual prices themselves).

Except you're the one who won't look at updated prices.

I like price info, thats key now. I just want to look at the data that is meaningful, and not look at data from a different market.

> As for the guy I quoted, I posted the entire quotation. It's quite clear if you go to Doug's site
> that the attorney was referring to people who think real estate is dead in this city right now.

Yes, VOLUME. He used that word several times. I never disagreed that we might be having a volume bounce. I agree with the guy... you made the mistake of associating that with prices.

> That's a school of thought that most people would attach to your posts.

Everyone makes mistakes...

"Actually SteveF, what urbandigs is doing is smart- he is filling that small niche for buyers who want a broker who actually knows his shit and isn't afraid to lay it out, positive or negative. His website is a fantastic advertisement for that. I'm sure he gets a lot of business from it. I know he'll be the first broker I talk to when I'm ready to buy."

Urban Digs is only a good resource if you want truth and reality in this market. There is very little he didn't talk about before it happened, and very little he wasn't 90% correct (at least) on. His articles on price discovery were right on. If you want somebody to tell you that you are a RE genius for buying at the peak of the bubble, he is a HORRIBLE resource.

Sorry.

;-)

I was told by a very large real estate investor in NYC to walk around and make 10 offers for 40-50% below the asking price on $2 million dollar apt's. Then just leave your business card. He said in 6-9 months he guarantees you'll get calls as desperate sellers realize they need to sell ASAP. He said no one will be believe you now but mark my word with the currency the way it is and wall street no one going to be buying in this city for a while and there will be some sellers who will become forced sellers.

I also would be offering cash and could close in a week.

Noone believed that you'd be able to offer 25% less and get deals done 6 months ago... and look where we are now.

So, I don't doubt you. Add in the psychology effect, where the price keeps dripping down and your card is there to remind them.... I could see that working.

I might have to try that...

"but using that as a sign of "get in now, prices are going up" is dishonest. Not saying you did that, but others have clearly inferred such."

Completely agree - that's just poor advice. If there is a sustained increase in volume, maybe we can then start talking about something like a bottom. I don't think that'll happen for a while though.

"We'll just have to agree to disagree. In a normal year, perhaps you have a case. But we just had a black swan event, and we had a particular time where it "hit", where the country "got it". Where panic set in, simply. Similar to October 1987, but worse. To look at data BEFORE that event as evidence of what is going on now is a big mistake IMHO. This isn't just outdated by a period of time. You are talking about data outdated by a complete change in the market."

I see your point, but if the "black swan event" occured in October, the Q1 reports will be reflecting this. I agree that so-called "cataclysmic" events like Lehman, etc. do reshape how you would view those reports, but I think that's a one-off effect. Will there be some pre-event pricing in the Q1s? Probably some, but far less than in Q4.

"So, I don't doubt you. Add in the psychology effect, where the price keeps dripping down and your card is there to remind them.... I could see that working."

I should second that - bidding aggressively and leaving your contact info is always a good idea. It helped me get a good deal on my place. The one drawback? I've gotten A LOT of emails from brokers in the past few months. A lot. Suddenly my bids aren't "insulting" anymore?

"Completely agree - that's just poor advice. If there is a sustained increase in volume, maybe we can then start talking about something like a bottom. I don't think that'll happen for a while though."

Sure, we can discuss... but are you inferring that sustained volume increase means bottom? In the national market, thats not the case. In the prior cases I've seen the data, the correlation doesn't seem to be there....

> I see your point, but if the "black swan event" occured in October, the Q1 reports will be
> reflecting this

Only partially.... contracts can take quite some time to close. But, say thats true... that means its April - 6 months after - before there is "usable" information.

Meanwhile, there are 20% (or more) discounts to be had right now... anyone stuck on waiting for Q1 data will have missed that.... and would be in a VERY poor negotiating position.

IMHO, telling anyone to wait for April for a confirmation of the decline is making a HUGE mistake...

Betcha Q1/2 2010 beats Q1/2 2009. People are gonna be real surprised to see price increases. A little government sponsored inflation will do wonders. :)

> A little government sponsored inflation will do wonders. :)

So will 10% mortgage rates...

You'd actually have to have wage inflation to have home price inflation, which isn't going to happen real soon. Higher mortgage rates, well, that may come sooner.

Yes, but a denier can dream, can't he?

;-)

10022 - So it is a bet? :)

BYW, optimists are always right, just sometimes they have to wait a bit. :)

But heck, keep talking the market down! There is a classic 7 at 40 Fifth that isn't lowering its price that I'd really like to buy and trade up!!!

> BYW, optimists are always right, just sometimes they have to wait a bit. :)

When you learn a thing or two about finance, you learn that the delays (and inflation) actually turn right into wrong. Look up "real return".

Not to mention, its gonna be a few more years before the dotcom optimizsts are right.
Or the tulip dealers...

Maybe when we're all dead, they'll be "right"... because it didn't matter anyway.

nyc - When you learn a thing or two about finance

Sorry, I am almost finished re-reading Minsky's Stabilizing an Unstable Economy. I will reply to you further when I finish. All that expensive graduate education gone to waste. What a shame. Worse investment than NYC real estate. :(

Steve F, substitute "browsers" for "buyers" in the title of this thread, and "deal" (singular) for "deals" and you'll get credit for 'just posting some positive news.'

Don't call out Noah, you're out of your league.

"Meanwhile, there are 20% (or more) discounts to be had right now... anyone stuck on waiting for Q1 data will have missed that.... and would be in a VERY poor negotiating position."

nyc10022, I think you assume that I mean you should base your bids on market report prices. I would never advise anyone to do that - buyers should bid aggressively, in any market. Those reports are useful for tracking the real path of the market, even though they're always a few months behind. That's the nature of closings, and there's really very little to be done about that.

bjw...I love these 20% price drop headlines....first of all it's impossible to come up with a headline of 10% increase or 10% decrease in prices. Each neighborhood/apartment is it's own market. This is even more impossible when transaction volume is off 75%. Unless every buyer left manhattan they are all waiting to pounce.

JKB..I'm not taking on anyone. just stating that Noah is too busy being on various message boards(including his own) and researching his monstrous UB blog posts(which must require alot of research time). He is not in the real estate trenches like the rest of the top brokers. His specialty is economics.

"Unless every buyer left manhattan they are all waiting to pounce."

Lot's of buyers have lost over 40% of their net worth or have lost their jobs. They're not buyers anymore. Do you really think prospective buyers are somehow immune to macroeconomic forces?

steveF,

GTFOHWTBS

this is the most ill-informed, cheerleader, denial/hope thread i've come across in a bit.

http://www.fiscalpolicy.org/FPI_NYC_EmergingUnemploymentCrisis2009_December2008.pdf

See those charts?

From an economic standpoint, all your 'hope' is purely based on the fact that we are transitioning from a massive, falling-off the cliff action in volume, which is now translating into falling prices.

We've seen the same thing occur in the rest of the country, and it will occur here as well too. The headlines will stop reading massive sales volume drops of 75% and such, but will start to shift into massive drops in prices.

Illiquid assets = first, massive drop in volume, then, massive drop in prices while volume begins to stabilize at a much lower rate than before and stops the near vertical drop.

If you don't believe this simple economic phenomenon, just show me a SINGLE CASE in human history, where a massive, falling off the cliff drop in volume (aka 70% + drop YoY) did NOT translate into a massive drop in prices. Pick ANY asset class, Google it and show me one case.

Otherwise, accept the fact that we are now transitioning from the shocking drop in sales volume transactions to very, very significant drops in prices. It's just economics. It ain't rocket science.

"nyc10022, I think you assume that I mean you should base your bids on market report prices. I would never advise anyone to do that - buyers should bid aggressively, in any market. "

I agree, but its still a problem.

If you don't know what the market is, you can't effectively bid "aggressively".

10% below used to be considered "aggressive". If you know that comps are down 20%, then you'd realize that "aggressive" now means bid 30% under.

So, yes, big aggressively... but to do that, you have to know where the market is. Otherwise, its just silly.

"JKB..I'm not taking on anyone. just stating that Noah is too busy being on various message boards(including his own) and researching his monstrous UB blog posts(which must require alot of research time). He is not in the real estate trenches like the rest of the top brokers. His specialty is economics."

Yes, the rest of the "top brokers' who said we wouldn't decline 6 months ago. Yes, you keep listening to them, SteveF, and you'll be fine. There will be no crash.

BTW, what "trench" is Dolly in that Steve is not? Most of the top brokers are completely out of whack... and getting their asses kicked. Dolly got FIRED.

Wow, denial city here...

"first of all it's impossible to come up with a headline of 10% increase or 10% decrease in prices. "

Of course... because we're down 20%. Why would you expect incorrect headlines?

BTW, Steve, what was that whole thing about MY posts not adding any value?

"If you don't know what the market is, you can't effectively bid "aggressively"."

I agree, but this all comes back to my point - if you know that virtually nothing is selling now, you know you can bid even more aggressively. Hence, a general understanding of volumes is still important to gauge the market.

"I agree, but this all comes back to my point - if you know that virtually nothing is selling now, you know you can bid even more aggressively. Hence, a general understanding of volumes is still important to gauge the market."

All 100% meaningless if you don't know what aggressive is...

And you don't need to know volume to be aggressive... you only came about the volume on 1 apartment as a buyer. I'm not saying its of zero value, but its certainly nowhere near as valuable as accurate price data.

BTW, as for that uptick in volume thing....

http://www.urbandigs.com/charts3.html

Whoops...