What WIll NYC Look Like If Prices Fall 50%???

You are retarded. Prices have fallen that much or nearly that much in many other large American cities ALREADY, with none of the increases in crime etc you fearmongers claim would happen here.

It will look like NYC 2001-2002. The horror, the horror.

like where Jason? Stockton? Detroit? The rust belt? Oh yeah, those are ALL great places. I wish I could move there right now!

Things will be a bit rougher, but we all know Alpine is extreme and a fear mongerer. Maybe the downturn will actually lead to a resurgence in independence; more vitality and less mass marketing of the city. Maybe it takes hard times to bring out what is best about New York and ultimately makes it so special. Well, one can only hope.

alpine, yes, please do. you clearly won't like it here soon, with all those assault weapons being brandished in the streets. there's got to be someplace you can find in US that still has overpriced real estate and no crime.

Well, what did the city look like 30% ago? Now imagine that move repeated. 70% x 70% = 49%. Yes, when $800k 1 beds sell for $400k, still triple what they cost in 1998...it will be like Detroit.

Prices have also fallen about 50% in Miami (the mortgage fraud capital of the United States).

Tell me whether you would rather live in NYC or Miami:

http://newyork.areaconnect.com/crime/compare.htm?c1=new+york&s1=NY&c2=Miami&s2=FL

California? Nevada? Florida? Arizona? Not places I want to live, but hardly pits, either. Alpine, you're more than welcome to move if that's the way the wind blows.

About half way through this piece there is a chart indicating what US GDP would have been without mortgage equity withdrawals. It is a very frightening graph, and a complete indictment of the economy of the 2000s if one carves out the real estate bubble.

http://www.ritholtz.com/blog/2009/04/the-trend-may-not-be-your-friend/

Here's an updaed Miami vs. NYC chart:

http://newyork.areaconnect.com/crime/compare.htm?c1=New+York&s1=NY&c2=Miami&s2=FL

Again, tell me where you want to live. If prices fall 50% in NYC, I can assure you that most, if not all, of those blue lines will go all the way to the top of the page.

Now it's time to do Phoenix, where prices have also fallen 50%:

http://newyork.areaconnect.com/crime/compare.htm?c1=New+York&s1=NY&c2=Phoenix&s2=AZ

Oh, and here is a fun piece of information: Phoenix is the kidnapping capital of the U.S.! Isn't that exciting? I've always wanted to be kidnapped by a Mexican drug cartel...

perhaps you should go grow turnips in the country. the big cities clearly scare you.

Mexican Cartels Make Phoenix U.S. Kidnap Capital

A major U.S. city long known as an illegal immigrant sanctuary has the nation’s highest rate of ransom kidnappings, virtually all of them connected to Mexican drug cartels that have penetrated the area in the last few years.

Federal law enforcement officials have crowned Phoenix the country’s kidnap-for-ransom capital, according to a news report published this week. Arizona’s largest city, also the nation’s fifth most populous, by far has more ransom kidnappings than any other U.S. municipality and most every victim and suspect is connected to Mexican drug smugglers from Sinaloa which is located along the Pacific Coast several hours south of Arizona.

Popular among Latin American terrorists and crime organizations to raise funds, ransom kidnappings are rare in the U.S. and most local law enforcement officers never encounter one throughout their career. But Arizona has become the new drug gateway into the United States and that dubious honor comes with unprecedented violence.

In the last two years, Phoenix Police received nearly 1,000 kidnapping-for-ransom reports and authorities estimate that twice as many went unreported. Kidnappings are so rampant that the department had to create a special unit to handle the once unheard of crimes.

Similar to construction work, police say kidnapping in Phoenix relies on cheap illegal alien Mexican workers, often recruited from raunchy local bars the way contractors go to home improvement stores to hire day laborers.

I think this argument is over. Nearly every city that has seen 50% price drops has crime rates that are substantially higher than NYC's. Why do you think that NYC will not experience the same fate if we see a 50% decline?

"California? Nevada? Florida? Arizona? Not places I want to live, but hardly pits, either."

Really? Then why does Los Angeles have higher crime rates in every single category compared to NYC?

http://newyork.areaconnect.com/crime/compare.htm?c1=New+York&s1=NY&c2=Los+Angeles&s2=CA

in NYC we will dancing on the streets ;-)

http://www.youtube.com/watch?v=CdvITn5cAVc&feature=PlayList&p=3814EED6ECE8B8C1&playnext=1&playnext_from=PL&index=1

or will it be rather this ;-)

http://www.youtube.com/watch?v=z1-fPQgRGvY

"I think this argument is over. Nearly every city that has seen 50% price drops has crime rates that are substantially higher than NYC's. Why do you think that NYC will not experience the same fate if we see a 50% decline?"

This is so fucking stupid. What bankers can afford to pay for NYC 2-beds really has nothing to do with where crime rates are going.

what makes you so sure those bankers are going to stay in NYC? If I was an unemployed banker, I would look into moving some place with a strong economy and a cheap cost of living, like Texas or D.C. Lots of work there...

also, it's not all about the bankers. Recessions lead people to do desperate things. Many people will committ crimes of oportunity to pay the bills, whether it be auto theft, burglary, arson, etc.

I never said they would stay. I think I have actually said many of them would move out over time. I just think this idea that NYC getting more affordable turns it into a pit of despair is kind of a joke. My point is NYC can get cut in 1/2 (30% from here at 70c) and really it doesn't mean shit. It means regretful post 2002 buyers and affordable places for non-finance professionals.

Alpine, I've decided you are just annoying. I can't figure out what your point is.

"My point is NYC can get cut in 1/2 (30% from here at 70c) and really it doesn't mean shit."

History disproves this. Instead of living in denial, why not look at the crime rates during previous declines, like the 70s?

I'm not living in denial. I'm watching it unfold. NYC is down 30% and so far - nothing. I don't see the price of a coop as the causal mechanism here. Finance incomes normalizing (and apartments as a result) isn't = bankrupt NYC like the 1970s.

In statistics, a spurious relationship (or, sometimes, spurious correlation or spurious regression) is a mathematical relationship in which two occurrences have no causal connection, yet it may be inferred that they do, due to a certain third, unseen factor (referred to as a "confounding factor" or "lurking variable"). The spurious relationship gives an impression of a worthy link between two groups that is invalid when objectively examined.

The misleading correlation between two variables is produced through the operation of a third causal variable. In other words we find a correlation between A and B. So we have three possible relationships:

A causes B,
B causes A,
OR
C causes both A and B.

The last is a spurious correlation. It is therefore often said that "Correlation does not imply causation".

well, that kind of supports our argument that prices will drop, now doesn't it.

alpine, i lived in NYC when crime rates were high. i left for a few years because i couldn't take it any more, and i was young and couldn't afford a nicer place to live. my husband also wanted to go to law school and i didn't want loans and the cost of living in NYC while he was a student. but it wasn't the crime that pushed me away, it was the cost of housing versus my income. once again, move to the country or a small city if it's getting to be too much for you.

i'm with bronxboy on this one. lower real estate prices, fewer hipsters, not so many bankers would all improve the quality of life around here (not a banker-bash, btw, just an appreciation for some of the people who have been priced out recently). times of adversity are often extremely rich in the arts, philosophy, etc. these last 10 years have seemed frantic and a bit soulless to me. we shouldn't judge ourselves or others by what home a person chooses to or can afford to live in.

the other thing to keep in mind is that in the 70's, the rest of the country was hurting but not to the extent that NY was. now we're in uncharted territory--all in the toilet together.

without bankers and hispters, many neighborhoods will be ghost towns. Can you imagine DUMBO, Greenpoint, and Williamsburg without hipsters? It will be deserted.

Alpine, you idiot, Miami and Los Angeles had higher crime rates than NYC, and by about the same percentage, ten and five years ago. The real estate bubble then crash did not affect this at all. Ditto for SF, which also is down more than NYC. Same for LV, Chicago...there is no correlation between a RISE in crime rates in any of those cities and the real estate crash, and all throughout the real estate crash of the 1990s, crime rates DECREASED in NYC and every other major city.

alpine, not without. with fewer. we lived perfectly well in the mid to late 90s without the huge numbers of bankers. and yes, certain areas will be pretty devastated. because they were massively overbuilt.

wall street people losing jobs are not going to start mugging people and robbing banks...they've done that legally for years...they will survive as will NYC.

I think the bottom line is NYC was better in the 1990s... More affordable and more diverse. Bring on 8x rent coop values!

I mean isn't Manhattan better when a single person in advertising can buy a 1 bed for $400k vs. one where only a single banker can afford to pay $900k?

Rhino, bingo.

""California? Nevada? Florida? Arizona? Not places I want to live, but hardly pits, either."

Really? Then why does Los Angeles have higher crime rates in every single category compared to NYC?"

Uh, because NYC is the safest large city in America.

Tell me you aren't trying to use logic that because A < B, A is a low number.

WOW, thats bad logic.

"Prices have also fallen about 50% in Miami (the mortgage fraud capital of the United States).

Tell me whether you would rather live in NYC or Miami"

I'll take either over Jersey (Alpine's current locale) or Washington DC (where he hopes to move).

> Can you imagine DUMBO... without hipsters?

Yes, its called, uh... NOW.

Jersey guy, stop trying to talk about NYC before you've actually been here.

Ha we always get into attack mode [guilty]. Why do we keep coming back? Prices are falling and will continue to fall...where they stop no one knows, especially given the wild card that interest rates are. That it will stop near this level seems foolish to anyone with a remote command of economics. Manhattan will not burn like the old Bronx at 2001 prices or even 1998 prices. The burbs are not terrible if that's what you're into....neither are some of these other cities. Half price Manhattan is still the Rome of the Roman empire. And bankers and hedgies are still mostly douchy. And if they offered me this apartment at $600k I'd probably buy it...and if it went on the market tomorrow they'd ask $1.1mm.

The Big Apple was the Big Apple when Frank Sinatra sang New York, New York in 1977, the year the Bronx burned and the city was bankrupt. Nope, New York will never be Detroit, Stockton or anywhere else for that matter. It's a one and only.

not like the burbs are immune...this is happening everywhere. we would do well to start saying and meaning: "hey we've never seen this before...lets try to figure it out." it doesn't have to mean the end of everything...that's totally going to be up to us and our reaction.

The burbs are not immune at all...because when classic sixes are selling for $800k there is going to be much less demand for 3 beds in Larchmont. I don't know that any of this is up to me though! :) I will go on as I have, a cheap eff who thanks god he didn't buy when it was tempting. I'm not a smart man, but I know what momentum is. This market will tell me when its done going down!

my point exactly...none of us has a clue except a general sense that there is still a significant amount to go. could be one way that a lot of RE gets transferred from baby boom generation (through foreclosure) to next generation.

That would tie the loop now wouldn't it... The same could be said for their stock sold to fund their living expenses.

less clear with the stock because that hurts everyone's 401K regardless of age....but I suppose subsequent generations have more time to recover. oh well...time to be nice to my kids---remind them of how long i've supported them!

As long as the sunset from high up on Broadway is grandfathered when the $hit hits the fan, I'm staying. At the moment my living room is tangerine and the trumpet player on the street is about to begin his Saturday night set. Just in time for dinner.

Whatever you have in your 401k is one thing. But if you think about a 35 year old's monthly investments from here forward, and and a 65 year old's monthly redemptions from here forward...that is the wealth transfer.

"Nope, New York will never be Detroit, Stockton or anywhere else for that matter."

Some parts of the city already resemble Detorit: Willet's Point, Bed Stuy, Brownsville, East NY, Coney island, etc.

It is highly possible that it will look nicer, actually, after the storm passes. Some of the original dwellers will be able to come back. It will be less wallstreety and more artsy and down to earth. It will continue to be a tourist mecca. Talented laid-off people will create new business. But if the US collapses in the short term and China becomes the #1 superpower in the medium term, it will look and feel like Blade Runner.

Artists don't have enough money to buy RE in Manhattan. And good luck getting through the co-op board as an artist.

We are artists (though not in the visual arts.) Not all artists have no money in NY. We are paying cash. We are not the only ones.
Many artists work in applied fields with financial success.

The banskers are jacking me one way or another. I'd rather they do if from behind a bush while I walk out of my spacious condo I bought for $200 sq. ft.

bamslers = banksters

alpine, how obnoxious. i was told on this board a couple of years ago that attorneys, unless partner at the top firms, didn't have enough money to buy RE in Manhattan. that wouldn't have been you under another handle, perchance? you have some similar memes.

lets leave it at we have no idea what its going to look like.

can't i have just one more comment about turnip farming?

Alpine you live in the Jersey burbs right? WTF is your point. On this board you have people rooting for a future bargain and regretful owners defending the market. I can't figure your agenda other than being a not-funny jerk. You kind of defend the market but its not clear why. Then you put random groups down. You are a huge douchebag.

i know that i tend to be negative, but one trend that i'm seeing that is just great is a huge moderation in prices at restaurants. the wine bar may be an affectation, but it can offer superb value. many other great restaurant values sprouting as well, and service has improved immeasurably almost across the board. we have always gone to some really fabulous neighborhood places, and some truly classy high level ones where the service is always superb, but i'm finding lovely little places in NoHo, LES, Gramercy, East Village, etc. that are new and have zero attitude.

I live in Hell's Kitchen, not NJ. How many more times do I have to say this?

No wonder you're worried about crime. i lived in hell's kitchen for years myself.

I'm actually not that worried about crime. I have a 110 pound German Shepherd named Shadow:

http://images1.zillow.com/is/image/i0/i0/i387/ISywstgpxebxyb.jpg?op_sharpen=1&qlt=90&size=300,300

ok, i'll bite, so to speak. if you're not worried about crime yourself (AND ALPINE, YOUR SHADOW CAN'T FOLLOW YOU EVERYWHERE) then why are you promulgating fear among others? Why aren't you simply suggesting that we all get Shadows?

alpine, you're like a slithery eel, no matter what people call you out on you think you have a logical answer. but you don't.

either be fearful, very, and leave. or leave us alone.

I'm not worried about crime RIGHT NOW. However, I believe that crime will be an issue in the next year or so. That is what I am worried about.

Then move.

you first

Aren't you the clever one? But I like new york on many levels, and i think i'll like it more during a downturn. I've lived here with crime, and i could become a statistic, but that possibility will exist almost everywhere the next few years at a higher level. Being cautious and aware is nothing new to me, and likely reduces that statistical risk. I don't think we'll stay here forever, but we've probably got another eight years at least. Feel free to stay, but if you really don't like it, maybe you could join Rufus in Chicago?

Alpine, may I point out that all those stats you linked to at areaconnect.com don't show what you think. They numbers are all from 2006, at the height of the real estate bubble, and before the 50% drops in Phoenix, Miami, LA, etc.

"I would look into moving some place with a strong economy and a cheap cost of living, like Texas or D.C. Lots of work there..."

alpine - you are moving to D.C. isn't that one of the worst places in the country for crime? let me know when bloomberg gets caught banging low-rent hookers while smoking crack. that is when i will start worrying.

I have pointed out to Alpine on a number of threads that before, during, and after thsi and the last property boom that NYC had a lower crime rate than the other cities he mentioned, AND that NYC and the other cities' crime rates DECLINED all during the last property bust of the 90s, and INCREASED in the last two propoerty BOOMS in the 1970s and 1980s - so there is zero correlation between property values and crime in the cities he cites, including NYC.

This is an absurd conversation. I also did NOT mention specific cities; I suggested states where housing declines have approached 50% already. NYC has had a an extremely low crime rate for a long time, and I it would have to tick up pretty far to become a concern for me. Alpine, it seems like cities are what get your panties in such a twist, so move to your turnip farm already. You're starting to sound like rufus.

alpine292: You said this -

"Some parts of the city already resemble Detorit: Willet's Point, Bed Stuy, Brownsville, East NY, Coney island, etc."

Dude. Are you fucking insane? First off, East New York looks the way it does due to racial tension in the 1970s (so not a drop in real estate prices or some such bullshit) and Coney Island has been lauded as a sign of gentrification in an area that has been impervious to it since the Great Depression.

Not only that, but suggesting that ANY part of New York City will resemble East St. Louis is absurd, disingenuous and highly misleading. East St. Louis was built as a working class suburb, and with the decline of St. Louis as a whole - remember this was a city which, at its peak, was the fifth largest in America - East STL went crashing down.

A 50% crash in prices is logical and should be encouraged. It will allow for new development, new projects and new blood to flow into this city.

Right on youngbuck. Vacancies do nothing for a city. What you need to find is the price that keeps and brings people here...and its much lower than the current market, hence the massive inventories. This is sadly painful for the owners who need to sell at this time.

Exactly. No one is reveling in the drop of the prices of these homes and, quite frankly, its very sad as a lot of these people have worked like goddamn dogs to get where they are now. Unfortunately, real estate is so overpriced that its now completely unprofitable on an international scale. With land prices as they are, developers can't build new projects due to the fact that their base costs are so exorbitant that they are unable to sell to anyone.

finally...some reasonabelness...now, if only it were more than a couple of people on SE, we could get going.

A 50% drop puts us at 2001/02 levels, and I'm guessing that many of you lived here then. I did as well, and I don't remember the city being any worse or better than it is now. Yes, 1975 sucked, but that would mean about an 80% drop in prices, and I doubt that's possible.

That 50% drop equates to $700/ sq ft for a 2BR/ 2BA, which is in line with 2001 levels according to Miller Samuels data. Maybe if we could get back to those levels (or even a little lower), neighborhoods like the UES could attract some new, young buyers, and stop or slow the complete homogenization that's been happening since 2001.

Like it or not, alpine292, the 50% drop will likely happen. We've had a 25% drop already in a matter of months, and the popping of a bubble of this magnitude in an illiquid asset does not stop or reverse easily. Fundamentals (i.e., the cost compared to renting) will eventually put a floor on the reversal, but we are far from that still. Take a look at what's been happenning to the rest of the country. And yes, Manhattan is special, but that's already priced in: that's why NYC cost 2x the next most expensive city, whether to buy or rent, as has been the case for a very long time.

When prices drop 50%, most of the city won't care: after all, 70% of the residents rent. You seem to misunderstand the nature of the current economic turmoil. It's not like economy killed the RE market; the RE market killed the economy. We just happenned to see it in reverse in NYC. The economy probably will recover over the next few years, perhaps decade. RE prices on the other hand probably won't, inflation-adjusted, in your lifetime. That is the nature of a bubble.

If your unlikely "Escape from New York" scenario plays out and crime runs rampant like it did in 2000 when prices were at that horrendous 50% drop level, here's what happens. The scared renters will just pack up and leave. The scared owners will drop their prices even more just to leave before they get mugged. Then prices will be down 75%. Money will be lost, either realized through a sale, or through a long bleed in terms of overpaying vs. renting for years. Life will go on for the rest of us.

Upon a second ready, alpine292, I have to redact part of what I said above. I should have said "happening" rather than "happenning", and "happened" rather than "happenned". Sorry.

Err, "ready" => "reading". Yikes...

JohnGalt, that $700/ft in 2001 sounds way high. I think its more like $600/ft condo and $500/ft coop.

Rhino - $708/ sq ft for 2BR on UES in 2001. $676 for average of all.

Miller Samuel
Upper East Side
Manhattan
Co-ops + Condos
Average Price Per Sq Ft
2001 - 2001

2001
Studio 437
1 BR 497
2 BR 708
3 BR 1,108
4+BR 1,579
ALL 676

Hmmm. And this figure really reached $1400/ft? I don't recall anecdotally ever seeing 1200ft 2 beds trade at $1.7mm.

Disclosure for any owners out there: Even though I think prices may go lower, at $700 / sq ft, I'm a serious buyer...and willing to wait until we inevitably reach (and break) those levels.

On a related note, does anyone have any recent sales data for 2BR, 2BA on the UES with listing prices of <=$1mm? I suspect contract prices are much lower than listing b/c I have mentioned to a few brokers that I wouldn't offer a penny over 750k for a 995k listing, and they don't seem to be offended. In fact, they seemed encouraged by the fact that I was even talking "offer".

Thanks.

"They numbers are all from 2006, at the height of the real estate bubble, and before the 50% drops in Phoenix, Miami, LA, etc."

Which is more scary because now the crime rate in those cities is even HIGHER than the graphs show!

"It will allow for new development, new projects and new blood to flow into this city."

What are you talking about??? A 50% decline will not lead to ANY new devleopment because the builders will all be broke after taking massive losses on their inventory.

John, there are 1,100 sqft 2 bed coops being offered all over the Upper East Side for $800-something.

Currently the market is very illiquid - will get worse in Summer - most likely then we could see some panic by the sellers.
I am watching several UES buildings - in one of them there were just 3 deals signed within last 3 weeks NOT closed yet - all for 1 BR at around 1,000 sqft (maybe that will mean closing at 10% lower??), a 3BR after being cut twice was pulled off the market. Maybe it comes back tomorrow with another broker and a more ealistic price idea. I am not biting at 1,000sqft - I want to see 700-800.....

The city is going to look the same with several exceptions.
1) Dirty Dirty Dirty
2) close your eyes, throw a rock, hit a homeless person
3) Crime, the up close and personal kind, as opposed to the polite Madoff version
4) unoccupied real estate, that's right kids, the 1970's version (takes a while, be patient)
5) For Rent....every where you look, 2+ stores on every block
6) Private schools stop giving the finger to the parents who write the checks
7) the luster will be gone

Enjoy the city today! It is in the most repaired and fixed up condition that you will experience for the next 20 years. Take a walk at night and savor the feeling of safty, this is what I will miss the most.

falco, a couple of your items are true already. and the others, well, it's mostly just an increase in degree.

alpine, we're not talking immediately. if properties which sold for $500 per sf of building space, then had to pay $400 psf (and up) to build, well, they're at $900 psf not counting lending, sales commission and marketing costs just to break even. nothing will happen until some restructuring cleans out the overpriced properties. land prices have already tanked, as is appropriate.

This is a nice listing...but there is some game being played with the maintenance.

http://www.prudentialelliman.com/listings.ASpx?listingid=963458&utm_source=Streeteasy&utm_campaign=corporate&utm_medium=listings

Also its not the best block, but 166 e 96th has decent 2 bed layouts for sale...asking $900s but the same lines have sold in the $800s, so clearly $700-something is not out of the question.

Alpine - you said this:

"What are you talking about??? A 50% decline will not lead to ANY new devleopment [sic] because the builders will all be broke after taking massive losses on their inventory."

I hate to tell you this, but "builders" don't really matter. I'm presuming that by "builder" you mean "contractor." To get a successful construction racket going is simple.

If you're talking about developers such as Related, then you'll find they're relatively unaffected. Of course, a major developer will have some major issues in terms of future projects for quite some time but most of these guys are so diversified that they'll survive the depression. Steve Ross just bought the Miami Dolphins, and that's not bad for a guy whose company is solid but having some financial difficulties. At the worst, rental income and tax credits will sustain these guys for years. In the short term, its invariable that no new projects are going to be launched because they were damn stupid to build on overpriced land to begin with.

In five years, perhaps small projects will begin again and larger ones in ten years. Looking down the road, I think we'll be fine but until we as a country stomach the fact that everyone who bought real estate from 2001-2009 lost money, we're going to keep static in this painful cycle where buyers rightfully expect a 50% discount and sellers can't go that low without risking bankruptcy.

We now come full circle to the banks, who took these loans with the encouragement of the Federal Government, and are now saddled with billions of dollars of debt due to the real estate obsession inherent in this country. In reality, the contractors and developers are minnows in the economic pond because without a loan from a bank, they're dead in the water regardless. In essence, the entire real estate industry was so unbelievably corrupt and greedy that they ended up cannibalizing themselves with unsustainably high profits.

A price correction is a damn good thing, and the sooner that this country accepts that fact, the sooner that we will recover from this present mess.

The problem is the government is always going to defend the holders of assets and the values of assets. Why is it there is no low-risk 5% yield that I can find in the middle of a financial crisis. Its an effing joke. This is what price controls get you... Hold down the cost of money and money stays in the mattress, like my nest egg.

There's no reason to hide your cash in a mattress, but everyone should use something that all of us forgot during this boom time: our common sense. If something is too good to be true, it undoubtedly is. I remember taking a look at a townhouse in the neighborhood I grew up in and I simply couldn't fathom paying such a vast amount of money for the property. During this time, I kept asking myself two questions, "Can I rent this out if there is an emergency?" and "If I sold this in one year after renovation costs, could someone afford to purchase it?" In each case, I simply couldn't justify buying any property because I've worked damn hard for each dollar and I'm going to make sure that I conserve as many of them as possible. The time's coming soon though guys so just hold your horses until things get a little more desperate. I'm expecting an even bigger drop next year.

"On a related note, does anyone have any recent sales data for 2BR, 2BA on the UES with listing prices of <=$1mm? I suspect contract prices are much lower than listing b/c I have mentioned to a few brokers that I wouldn't offer a penny over 750k for a 995k listing, and they don't seem to be offended. In fact, they seemed encouraged by the fact that I was even talking "offer"."

I've put in bids on $800-900k 2bed/2bath apts in the $700k range and none have been even countered. This doesn't seem fair!!!!!!! Sellers are still delusional!

what will be the catalyst to bring the next big drop in prices? what event(s) open the floodgates?

sniper, I have a theory on this. Plagiarizing myself from another thread from earlier today:

"I don't think anything further needs to change in the NYC economy for prices to get close to -50% from peak. Prices are "only" down 20% (you'd get some takers for 25% and 30% as well, but the exact number at a moment in time isn't the point) because six months isn't long enough for the new reality to sink in and prices to adjust broadly to a level where there is a reasonably functioning market. It won't take more layoffs, etc., etc. to drive further declines. The only missing ingredient is time."

The percentages referenced made more sense in the flow of the other thread, but I think the point is clear. My answer on the catalyst is, "None needed."

yes, i agree that all the ingredients are in the pot and it just needs to simmer a while for the stew to be ready to be served. i guess what i really meant was - what will the catalyst be for sellers to drop the mirage of peak prices as a focal point of where they should be priced now if they want to sell? what happens in the minds (or pocketbooks) of sellers so that they finally get to the same page that almost everyone else is on? is that more clear?

For reference....From NYT 2000

http://www.nytimes.com/2000/09/03/realestate/if-you-re-thinking-living-central-park-west-every-front-door-great-playground.html?sec=&spon=&pagewanted=1

..."A starting price for a classic six in ''original good condition'' with a park view is around $2.5 million, he said. A classic seven, with one more bedroom, is $2.5 to $3.5 million. Apartments with side views -- or no views -- of the park are less desirable, and prices drop accordingly."....

Its important to remember that only recently has the 20% decline been put into print in Q1 2009 reports. That is the catalyst for the next drop.

Another catalyst in early 2010 is reported 2009 incomes in the finance industry (that will reflect 2008 bonuses paid in Jan or Feb)... Remember, you could still show 2008 tax returns that had your 2007 bonus in the figure to apply to a coop in Q1 of 2009.

Prices are not going to fall 50%. I don't even get why everyone is throwing this number around. Where did it come from? Stevejhx's ass? Buyers are not going to get 50% discounts and you can take that to the bank (just as soon as it passes the stress test).

"I don't even get why everyone is throwing this number around"

You are truly mentally ill. You started a thread with 50% in the title.

Alpine, you are out of your fucking mind. Prices have already fallen about 25% that we can document, probably more that we can not. Rosenberg, Whitney, etc. etc. are calling for at least 50% housing downturns (that's where it is coming from and it would mean 2001 prices in NYC, although we have tried to explain this to you OVER AND OVER AND OVER AGAIN), and that would imply that the larger numbers come from the greater appreciation markets while Iowa only suffers 20% Back to 1998 on a national level would be a 66% decline.

So we get more, because our gain was higher. Maybe Iowa for your turnip farming?