Prices going up?

buy now or be priced out forever

Hmmmm sounds familiar!

Buy now or be priced in forever.

Possibly examples of sellers expecting to get lowball bids, thinking that if they start from a higher price point they might get what they really want. Or could be mere delusion. Hard to know.

karen23, it seems that perception is changing to that the worst is over. Evidence can be seen in the sharp increase in consumer confidence for March. The finance media darlings are more and more indicating 2nd half 2009 positive GDP.(means recession over)

http://finance.yahoo.com/news/Consumer-confidence-soars-in-apf-15054028.html?sec=topStories&pos=2&asset=&ccode=

ev,

Its outright delusion.

Brokers will try all kinds of pricing strategies to see what sticks. This example does not mean anything.

steve,

Is this because the GDP has been lowered to create an illusion?

How is the recession over and the unemployment rate continues to increase?

Mumbotnyc, very true!

karen i noticed this too. i think that some sellers are feeling a bit saucy because of the increased number of contracts signed. i think the properties closed will reveal a significant decline from initial asking. if those properties really need to sell, they may be sadly disappointed shortly.

ev,

What is "very true!"?

AR,

I can always count on you. THNX.

I've noticed several Elliman listings that have been bumped up, then bumped back down by a larger amount - probably to get more impact from what otherwise would have been a rather small cut.

west81st, good police work there. oh the games we play.

i did like the idea of saucy sellers.

Thanks guys, I was beginning to panic there for a moment!

that it is outright delusion. The scenario I proposed is just another form of delusion, right?

mutom...unemployment always lags GDP(in both higher and lower).

"Is this because the GDP has been lowered to create an illusion?"
sorry dude i don't know what that question means....

Karen, did you really mean to use the word panic?

Steve; Whatever you want to call that sinking feeling in your stomach!!

karen..that sinking feeling that you missed your buying opportunity?

yup, that would be the one!

I expect prices won't be going up for a long time and, when they do, they will go up at a moderate rate.

The days of feeling that if you don't "buy now" you will miss an opportunity, are over.

karen, you seem like a really nice person. best of luck with your search.

Steve, were math word problems ever your forte? How about this. An economy tumbles for 6 to 9 months at negative RGDP of 6.6% annually. Let's start baseline economy out at 100 to keep it easy. Next three months, economy increases at .4% (no longer a recession). Where is economy relative to baseline?

Prices are not going up whatsoever in my searches.

Not to contradict the broad-spectrum info that is reported by the street easy housing tracker (yes, that is what I am going to call it), but I can sympathize with the thought that prices are "heading up", and my observations so far are thus:

Good units - renovated, reasonably priced, well-laid out units are getting bought, sometimes very quickly when they come on the market (they go into contract within a month)

Bad units - which are prettymuch the polar opposites of good ones according to the above criteria, languish for months and have been slashing their prices from astronomical ($550k for crappy 1brs?!) to still-high-but-totally-unreasonable and are making up the bulk of the inventory, so it LOOKS as if prices are falling dramatically on a macro scale, when in reality, the majority of these apartments should never sell anywhere close to the prices they are asking.

As a prospective buyer, I automatically mentally toss out all of the goners (the bad units), but perceive that the good units are all getting snapped up reasonably quickly - and thus, I "feel" like prices are increasing. That, of course, is not the reality for 90% of the inventory out there, but it colors my perception anyhow.

I lived in south florida and sold my home in '05 when prices were soaring...prices fell in early 'o6 and people refused to adjust their prices not for months but it took people 2-3 years before they adjusted their prices and same home as I sold went for $200k less...it's very painful and takes time to realize you're not going to get the sky high price...the same thing will happen in manhattan it just is going to take time.

Brokers are refusing to tell their clients to lower the prices. A unit I saw yesterday, where it has been on the market for a few months, the listing broker tells me the owner doesn't want to "give it away" so they are now renting the unit. I did not know making 20% in 3 years is "giving it away".

Excellent post on urban digs discusses this (seller delusion): http://www.urbandigs.com/2009/04/sell_in_may_and_go_away.html

"So, my advice to sellers out there now is to be very cognizant of where we are in the seasonal component of Manhattan real estate. This IS the active season and we ARE heading into ther slower summer months. If you didn't sell, or you ignored a bid because you deemed it too low, seriously reconsider what your agenda is. The market is what the market is and it has become increasingly more difficult for brokers to influence buyers to raise their bid and pay a premium for any property. Does it happen, sure, but there are 11,000+ units actively for sale in Manhattan right now and it is safe to say that most are having problems getting that strong bid in. If I was wrong, we would see a big tick up in sales volume and a decrease in active inventory."

Shout out to UD (or anyone else who can answer). during a normal year what is the inventory level approx. going into May, and for 2006, 2007 what was it? any ideas?

Karen,
Fear not the run away train. That train left the station in 2004-2005. All things now are slow motion. slow changes in prices, slow exchange of property. The time to hunt for you deal is now. It's the best shopping time if your not in a rush and if your slow and methodicle. You should know what you want, have you finances organized with personal practicle purchacing power knowlege (know what you can truely afford) and search for your deal. It's not going to come to you. Don't fall in deep love just deep like. Behind every unrealized deal is another one.

booyakasha, thanks for the market color.

However, "reasonbly priced" (as a requirement for being a "good unit") is subject to a lot of interpretation. How do you define it?

Well, I am opening myself up to flame wars, but for me (and probably me only), I think of the concept this way:

I've basically rented for the last 6 years, and have an idea of what my $ buys me in terms of rentals, over the last 6 years - and I have an idea of what my $/month actually gets me in terms of amenities, space, location, layout, and so on. I also have some idea of what rent increases were like during bubble years, when everyone and their mother wanted to move to NYC, and what they were like in slightly slower markets. I based my own criteria on keeping my monthly charges for maintenance + mortgage at a certain minimum discount from the rent I currently pay.

Could the average value of real estate fall from today? Of course it can - I will be the first to admit that I am not trying to "bottom fish" - the circumstances for me looking to buy now are somewhat unique - BUT I see the purchase of this apartment as a locked-in reduced rent for however long I want/have to live in it.

I met several brokers who have bought in the last 6 years for investment purposes. Actually, most of the brokers I met did. I wonder how much does this situation interfere in the way they price apts. I know of a broker that has so much invested in RE (in the neighborhood he works the most,) that he is not willing to price anything in a reasonable way....

mimi..it definitely does..again, time will adjust their thinking.

" I see the purchase of this apartment as a locked-in reduced rent for however long I want/have to live in it."

but...what will you see if when it comes time for you to sell, that including transaction costs, you lose 100 K or more? ca la vie?

"BUT I see the purchase of this apartment as a locked-in reduced rent for however long I want/have to live in it."

When rents are continuing to decline AND you can buy it cheaper, not sure thats actually worth much.

If you can lock in a $3000 monthly carrying cost but can rent or buy it in a few months for $2000, you overpaid for your option.

I agree with evnyc: look at the story about the guy going around making 50% off bids till someone took one. Whether it's Urban Legends or truth, it's almost defitely leed to a bunch of copycat behaviour. And some "more serious" buyers will use the same tactic, but just a lower discount price. they will look at 100 properties and make bids 25% off of every single one. they won't calculate individual bids, they will actually just make bids 25% off of every one, because they are trying to replicate the story. I'm sure that at least a couple of sellers and brokers are counting on this and it may actually work: in my years in RE, the bigger the bargain the buyer thinks he's getting is usually the worse they are actually doing.

You know, Julia, a colleague's inlaws are approaching retirement and looking at condos in Florida. Two and three years ago they were selling for $250k; now they are $50k.

evnyc...you are sooo right...prices in florida are crazy low but they will never go back up to what they were in '05 that's over.

Columbia, I am gathering from reading various threads that you don't think it's an appropriate time to buy. I can tell you that i am the opposite of that position, due to my own personal circumstances. Firstly: I am in a position such that I will never have to sell, period. Secondly, I am in a position such that if I do not buy now, I will not be able to buy for quite some time (I am headed to school). I am doing what is right for me and only me. You have to make the same determination for yourself.

If you truly will NEVER have to sell, and are young enough to be going back to school, I'd be willing to bet that even if the Armageddon which I think is going to happen actually occurs, at SOME point in the future your apartment will be worth more than you pay for it today.

30yrs,

I think that is more or less the rationale I came to. Full disclosure, I will have a board interview some time this week and I am hoping it turns out well (!)

it's time to buy ;-)

GDP dropped only 6% in Q1 - better then expected.

Stock market has raced 30+% off it's recent (generational ??) low, maybe it makes more sense to divert the RE money for the stock market abd stay in rent for the time being. Round trip costs are nothing compared to RE cost. And with the huge winnings one can finally perform an all-cash for a Fifth Ave aptm

HT1, if I could wait another year, I would, but the choice for me looks something like this:

1) buy now, live in it for ~7-8 yrs
2) rent for ~7-8 years, unknown if I would be able to buy right after that.

Sarcasm is a lot less witty when you don't have all the facts.

book.... just don't get knocked up or make sure the daddy has a 2bdrm first :)

Nah, I'd just kill it.

none of my business but...what is it that you'll be doing that would prevent you from renting for two years, and then buying?

Med school - I can't get a mortgage when I'm a student, and likely not even when I'm a resident after that, because I won't have as much cash then as I do now...never mind the fact that I have a working history at the same firm now for several years and enormous (relatively) tax returns to show for the last several years.

Hold the F up... you do know you are at the mercy of residency, fellowship, etc in determining your whereabouts.... WHAT in the world would possess you to buy now (in a down market) and w/ the hours you'll be putting in... just dorm it... it's alot more fun than pissing away your money.

Congrats otherwise...

oh god....deliver me..you want to get a mortgage now because you won't qualify in the future but somehow you'll be able to service it? shoot me now. note comment above as well. get a grip on reality. hopefully you are kidding about all of this. you cannot be for real.

p.s. if you are really going to med school, you're gonna be so busy and so tired that you could be living inside of tire and not know the difference.

yikes, my girlfriend went to different cities during residency, then fellowship and now she's finishing that up in 12 months and we're figuring out the next place to go...why not rent? Its the end of the world in NY RE! (heh)...if you dont do fellowship, by the time you're out of residency, depending on what field you choose, you could make some bucks, but that also depends on where you are.
yikes...good luck either way!

Pretty hilarious - you people assume that nobody can actually afford to go to med school. I won't qualify for a mortgage while I'm in school because I will have "no income" (or a significantly weaker income) - that doesn't mean I'm sweating about where money is coming from. You'll note nowhere did I say that I am worried about how I will service the debt.

Secondly, I'm at the mercy of no one.

So you have no problem leaving a unit, potentially unoccupied, during your residency? That would change the situation, but it would also make me believe that you wouldn't have any trouble buying then.

I don't have any trouble buying the unit - I just want the leverage which is only really available to me now.