Anyone know when they are coming? We heard April but that month has come and gone. As a potential buyer they scare the heck out of me. As a seller, I'd definitely want to unload before they get here.
Latest good article I can find is from March. http://ny.therealdeal.com/articles/going-going-gone-new-york-city-condos-could-hit-the-auction-block
The article makes it sound like there is a logjam/pricing lockage and that condo auctions are the only way for buyers to "see the floor" so that activity can start again.
Here is a New York Times article in which the chart at the top shows New York City remains the most expensive market since 1979:
http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html?_r=2&scp=2&sq=redc&st=cse The author writes: "They don’t have as far to fall today, but the great real estate crash is not over, either. So if you are part of the 30 percent of American households who rent and you’re trying to decide when to buy, relax.
The market is still coming your way."
Thoughts? Talk me down please. Or talk me up. Long term it seems obvious (or is it?) that the buyer will be fine. But a buyer doesn't want to buy just before the market falls off a cliff.
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Only five overpriced properties and one $15 million home. I think it's going to be a thud in mid-May when these properties are scheduled to be auctioned because no one will pay the minimum.
I am talking about real life big scale condo auctions in a hotel ball room. 30 properties in an hour and a half like the article says. Properties were auctioned for 20 cents on the dollar in Miami and prices are still dropping there.
New York City is different than Miami. But how different? Even if things were only half as bad here, we'd still see a big drop from where we are.
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Response by LookPied
over 16 years ago
Posts: 256
Member since: Mar 2009
I think the time frame of the price drops is the difference between New York and Miami.
The real estate market in Miami dropped faster 2-3 years ago with COMPLETED condos stagnating for a much longer period of time than in NYC. In downtown/midtown Atlanta auctions have just started to pick up over the past 6 months, and it's condos that have been sitting for 1-2 years. I think in NYC the market has just started the initial phase of the bust and large scale auctions will probably not occur for another year or so. Large scale auctions are in new developments which do not sell. In NYC these new developments which have the potential to be auctioned have just been finished recently or are in the process of being finished this year. So, I feel the auction clock has really just begun in NYC.
I'm looking in Williamsburg where there are several new developments recently completed or soon to be completed with no sales movement despite some recent price drops. My bet is that these types of areas will be the first to have auctions, but probably not for another year.
Word on the broker street is that most of the unfinished condos that didn't sell will be taken back by the bank and sold at 50 cents on the dollar to investors who will likely convert to rental and condo when the market returns. (like the Jasper in Murray Hill) All deposits will be returned to buyers, etc. Unlike Miami you have so many real estate funds who are interested in NYC ownership because they know the market always returns. The deals on these distressed condo buildings are already happening now. You are likely to see some auctions in Brooklyn (mainly Williamsburg) but the bank will take it back if the prices are too low.
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Response by aboutready
over 16 years ago
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what about the finished condos that haven't sold? in buildings with less than 70% sold, but with significant closings.
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Response by 026451
over 16 years ago
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Member since: Dec 2008
Interesting. I had heard from a broker that sellers were delaying the condo auctions to clear out the deals in the pipeline - otherwise those buyers who had signed a contract but not yet closed would walk in disgust at the low auction prices.
I wonder if the condo developers in NYC can hold out by going rental as you suggest. The rental market already has dropped fast. After they all dump that much more inventory into rentals thereby pushing down rents even more, rents might not be enough to carry them. And condo auctions in Williamsburg and BK could depress prices in NYC in any event.
And why did the NYT publish that article suggesting we could see condo auctions in NYC in April?? Same question for the first article I linked to in my first post above. Was it made up? Did a whole bunch of developers change their minds, and if so what made them - possibly the stock market rebound made them think people could afford more than firesale prices after all? What if the stock market tanks again? Will certain banks need to de-"stress" to the point of forcing developers to dump?
I guess there is a lot of uncertainty leading to speculation and possibly panic (myself included :)). Barring some awful terrorist event, NYC in 10 years is at least back to where it was a year ago. But in the middle there could be quite a sag. Your comments are making me think it will be an ironic "smile" shape rather than a Dick Cheney sneer/cliff shape. What is a buyer to do? Hold out another couple of years if feasible?
026451 there are auctions happening in May. Yes, bidonthecity is poised to fail because the number of properties they're scheduled to auction is tiny and their minimum bids/reserve prices are ridiculous, but the framework is available. If they're taking the trouble to set up the system is because they think it's going to be profitable, and have volume and be effective, at some point. I guess they want to be first out the gate. I don't know if they'll get burned because of timing. I mean, my bet is 0 out of 6 in this first batch.
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Response by 026451
over 16 years ago
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Thanks aboutready for the link to the great article by Jeff Bernstein. Sounds like there are a bunch of condo developments which are actually worse off than they appear because the rest of the units - on penthouses and lower floors - will have to be sold at firesale prices.
And thanks for the info Trompiloco. What auctions are happening in May? I can't find them. And 0 for 6 seems right to me on bidonthecity. Given the importance of first impressions, it's not looking good for them.
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they are already here. bidonthecity.com
bidonthecity is small potatoes. http://curbed.com/archives/2009/04/20/launches_releases_bid_on_the_city_ready_for_auction_action.php
Only five overpriced properties and one $15 million home. I think it's going to be a thud in mid-May when these properties are scheduled to be auctioned because no one will pay the minimum.
I am talking about real life big scale condo auctions in a hotel ball room. 30 properties in an hour and a half like the article says. Properties were auctioned for 20 cents on the dollar in Miami and prices are still dropping there.
New York City is different than Miami. But how different? Even if things were only half as bad here, we'd still see a big drop from where we are.
I think the time frame of the price drops is the difference between New York and Miami.
The real estate market in Miami dropped faster 2-3 years ago with COMPLETED condos stagnating for a much longer period of time than in NYC. In downtown/midtown Atlanta auctions have just started to pick up over the past 6 months, and it's condos that have been sitting for 1-2 years. I think in NYC the market has just started the initial phase of the bust and large scale auctions will probably not occur for another year or so. Large scale auctions are in new developments which do not sell. In NYC these new developments which have the potential to be auctioned have just been finished recently or are in the process of being finished this year. So, I feel the auction clock has really just begun in NYC.
I'm looking in Williamsburg where there are several new developments recently completed or soon to be completed with no sales movement despite some recent price drops. My bet is that these types of areas will be the first to have auctions, but probably not for another year.
Word on the broker street is that most of the unfinished condos that didn't sell will be taken back by the bank and sold at 50 cents on the dollar to investors who will likely convert to rental and condo when the market returns. (like the Jasper in Murray Hill) All deposits will be returned to buyers, etc. Unlike Miami you have so many real estate funds who are interested in NYC ownership because they know the market always returns. The deals on these distressed condo buildings are already happening now. You are likely to see some auctions in Brooklyn (mainly Williamsburg) but the bank will take it back if the prices are too low.
what about the finished condos that haven't sold? in buildings with less than 70% sold, but with significant closings.
Interesting. I had heard from a broker that sellers were delaying the condo auctions to clear out the deals in the pipeline - otherwise those buyers who had signed a contract but not yet closed would walk in disgust at the low auction prices.
I wonder if the condo developers in NYC can hold out by going rental as you suggest. The rental market already has dropped fast. After they all dump that much more inventory into rentals thereby pushing down rents even more, rents might not be enough to carry them. And condo auctions in Williamsburg and BK could depress prices in NYC in any event.
And why did the NYT publish that article suggesting we could see condo auctions in NYC in April?? Same question for the first article I linked to in my first post above. Was it made up? Did a whole bunch of developers change their minds, and if so what made them - possibly the stock market rebound made them think people could afford more than firesale prices after all? What if the stock market tanks again? Will certain banks need to de-"stress" to the point of forcing developers to dump?
I guess there is a lot of uncertainty leading to speculation and possibly panic (myself included :)). Barring some awful terrorist event, NYC in 10 years is at least back to where it was a year ago. But in the middle there could be quite a sag. Your comments are making me think it will be an ironic "smile" shape rather than a Dick Cheney sneer/cliff shape. What is a buyer to do? Hold out another couple of years if feasible?
Jeff at UD has a great piece on this.
http://www.urbandigs.com/2009/05/zombie_condos_fat_in_the_middl.html
026451 there are auctions happening in May. Yes, bidonthecity is poised to fail because the number of properties they're scheduled to auction is tiny and their minimum bids/reserve prices are ridiculous, but the framework is available. If they're taking the trouble to set up the system is because they think it's going to be profitable, and have volume and be effective, at some point. I guess they want to be first out the gate. I don't know if they'll get burned because of timing. I mean, my bet is 0 out of 6 in this first batch.
Thanks aboutready for the link to the great article by Jeff Bernstein. Sounds like there are a bunch of condo developments which are actually worse off than they appear because the rest of the units - on penthouses and lower floors - will have to be sold at firesale prices.
And thanks for the info Trompiloco. What auctions are happening in May? I can't find them. And 0 for 6 seems right to me on bidonthecity. Given the importance of first impressions, it's not looking good for them.