Sales Unexpectedly Heating Up!!!!!

everyone who is looking at real property purchases and comparing them to stocks are confused. with stocks, you see the trend day in and day out. with real estate, the trend comes out 3-4 months later. the only way the non-believers will change their minds is by seeing the data in July-August-September.

if the rates remain extremely low, 5.5% or lower, there will be another flood of people in the fall. they will be reading about what happened in the last quarter or past few months and realizing that maybe it's time. the problem is that all of the apartments that were overpriced and were adjusted to market will be gone. there are a lot fewer people willing to list their properties when approaching winter. the buyers will most likely end up with an apartment that is not as desirable as the one they could have gotten for the same price if they would just look around now.

i predicted this bubble to burst, especially in Prime Manhattan and Brooklyn neighborhoods. the price increases year over year were just a joke. i also witnessed the Bed Sty, East Harlem, Newark and the like, fetching a premium for no apparent reason. now, you can see 100's of properties in those neighborhoods for pennies on the dollar due to foreclosures and short sales. prime manhattan will not see this nearly as much.

as long the time is right for you and the prices are right for what you can afford, go see places. don't sit there and wait for another 10-20-30% decrease, because it may never happen.

as wall street starts it's recovery, the slimmed down workforce will not suffice. job will become available and more people will be hired back into the workforce. never compare Florida, Nevada, California, etc to NY. NY did not have 50% of the market as flippers.

"the only way the non-believers will change their minds is by seeing the data in July-August-September."

"they will be reading about what happened in the last quarter or past few months and realizing that maybe it's time."

Both of these statement could as easily be applied to sellers as buyers. That July-August-September data will show a lot more volume at current (i.e., well below peak for most properties) prices and will show some (many?) people that yes, it really is possible for Manhattan real estate to decline in price. "maybe it's time" could mean time to get realistic and get the damn thing sold as much as it could mean time to jump in and buy.

since when does looking at lagging and flawed (lagging new dev deals posting from contracts signed many many quarters earlier) quarterly reports predict future direction?

UD, you don't think that if buyers and sellers see a decline in prices, regardless of volume, that could affect momentum? they are always flawed data sets, but people seem to react to them nonetheless. it seems to me now they'll be flawed to the downside, in terms of that stupid median sales price measurement, due to the availability of financing for conforming loans.

possibly, yes, but enough to move markets in a sustainable direction, doubtful. I think this pickup is way too closely correlated to surge in equity prices. We are up what, 40% in S&P in 11 weeks? That, combined with first price drop to comfort zone, is making deals happen.

But is this pickup alone a reason to sustain momentum? What happens if stocks reverse and fall 15%? I think what we are seeing is normal and expected for where we just came from. Markets dont move in straight line, and either you believe the bottom is in and that was it or you believe that continuing deteriorating fundamentals and unintended consequences still have a role to play in housing cycle.

UD, i'm actually arguing the opposite. sort of. i'm saying that proof of declining prices will lead to more declining prices. whether that translates into high sales volume is another issue, that is much more complicated and dependent on so many factors, as you point out.

It is not a feeding frenzy of buyers... but... (after much research on ACRIS for up to date sales and SE and others, looking at units now "in contract"

In certain price ranges, and certain locations within NYC the sales market is definately seeing a distinct uptick in units entering contract in the past few weeks (actually since just after Easter). Though there is an uptick in new contracts don't forget that moving from "no contracts" to "any contracts" is an uptick. The sales prices have experienced the obvious decline, more in some areas, less in others, based on price ranges - and locations. Yes there is more inventory - but some of the inventory is just not as desirable as others (you do have more to pick and choose from now, which is nice for buyers). And buyers need not be rushed to buy anything that comes close to what they are looking for - they can decide based on price, location, renovations, condition, view etc, without feeling that if they don't make an offer, and get a signed contract the unit will fall out from under them tlo another buyer.

I have been in contract to buy a unit in Greenwich Village since April. And I may be overpaying by 5 to 10 percent. But, I have not seen a comparable unit out there, since October, even with all the inventory, so I am happy that I found what I did, when I did. The unit is a "spare" not my primary residence.

Ironically, the unit right next to my future unit was on the market - and ended up being a mini price war, with one buyer (and his buyers broker) losing out to another buyer for "5 percent". The original buyer was "slow drawed" by the seller - so they could keep the unit on the market a few weeks longer (excuse was co-owner out of the country so contract couldn't be signed etc). They sellers then got another offer for 50K more. I was in fact called by the selling broker saying they had "an offer and contract out" - trying to get me to bid up on the price she divulged (I was already in contract next door and she did not know that). They delayed for over two weeks signing - and ended up getting the higher offer that they had been working. I feel they really were unethical in the way the deal transpired.

Is there a better term than SLOW DRAW for when a seller delays signing and returning the contract? SLOW DRAW is an old circus expression regarding the ticket sellers taking their time making change when given a larger bill than the cost of tickets - so the buyer walks away without his change. In real estate contracts and sales is there a different term used? Delaying contract return seems so simplistic and not sleazy enough for what it is.

"I think this pickup is way too closely correlated to surge in equity prices"

What's this! Stock market and housing is correlated? You guys need to stop cutting and pasting what i've been saying. So when one of the home town bears make a statement like that, it's cool da la...but an outsider bull like me makes it, it's consider nonsense, stupid, don't know what i'm talking about, etc. etc.

Typical...

Qtip, thank you for your frontline reporting. If possible, and it would be much appreciated if you could, keep us updated as much as possible. Thx.

ericho you miss the point. the jump in stock prices is giving some confidence to sidelined buyers. what the bears are saying is that this will prove to be fleeting. i'm afraid your recent purchase has blinded you to any objective reading of the market. it is a fatal mistake most small investors and neophyte traders make take off the rose colored glasses and see what is in front of you-a freight train heading in your direction.

cfranch,

"the jump in stock prices is giving some confidence to sidelined buyers"
So you now agree that stocks do have a direct affect housing market? I think 'confidence' is a key element on any distressed market.

Beside working with fix assets, i'm also an active trader for 10 years. My primary trading vehicles are e-mini (ym, es, nq) futures and equity options. Again, i've said it many times, the purchase of this unit is strictly based on my family needs. A 10-20% drop would not affect me one bit nor am i here to scream at the top of my head to make myself feel better about this purchase.
I'm here to merely toss some salads with the bears. These boards felt like a funeral the past 6 months. Most of the wrong-way bulls are in exile and humbled by this downturn. Even though there are mix signals of stability emerging from this economy, the bears turn a blind eye on it and refuse listen...stupid? probably not...naive..yes. If you haven't noticed, the arguments i used the past 2 weeks are now being accepted one way or another. On top of that, 90% of economist and even Prof Roubini himself acknowledges the potential of a recovery in this economy sometime this year.

"On top of that, 90% of economist and even Prof Roubini himself acknowledges the potential of a recovery in this economy sometime this year."

Not quite re: home prices:

http://www.rgemonitor.com
The State of Real Estate Around the World: No Signs of Stabilization?
RGE Analyst Team | May 27, 2009

RGE Monitor expects home prices not to find a bottom before mid-2010 with a 38% peak to trough fall.
But given the poor conditions on the real side of the economy, RGE Monitor sees a meaningful chance for over-correction that would bring prices down 44% from the peak reached in the first half of 2006 (S&P Case-Shiller is the reference index for these predictions).

And please don't use the...

"What does the economy got to do with REAL ESTATE prices in NYC?"

I truly hope bear will say that a return of a rip roaring 1991-2000 style economy will have no affect on NYC housing prices.

qtips quote..."But once people start seeing buying activity, it builds on itself".......remember that quote in 6 months when we have bidding wars.

"Word on the street is that..."

Word on the street used to be buy now, Manhattan only goes up.

Best part is, some putz saying "its busy out there" with nothing to back it up, and steve laps it up like the pathetic puppy he is...

"Qtip, thank you for your frontline reporting"

Frontline reporting, ROTFL.

I love how one shill is using the other as a source...

"qtips quote..."But once people start seeing buying activity, it builds on itself".......remember that quote in 6 months when we have bidding wars. "

I love it, Steve now QUOTING the shill.

Dude, you told us there would be bidding wars a year ago.

Whoops.

Throw numbers around like 10, 15, 25 heck 38% I have been buying real estate for 27 years. If I listened to my brilliant neighbors who told me I was paying WAY too much for a 4 story house I was buying in Park Slope for 165,000 in 1983 I'd have lost out on the upturn that soon followed. 2 and a half years later the house doubled and a half (that's more than a 150% increase to you math lovers) to over $450K and I happily sold it and moved up to the next level. That second purchase went to a 5X increase in a total of 22 years after moving into the neighborhood and raising my kids. So my 165,000 (20 percent down) investment had gotten me a brownstone worth several mill AND I got to live in it and collect rent every month. By the time I decided to sell at near peak, the tenants had been paying the whole mortgage for years and I was paid off. Free rent and hmmm... beaucoup benefits. You are all talking about pennies when it comes to housing... When we paid 165 we fretted over 10,000. That 10,000 is like the 100,000 of today, so even 200,000 or 300,000 here or there means nothing to time. If you love it, it has sound primo basics like good schools, parks, safety happy neighbors, then go for it and stop dicking around over a few hundred thousand. Those who are buying now will ABSOLUTELY see payback if they plan to live in it for 5, 10 years or more. Don't panic over waiting for the bottom- those who have to move or buy now are lucky souls no matter how you look at it. Sellers, stay away from bottom feeders who have taken over this board and haven't bought themselves a single house in their lives out of fear and ignorance. BUY when you can, enjoy the place and stop fretting over your neighbors' cash flow.

funny how qtip stopped responding to rationale arguments. busy open houses... so what! that's qtip's only metric. retarded...

I am bumping this thread to say that the uptick of the last few weeks seems to be dyeing down a whole lot. I think we have a case of the summer doldrums a bit early in the season. It appears that of the deals that went into contract, a lot have fallen out of contract. Evidence such as that presented by West81 about actual closed sales may be seriously affecting appraisals and banks willingness to lend. I think the remainder of the listings in contract will have no better than a 60% conversion rate to close. The remaining 40% will likely come back to market further depressing prices.

The reality is there is A LOT of inventory out there. Especially if you are looking for that nothing special condo, or special co-op, or whatever. There simply is a ton to look at and the best way to sell appears to be to price relatively low based on comps and accept a lowball offer (10-20% below ask). That sort of ensures you will get through all the problems that can arrive during what is likely to be a 3-4 month elongated closing timetable.

I mean it's really unbelievable. Buildings like 301 East 79, 220 East 65, are stacked with inventory. And nothing in contract??? Just crazy how these brokers are actually taking some of these listings. If the equity markets don't hold up, I think we are going to dip to early 2004 prices. I put as at late 2004/early 2005 prices already. I hear tomorrow is a big day...jobs numbers are out..

Urbandigs wrote 8 weeks ago (mockingly of course) on this discussion post after I had predicted an increase in sales activity at open houses and buyers phone calls to brokers:

"but marco_m, open houses are packed and phones are ringing off the hook? Stop talking about this reality stuff, Qtip doesnt like fundamentals."

And now urbandgis writes:

"Looking back at the past 8 weeks (limited by data I have available to me), 2,120 contracts signed is quite a lot! Its as if we saw peak-type levels of activity in the past 8-12 weeks or so with the first wave down in prices for our market. Talk about buyers coming in!"

So yes, Urbandigs, front line activity is a great indication of market activity. Your analysis of the "fundamentals" cannot possibly take into account all the variables, most of which are unpredictable. As such, your analysis of the fundamentals are simply guesses. I will take real time activity, especially on the front end, over your guesses anytime, anyday.

Qtip thanks for bumping and rallying the flag for the owners!

The positive sentiment (ny inventories, stabilizing credit, good tone to markets) is still weak gruel but its better than the alternative we have had for so long - and makes re-reading some of the 8 week old forecasts that much more amusing.