I sense the RE dive is picking up again..

I hope you are right. Last week we bid on three places, opening bid 15% off asking price as advised by our broker. One place the owner wanted full price for a lovely apartment in Hell's kitchen priced at $1200 a square foot. Seemed high to us so we passed. Second apartment in upper, upper UWS countered 3% off asking, and we countered 10% off asking and then we realized where we were and that was the end of that. The third bid was a closed bid for a FIDI place that needed total renovation that would cost at least $400,000 and we lost that one as well. So we are now 0 for 7 bids so far, so forgive me, but I don't feel the seller desperation yet. I'm hoping I will soon though. By the way, we are all cash buyers!

have to stay the course right now. the market is broken and i think the offers will start going much lower.

What price/sq.ft. are you targeting NYRE Newbie? what areas? just curious...

Like so many others we are at that magic number 1-1.5million, at least 1000 square feet, anywhere but Harlem.

newbie
that should be easy on the uws -- if you look there are plenty of nice choices in that price range for 1000 sq ft - I think your target should be 1500 sq ft for that price or 800k for 1000 sq ft

'Like so many others we are at that magic number 1-1.5million, at least 1000 square feet, anywhere but Harlem.'

Very easy with that level of flexability.
This hunt should take 5 mins.
Hard to believe your having trouble locating 1000 sq/ft for under 1.5MM.
Try the SE search engine...you will be amazed.

This is not surprising. The pick up in volume of buyers looking is a simple seasonal thing, and now that memorial day has passed, I think people are realizing that this is the truth. I think what we had was a small bit of time wher everone thought the storm was over, but it was simply the eye of the hurricane.

30yrs - I highly doubt the three thousand plus people who bought in the last few months did so with the belief that the storm was over. While its highly unlikely that any were as market savvy and informed as yourself, I would hazard a guess that some came close and chose to proceed in spite of all the predictions. While their reasons may not mesh with your own, they are no less valid. I wouldn't be too quick to assume all buyers are neophytes dancing in the eye of the storm. I found my place on terms I can live with for a long time. My family's future in a great neighborhood and building is now set. So that ain't too bad.

the day I close in manhattan... it's the last you will hear from w67th.....

howz the drywall coming along... skim coating yet?

"30yrs - I highly doubt the three thousand plus people who bought in the last few months did so with the belief that the storm was over."

Perhaps not all of them, but of those 3,000 how many do you think bought with the attitude "I understand the market is poised to drop 30% more and I can deal with that"?

Just to clarify, I said, at least 1000 square feet. I heartily agree that bigger is better. At least 1000 square feet is where I cut off my search. I'm looking for a good price/value relationship. Obviously,in the better buildings in the better neighborhoods, the price per square foot is going to be higher than apartments in the more sketchy neighborhoods. But you may be able to get more square footage in a less than prime neighborhood. Lower monthlies also translate into higher prices as well. It is a balancing act. But my point is that I have not found desperate sellers out there. Bidding 15% off asking is not necessarily going to clinch the deal even in all cash transactions. I will say that I have noticed that the quality product in my price range from when I first started looking has improved. But I am hoping that this autumn the prices will fall further and my patience will be rewarded with more for my money.

Let me guess, you live in a six and installed a transporter in the maids room and just returned from 2011...? SUHWEEET!

I locked in my price at almost 20% below a 2005 comp. That number is real and represents my bird in the hand. Others maybe didn't do as well and I'm sure some did better. The broad brush theory of 30% (maybe, down the road, I hope, could be, you know what they're sayin') is even less meaningful to me than the median price number everyone likes to use. And when interest rates rise -if they do, how long will you have to wait for prices to reflect the new rates? Another year maybe? If by that time our economy starts another long run of positive numbers what will be the effect on the RE market? When will it feel "just right"? Maybe the efforts of many to find that sweet spot in the market is an attempt at a self fulfilling prophecy. An endless quest. I'm getting a sense that for some here there will always be a reason not to buy.

...and w67, I'm going to stick around and watch the hand wringing for a while longer (in between runs to Home Depot).

I agree with NYRENewbie. I have had similar experience in the past month. I am from Atlanta relocating to Manhattan. My price range is 2 - 2.5 M. Four properties we have had on our short list very quickly went into contract in the past two weeks. Making my wife very nervous.

It seems like that buyers suddenly came off the sidelines and put in offers at still very high prices. I personally felt pressured that the train is leaving the station and I need to jump on. I am sure the broker positive talk is fueling this.

Not sure if this up trend will last if (1) the buyer pool gets slimmer; (2) the stock market corrects a little and (3) loans are still hard to get. I just can't imagine that it would be easy for a lot of people to get super jumbo mortgages for co-ops especially. I am betting that this won't last but could be wrong. The market in Atlanta is going thru another downleg. But NYC real estate is like no other...keeping my fingers crossed.

not only is the pickup seasonal, but it was bullied by a 40% surge in equity indexes, a reflation trade, discounts from peak on the first wave down that many brokers claimed was never possible to begin with, and fear that low rates may not be around forever.

i doubt its sustainable and still call it a countertrend pickup in activity, the way normal markets work, embedded in a longer term adjustment process

kalakota - that little panicky feeling is how we all got into this in the first place (including Manhattan). I'm surprised that four units in that price range went into contract so quickly, although that price range is also one that's seeing some huge discounts right now (more expensive properties quickly floating down to $2.5MM) so perhaps there are just more desirable units in that range now overall than there were say, 6 months ago.

All data on the Manhattan market (even anecdotal data) point to a very limited uptick in transactions, which is exactly what you would expect given the continued lending restrictions, unemployment etc. I have no idea why anyone in their right mind would take out a super jumbo mortgage for a co-op in this current economic environment, particularly given that interest rates are back to around 6%.

In order for the "V" shaped recovery to occur in real estate, lending has to come back and so do jobs. It's just not going to happen otherwise and we think it's actually not going to happen period. So keep watching the market - not sure how long you've been looking, but eventually you'll settle in to noticing that most things on your short list just sit around. We're in a very different price range than you are, but check out our recent post on this topic:

http://downtowny.blogspot.com/2009/06/where-are-they-now-look-back-at-current.html

downtownster, check out the sale i put up on the downtown mmwc thread. 4 west 21. stunning loss. now i just need 260 PAS to do the same.

kalakota...."But NYC real estate is like no other"...never forget those words.

My feeling is that a lot of the buyers buying right now were preparing a year ago to dive into the market at then-current prices. Now, they can buy the same places more cheaply, or spend their intended amount and get even more. They've already waited as long as they can handle, so they pull the trigger.

In other words, they'd already established their comfort level and now that level has become even more comfortable. Why not buy?

Good for them. But that doesn't mean they're getting a good deal in the abstract. This was the busy season, and it feels to me like it's waning. As UD and many others have said, the next generation of buyers will have expectations based on lower comps and a still-slow market (inventories still continue to rise). The 'sideline' money on which the bulls' optimism is so dependent is just setting its clock now.

With macroeconomic conditions being what they are, I think patience will still be rewarded.

Each sale is unique - when we talk about trends in one direction or the other, these are aggregate numbers made up of thousands of data points. Within those data points will be people that overpaid, people that got a sick deal, and everything in between. At the end of the day, people do what's right for their particular situation in time. Those that try to time markets almost certainly lose. Those that live in homes they love for decades almost certainly win.

JKB -- you are probably correct. The prices for some trophy buildings - Grand Madison, Lionshead etc. are below what the last owner paid for and as a result seem attractive (boy - I am getting a good deal compared to last person who lost 15 percent in 2 years - mindset). But still overpriced IMHO.

Downtownstr -- I have been at this now for 2 months and I am getting tired. Flying in and looking furiously at properties for 2 days and flying back can be exhausting. Not a recipe for marital bliss.

What amazes me...is how quickly sentiment can turn and bring people off the sidelines.

sentiment is only going further to the downside. people buying right now lack discipline. july and august will break manhattan RE.

"Those that try to time markets almost certainly lose."

Really? I feel like quite the winner for not giving in to broker-and-media-induced anxiety and buying a lesser home for too much money in 2007, then watching prices drop and inventory grow.

"Those that live in homes they love for decades almost certainly win."

The stat that I remember reading had the average homeowner moving after 7 years. Not a long enough timeline these days, and I would guess that in Manhattan the average is less than that.

OTNYC, thanks, good summary. Those who find in retrospect that they overpaid aren't going to take the gas-pipe over it. Those who end up having gotten a deal won't be walking on air.

NWT, i felt pretty good in 2001 when I sold the property I had bought in 1996 for 3 and a 1/2 times what i paid for it. i might have felt better if i had waited (it was too small for the family, so not really an option) and sold it in 2007 for at least 8 times.

NWT, it's not just overpaying in some general sense. It's stretching and living with that stress on a daily basis, not to mention impacting future finances. There's also all the compromising people did, thinking they'd better get what they could while they could, before that, too, moved out of range.

As for "walking on air," I have no idea how low prices will go, but saving 25% (a given now in many market segments) is a positive life-changer for some, probably many. 30%, 40%? Forget it, a better quality of life forever. Not an overstatement.

Tenemental - good for you. You played and you won. By doing nothing, you can feel confident in the fact that you made money. I suspect you are in a rental you enjoy and that's all great.

When I said homes they love, I meant just that - multiple homes over the course of a lifetimte. I made a killing on a property I purchased in 2003, and the entire profit went toward an upgrade. If I sell the upgrade to move up again, I will be selling/buying into the same market. The biggest factor is really transaction costs, which you want to minimize by limiting the number of times you buy/sell in a lifetime - otherwise, if you upgrade or downgrade a home, you are typically buying/selling into the same market conditions.

Once you have owned a home, it is VERY difficult to go back to renting unless it is a temporary situation as a result of a relocation. As for stretching and living with stress, I am sure there are condo owners that did this and are suffering, and I feel for them. But as a long-time co-op owner and board member, I know that the co-op structure implicitly prevents people from living above their means. Even those that lost their jobs tpyically have 12 months living expenses liquid, which most co-ops require. As coops still constitute a majority of properties in NYC, I would venture to guess that most people are doing OK, not crushing it, but doing OK.

OTNYC, many coops didn't have such stringent requirements in the mid to late '90s, early '00s. Top ones, yes, but there are plenty of lower to mid-level coops that were letting people in with 20-25% down and not that much in assets. and back then, six months liquid might not have been that large of an amount.

many coop owners overspent in other areas. the hamptons come to mind. i know a number coop owners who are middle income and are having problems because of maintenance increases combined with increased living expenses. i know a couple of coop owners who have hefty HELOCs.

AR - if we are talking about buyers who purchased late 90's early 00's, they are doing just fine. They could unload at fire sale prices, make a profit, and rent comfortably until they were back on their feet. I have lived in a low-end and now mid-end co-op. As a board member on both, I set and followed policy. We required (and were required) to show 12 months living costs liquid (brokerage account is allowed). Yes, assets may be down, and some people may be squeezed. I don't have any experience with HELOCs, but none of my friends or building neighbors have spoken of them.

As for individuals having problems, I am sure that is the case. We are ALL (or at least most of us mere mortals) learning to live within our means. We had to skip a Spring vacation, and eat out less than we normally would. I suspect most have had to adjust. But for better or worse, the Fed came to our rescue. What this means for inflation, interest rates, etc. is above my pay grade, but I don't see the catastrophe that some people are predicting.

'i doubt its sustainable and still call it a countertrend pickup in activity, the way normal markets work, embedded in a longer term adjustment process'

exactly...

they're not fine if they've lost their jobs. one family I know has two kids in private school, the father owns a restaurant (not doing so well), and their maintenance has doubled. the apartment used to seem cheap, not so much any longer. they won't lose money, but when they sell, they'll probably do so below market. tons of people have apartments they can no longer afford, even if they paid little for them.

OTNYC, i guess it just comes down to whether you think there are enough buyers with enough cash to get loans to absorb current and future inventory. and whether you think there will be some moderately significant level of distress selling.

tenemental, I meant (and should've said) overpaying in the sense of paying more then than the place is worth now. Overpaying in the sense of more-than-I-can-afford is another story.