Sellers are *really* cranky

Any insight that you and other brokers can offer on sellers is most welcome. As a buyer, I have found that I consistently cannot read the minds of sellers and their brokers. I suspect that most sellers are patiently waiting for the spring/summer and hoping for prices to rise a little.

people thought prices would come back..now that they see that isnt the case, the mild fear is turning into anger.only gonna get worse

with most assets seeing a HUGE reflation, bids improved noticebly here in our market but not back to peak levels. Its hard for sellers to accept that they may have to take a 15-20% haircut, especially sellers that cashed out alot of equity from their home ATM and used for consumption purposes or to pay off short term debt only to refill that debt again in the past year or two.

Its always been and always will be all about where the bids are. To me, bids improved noticeably since feb-march lows from the adjustment wave we had. Sellers should be happy the market has been as resilient as it has, and not one that drifted down for years, nearing 40-50% off peak levels like some other hard hit cities were.

Urban.....the 15-20% haircut you mention is off what?

..and what do you think the outlook is ?.....your tone saying this market is "not one that drifted down for years"..sounds like a prediction

best I can describe what I saw in market was from discussion on UrbanDigs.com back in July:

http://www.urbandigs.com/2009/07/so_what_happened_since_lehman.html

The chart was my little visual to show people the fast, fierce adjustment from peak levels (which I define as contracts signed from early 2007 to late 2007)...then I think the market drifted slightly down for a while until Sept 2008 when the fast, quick move occurred.

That chart goes to June 2009. So now we are in DEC and I would say bids improved slightly more since then.

PS: as for predictions, I stopped those for Manhattan after the wave down took place. Go back to Fall/late 2007 and early 2008 content and you will see my warnings about the credit crisis and how it will likely hit our markets at some point. I just didnt know what or when the actual spark would be and occur.

UD, are you noticing "crankiness" too?

fluter..you sound like a nice person..but is there a pattern here?...sellers are cranky, buyers are fussy.....

:)

Lmao Jimmy. Yeah fluter. Plz conduct self-halitosis test.

One other thing fluter is a pErfect NYC re borker. Secretly hates both sellers and buyers but as long as she's making $ off them, no insult is too painful to bare or sticks to her Teflon embroidered thong.

"Sellers should be happy the market has been as resilient as it has, and not one that drifted down for years, nearing 40-50% off peak levels like some other hard hit cities were."

They should be happy that hasn't happened yet, but sad because this is where it's headed...

Yes slow azzed train wreck. Lmao, I really don't understand what is so hard about reading the tea leaves? It clearly stated on the bottom of my English gray in 5 different languages, 'beware the false bottom in NYC re' and 'tiger woods is gay.'

ionada - i think im noticing sell side optimism outpacing the improvement in bids. sellers have good information, assuming the broker is transparent and not hiding traffic details from them. Sellers should, and I stress should, know about private showing requests, open house traffic, the bids that are coming in, etc..they know way more than any one buyer that might be interested in submitting an offer. So, I like to think the seller and the seller broker can make educated decisions based on their pricing strategy, traffic, and the bids that are coming in - as to where their product may trade.

If a seller is cranky, maybe its for one of a few possible reasons:

1. They are not real sellers and are testing the market for a certain price above where market is. Cranky bids are not coming in there

2. They see tons of traffic and multiple bids in, but just below where they want to get a deal done. Its close, and they will accept one sooner or later, but cranky the bidders are staying firm at a certain ceiling

3. Cranky because activity is light and no bids came in - yet they want to sell and are anchored to peak levels

Im sure there are more reasons why they may be cranky. Its all about price to sellers, so that is why they are cranky - their optimism outpaced the improvement in bids for their property. They see stocks up 60% in 9 months, all asset prices inflated, and yet bids for their property are only marginally improved from fear months.

PS: Ill add that over the past 7 months or so, many sellers are not cranky anymore because they agreed to a price and sold, or are in contract pending a closing. Certainly cant deny the sustained pickup in activity (contracts signed) since Jan - early April period.

Urbandigs, your explanation as to why sellers might be cranky seems right on point to me, especially reason number 2. Do you feel that sellers are now waiting until April to either put their apartment on the market or to relist an apartment?

likely not that long but perhaps their motivation will be lower than normal to hit a lower bid until the end of Jan, Feb when market usually gets active again for a few months. If market gets active, and bids still are in same ballpark, they prob will bite - as long as they have real reason to sell

Sellers may also rightfully be cranky because some of the buyers out there are not qualified and simply should not be bidding on apartments they cannot afford. It is very irritating to waste time and money in contract negotiations waiting for someone to get preapproved or for an all cash buyer to show real proof of funds.

very good point lo888...the financials of the buyer usually do not come in until a bid is submitted, and the buyer may have requested 3+ private showings before even submitting an offer that may have been considered borderline or a risk to pass the coop boards financial requirements.

Telling a buyer they are not qualified or shouldnt be bidding is not an easy thing to do, especially in an industry where brokers are scrambling to get new clients, maintain loyal clients, and seal a deal to get paid. From a broker perspective, pre-qualifying is the first thing I do and buyers should not get upset when they find a good broker they want to work with and the broker in turn tries to get a financial picture together in case the target product consists mostly of coops.

-25% d/i ratio
-sig liquid assets after closing
-solid salary that can be documented; mostly base here, as bonuses are hard to use to justify getting below that 25% d/i for stricter coops
-clarifying that tax returns that show the salary and not a much lower AGI
-solid credit

etc..the most serious buyers won't hesitate to paint this picture for you, again, if coops are included in the search. No reason to find out 3 months later, and 30 showings later, that a buyer was never able to pass a coop board in the first place

As a buyer who has placed multiple bids this Fall and either lost the bidding or seen the apartments taken off the market, I can tell you that everyone is cranky! As a buyer trying to trade up, I feel like I have to be even more careful about not overpaying now than when I first purchased. I know I will not get peak for my trade in, so I damn well better get a fair price for its replacement. The only way to really know in this Market without great comps what something is worth is to come in low and see where the resistance is. And so the frustrations on all sides begins. There may be over 8000 apartments in inventory, but 90% or more of the listings are stale. I think most real buyers are waiting for something to come along to buy we might actually want. See everybody in the Spring.

Maybe it's that time of the month.

Flmao. Lo88888. Herez how I see the mkt playing out. Ton of inventory preening and collagen injecting bf bonus season (say march 10'), no sales for anyone near 05' prices. Mkt clears at 04' or 02' prices. Ppl that missed the sail, get desperate. Coupla can't show the cards bids fall thru late spring, summer, desperation sets in fall 10', I come in shaved and low balling at 50% of 09' original price, I'll get 10 yes, have a second looksie, pick the nubile Swedish nanny for 99' to 01' price.

And I won't be drivig my escalade into any hydrants 5 yrs later.

I've made 2 cash offers (not too low-ball) for a mega-loft (> 4,000sf), and the seller has come back with 1% off list each time, and his agent now says if he can't sell for 98% of list, he'll wait for the Wall Street bonuses next year.

He won't go lower than 2% off list! Somebody tell him this is not 2007!

I withdrew my offer today. There will be lots of new inventory to choose from after the new year, and very little cash in those bonus payments.

Well that is one carefully mapped out fantasy 67! For your sake I hope you're right, although I think you'll find you missed out on the desperation boat back in March 09. Sure seems to be a bunch of c6's and c7's hitting their numbers north of 1000psf fairly quickly these days.

67, ...so...what's a specific barometer of your scenario...any particular building you watch?

could you post some listings on the c6's and c7's hitting their numbers?

Complete lack of fiber.
ISS is Irritable Seller Syndrome
Let's face it, a regular monkey is a happy monkey.
Sellers are jammed up.
This town needs a enema.

Simple solutions to every day problems from your friendly neighborhood falco.

Falco..do they do enemas on premises at Corcoran, and the other big firms?..

Why sellers are cranky: I won't repeat what UD has already has said, but you get a sense of what's going on with what ziptalker adds:

Everyone, buyers and sellers, have always "over read" any news in RE, and both only need the very slightest push to think it's "their" market. Take a lot of the talk on this board as an example: you see a lot of "cranky" bears that the market has not fallen as much as it "should have", and they tell everyone not to buy as if it is a fact that prices will fall another X%. Then there are the cranky bulls on this board because the market hasn't rebounded as much or as quickly as it "should" be doing based on some metrics which they think "prove" the market is going to go up.

____________________

David Goldsmith
DG Neary Realty

So, the answer as to why sellers are cranky is, as usual, the fault of the Brokers and News Media who reprint anecdotes as if they are documented trends. So what we have now is sellers hearing of tons of buyers, multiple offers, bidding wars, selling above ask, etc. What they don't hear is that it is ONLY on apartments which priced themselves "ahead of the curve" (also read "below market"). So what sellers read into it it is that ALL sellers should expect to have those same tons of buyers, multiple offers, bidding wars, selling above ask, etc. But they aren't getting them. What also makes them cranky in Fluter's case (because if I'm reading it correctly, he's talking about sellers who aren't on the market yet because he wouldn't/shouldn't be sending canvassing letters to units which are already on the market with another broker) is that they have heard the same stories and called their own brokers already hoping that now they will get that price they were looking for when the took their apartment off the market, only to be told "things are great! we're getting multiple bids, tons of traffic, bidding wars, etc. but we need to price the units at $(X - 20%) (X being the prior price) and be proactive and get ahead of the curve!!!!" by a very enthusiastic broker.

But that's not what they expected or wanted to hear. Cognitive dissonance often makes people cranky (as I've noted of people's posts here on SE). So after hearing how "great' the sales market is and getting their hopes up, being told "yes everything's great as long as you are willing to lose all your equity" (which is the case for anyone with less than 30% equity at the peak, and some even more than that. Remember that we have to include both transaction costs and "aggressive pricing") certainly breeds that cognitive dissonance and certainly leaves these sellers who were actually expecting GOOD news.... well.... cranky.

oopps... sorry about misplaced sig spot

They should be able to accomplish this at most firms considering the large number of douchbags just sitting around doing.......................nothing.

She sighed, wiped her brow, and turned to Harold, and asked, "honey, why does every thread on Street Easy sooner or later end up in the gutter?"

end up in the gutter?

That's where I'm starting!

Harold will tell you...Life is like bowling...the gutter ball is the only sure thing.

For cc, SE felt my reply to your request for examples had too many links and thought it was spam. Look for yourself. 67 already knows....

Thanks, UD.

30yrs, this is a gem: "yes everything's great as long as you are willing to lose all your equity".

yes metamucil!

jimmy.. on psf$ basis, Lincoln towers as to lower end and 1965 Bway as higher condo end.... enough units to be liquid and sq footage seems "knowable" at least.

Spinny.... some of us can be "patient" w/o resorting to the withdrawal method... she'll feel like you're using her as an experiment... they find it much sexier when you can outlast THEM.

So the only trades IMHO that are happening are the "so scared gotta beat the buyers bf the I-bankers get theirz" buyers and the "my bonus suks, i better seld" sellers... either way.. they are perfect for each other...

I'll get the popcorn ready. Anxious to hear all about your 50% conquests. Wifey covets air shafts maybe?

More from urbandigs on the subject of crankiness
http://www.urbandigs.com/2009/12/is_manhattan_getting_cranky.html

Of course sellers are cranky... we have SteveF here every day to demonstrate.

last 8 months: closings up and activity strong, inventories down substantially, prices up slightly - and this all before bonuses were even awarded or people knew the stock/cash split. yet the head in the sand bears like W67, About and Rhino still calling for further 30 % declines - based on what - an ability to write pathetically smug 4th grade level sexual banter?

prices up slightly?

has been documented endlessly that inventories are down due to pulled listings. listing continue to outpace closings.

> and this all before bonuses were even awarded or people knew the stock/cash split.

Printer, you're illogical here (no surprise). This is backward. Folks already anticipated the bonuses. The news has been to the downside, with more regulation and less in cash. Pretending thats good news is... well... not so smart.

"has been documented endlessly that inventories are down due to pulled listings. listing continue to outpace closings."

columbia, on the first point, I wouldn't be so quick to dismiss that. It's true, but it doesn't mean those listings will return. The second point is equally important and seems to point towards inventory staying at about the same levels for a while.

based on my ivy MBA, 5 yrs in i-banking/commercial banking, 20 yrs in NYC RE, 4.0 in undergraduate Econ/Finance, 3 languages, $1MM in cash, avoiding the greatest NYC RE bubble in 2003-2008 when I had 2 children and a uncanny ability to make good financial calls....

your expertise is in the 300% return in 1989 to 2007 from you hamptons home and nyc apt... guess what printer.... ANYONE who got in Madoff in the first 10 yrs... thought they KNEW how to pick the FUND MANAGERS....

sounds like the putzes who thought themselves geniuses because they picked the right dotcom stocks in 1999.

somewhere - clearly you don't and never have worked for a bank. until you've had your meeting, no one knows with enough confidence what they are getting to actually make purchases, especially major ones like real estate. and this year especially, with all of the politics around bonuses, no one who wasn't guaranteed (and even some of them) could really say what would come out in the end. so my logic is perfectly sound - which is that no one has made purchases based on 2009 bonuses - there was way too much uncertainty to do that.

yes columbia, per Urbandigs, which is the closest we have to real-time pricing in the market, prices are up, slightly and of course with variations in neighborhood, price pt, etc., since the spring. and the whole 'pulled listings' canard is tiresome. we would have seen those listing re-appear after labor day if those people were truly looking to sell. but they didn't. because they're not serious. which means it isn't inventory. if they aren't planning to sell in a normal timeframe (say 6-9 months), at prevailing prices, it is meaningless. just like i wouldn't call someone who is 'looking to buy' at 30% off of current prices a buyer.

really? printer.... all the media attention to the record profits being earmarked for bankers had no effect on NYC RE? r u kidding me? You don't think that every borker and seller is thinking spring 10'? in nyc re?

I literally over-hear ppl in the elevator spewing that crapola.... trust me an anonymous blogger who is not afraid to make predictions.... the spring selling season for NYC RE will be a bust. 2005 prices clear at this moment... in 1 yr it'll be 2002-004 prices.

so...in the last 30 days, according to your guru: 848 closings, 1,183 new listings. more people testing the water? and noting any kind of increase since the spring is dubious at best; since the spring represented the lowest of the low when many actually thought the world as we know it had come to an end. one would hope that we would be up from that point.

so now price increases don't count if they are from the bottom? please tell me what the point is that i can measure from, that will fit your thesis as to how the world should be. face it, if you are a buyer, you missed out, in pricing and inventory selection, buy not buying in the spring.

inventory is down by 30% or so from the spring peak. and anyone out there looking will tell you that for realistically priced properties the drop is even greater. twist it any way you want - those are significant numbers.

price increases (which as i said are dubious) from a time of virtually no sales volume are not the issue. the question is:

1. is the data about ongoing new listings out pacing closings accurate and if so, what does it portend?
2. what will happen to nyc since other than some firms on wall street, everyone else is continuing to bleed?

and while we're on the subject---how long can wall street continue to make money while the rest of the country dissolves into a morass of unemployment?

how many units do you think got pulled bc they and their brokers believe that 50K newly $1illionaires are gonna go buy a pad this spring?

i confess to not having even tried to understand the inventory numbers, but I do have a firm observation, based on looking many times at a few buildings over the last say nine month, and I wonder what this meeans in reference to the investory debate:

easily 3/4 of listings were priced in lala land , so they were hardly "available for sale" in any normal inventory sense.....

just an observation

sounds like printer is really cranky, too.

Bitter renters vs bitter owners vs desperate brokers... it's chaos I tell you. I think we all need to calm down, enjoy the holidays, have a great New Years and then... get back at each other's throats... :)

http://www.commoneo.com/pictureman/pictures/Main/Architecture/origin/case_shiller_april_2009.jpg

Update: I went to a listing appointment this week, great apartment, reasonable price expectations by seller ($1.2 mil). I do hope I get the listing because I know I could sell it.

Very pleasant seller, seemed serene, certainly not bitter. Seller wants to offer over-and-above, unusual concessions to get it sold fast...well, OK. Yet says he's in no big hurry to sell if he can't get his price. Renovations just completed in November. Does not compute.

When it was time to leave, I shook the seller's hand, and it was just slippery with sweat--as if he just got off a treadmill. Yet the apartment was so cool I had kept my coat on the whole time.

My heart goes out to these folks, it just does. I know, it's only money, it's not a cancer diagnosis, I shouldn't care, right? ....but I tell you, I would do anything I could to help a man like that.

{Manhattan real estate agent.}

{Manhattan real estate agent.}

So Fluter...if in fact you get this listing, you have just told us all that your clients hand was dripping with sweat. You have given us information that could work against your client's best interests. I know that to many people here "fluter" is anonymous, but anyone who was curious could figure out who you are in 2 minutes. Smart?

> Bitter renters vs bitter owners vs desperate brokers...

Except the renters aren't bitter anymore.

They're on the right side of this market, and reaping all the rewards (reduced rent, better apartments, and, uh, not losing all their "equity").

"When it was time to leave, I shook the seller's hand, and it was just slippery with sweat--as if he just got off a treadmill."

Bitter, or scared sh*tless. Great set of choices.

"Except the renters aren't bitter anymore.

They're on the right side of this market, and reaping all the rewards (reduced rent, better apartments, and, uh, not losing all their "equity")."

Quite the generalization. And the implication that you *were" bitter? Look, the "bitter renter" or "bitter owner" accusations are silly. People should do whatever makes most sense for them, financially and otherwise. But this is par for the course for you, of course.