first 3-4 weeks of a listing, critical or not

Biggest problem I see are apartments that over-priced initially and then languish with no interest, only to then see prospective buyers punish the listing a second time even after the price gets lowered for being on the market a long time.

Disagree. I'd expand it to say 8 weeks. I see the first 3 weeks as a time for a seller to test the waters with 3 open houses. Having selected a reasoned sales price, perhaps just slightly aspirational, the seller sees what the response is. Are offers coming? How much below ask? Is there traffic and what are the people saying (good reason to have agent is people speak more freely as they wander than they do with owner present). If the price is right, you'll get a sense of it within a few weeks.

After 3 weeks, you step back and reassess based on what you've learned from the open houses and market response. At that point, if price adjustment is needed, you make it. You don't nibble it down every two weeks. You listen to the market, lose the "aspirational" thinking, and get very very real.

With a now better informed and very practical price based on the market (not what you hope/need to sell for) you continue to hold weekly open houses and within 30 more days should have the place in contract.

If you prefer to have one of those brokers who moves your place up and down $5,000 every week and does $10,000 price reductions every 3 weeks as your property lingers for 6 months on the market, then good luck to you.

interesting - in that initial period of over-pricing, though -- it would seem that any potential would-be buyers would test that price, no? overpriced or not.

languishing with no interest thereafter may be because the seller didn't entertain/accept whatever offers came in the first month or so. is this your sense, as well?

kylewest - fair enough. i hear you on the need to get very real based on what the market tells you.

considering the market is still sliding, or flat at best, it will be interesting to see how the "sticking to my pricing guns" philosophy of some sellers may or may not pay off when the market actually starts picking up

do you think the 8-week criticality will still hold its ground? (I'm thinking yes due to a shifted buyer mindset - just curious for your thoughts)

A buyer can always turn down offers. Under-pricing is the best way to test the market and see multiple bids. Of course just like cooking there's more than one recipe out there.

i don't think that you can generalize. depends a lot on price, location, condition, obvious or no comps, etc.

I don't think there is anything "magical" about the first three weeks. The important thing at any stage of the sales cycle is for a seller to listen to the market - buyer feedback on his/her own apartment, sales of comparable apartments, on-market competition - and for the listing agent to sensibly interpret what the market is saying.

New listings generate more interest than old ones, so there's more feedback in the early weeks than later on. The reaction of each potential buyer isn't more important, but there are more reactions to process, so it's important to pay attention to them. Later on, the feedback becomes more sparse, and therefore less informative.

I think it is somewhat relative to the state of the market. When the market was trading much faster, I actually believed that the first 2-4 weeks was critical. If you priced too ambitiously and missed the flurry of buyers who were waiting with baited breath for new listings, in a market that had few; you would have to capitulate quickly. Your listing could then quickly get buried, overlooked,"whats wrong, it did not sell after 4 weeks?"

In this market I agree with kylewest and actually explain this method to sellers regarding his time frame, "lets talk after 3 weeks and access where we are at", 1 or 2 open houses is not enough. After 3 weeks of speaking with brokers and their clients who have viewed the property, I can then give a better opinion as to where we are at.

Lets remember that it is taking approximately 100-150 days to sell an "average" apartment in today's market, so 4 weeks is less significant, in my opinion. Of course you need to price intelligently regardless...

It is difficult to discuss this, too, in a vacuum. It has to be assumed that all other things are equal if we discuss how the first 3 weeks of reaction should guide future pricinge. For example, I've seen countless people list their apt but not have the apt in a condition it will show well. Then, after pitiful results 4 weeks later of people fleeing open houses holding their noses, the sellers finally declutter, spruce it up, remove personal belongings like photos and bath towels handing to dry and visible laundry and children's crap all over the place and all the "shabby chic" oversized disgusting furniture that never fit anyway. Then the place sits another 4 weeks at the original price which was never realistic but the seller didn't pick up on that because the place was in such awful lazy shape the seller thought by sprucing it up the price might still be right. So weeks go by. And then these misguided noodleheads ask if the price should come down and agonize over it for another 3 weeks and then, even if they do a major mark-down, 90 days have passed and the listing is stale and they have themselves to blame.

As for offers in the first 3 weeks, I wouldn't worry. If an offer comes in at the first open house that the seller isn't ready to move on for 2-3 weeks, it may well still be there should the seller go back to the buyer since not a very long time is passing. This market just isn't moving that quickly. On the other hand, if the offer is anywhere near acceptable and the buyers seem well-qualified, I would not hold out to see if a few more dollars could be extracted in this market.

Actually I meant to say after "4 weeks" let's have our first hardcore discussion about where we are at.

Keith, some good points. Important to note, though that the "average" time to sell is just that--an average. It includes those units listed with every knucklehead broker out there who should be in another busienss. The average includes the impossible stubborn sellers who are incapable of being decisive, making a place look desirable, or agreeing to a rational ask price. It includes sellers who reject viable offers. It includes sellers who refuse to have open houses once the place is listing because mother is visiting that weekend, and little Johnny's birthday party is the next weekend, and it's too hard to get the kids out in the rain this weekend, blah, blah.

There is no reason a place has to sit for the "average" number of days. Do it right and it can move even in today's market.

great points all around :)

would you agree, from your perspectives, that in a sliding market, the longer a property's on the market, the lower the offers you're going to get further down the road? i guess where i'm going with it is that if the market is trending down, every additional month on the market hurts the seller that much more, beyond the staleness of the property.

arguably, the "price at or below market" theory in a downturn would be the most productive strategy.

i guess the real question that would follow, thereafter, is whether sellers are still seeing the market as sliding.

again, I think you have to acknowledge that there are many different parts of this market. The nine room prime park avenue apartment has little in common with a post war east of third 2 br. for the many apartments that have limited comps, it is difficult to say whether the market is continuing to slide down and is just reflecting the range in the previous slide.

kw you are right on the money. Many sellers are living in la la land regarding price, they need to erase 2005-2007 from their memory banks; some can, most cannot. I received three phone call from seller's in the last 2 weeks who interviewed me to list their home. I was not chosen based mainly on my pricing and of course to some extent the size of my firm;size does not always matter lol.

Now 4-12 weeks later they call me to complain about their broker, "They don't give me enough feedback,I get rubber stamped emails after open house's, they have their assistant call me, they don't care about my small home, they have multimillion dollar listings". NO, it's usually about price and of course the way it is presented. But this is an entire other thread...

Yeah, per columbiacounty, I have to disagree Honeycrisp with your repeated description of the market as "sliding". For example, here in the Village prices have largely seemed to stabilized recently across some segments. In Chelsea I recently saw a building that had 7 units for sale have 4 go to contract last month. So while the point about needing to avoid "chasing the market down" is pretty self-evident, the more relevant challenge is determining where the market is and is going.

First, understand the market and your place in it. Do your own comp/price research and weigh it against your unique personal situation to arrive at our own take away number. Then invite the brokers. "Testing the waters" vs. "must move asap" should result in two different pricing strategies and end result. So if you need closure within the first weeks of listing, then be aggressive. Everything becomes critical -especially marketing. I shake my head every time I see a new listing without a picture or floor plan. The points about preparing a home for sale are absolutely critical as well. Personally, if I didn't have multiple offers within a few weeks I would be worried. The last 5 homes I sold were in contract within two weeks, and definitely not underpriced. Though I'm not a "test the waters" kind of guy. If I make up my mind to sell I get busy selling and have little interest in months of uncertainty and throngs of strangers walking through my home.

The stupidest thing ever is to have a new listing that says "pictures and floorplans coming". Guaranteed to miss generating interest because at best people will assume that it looks like crap, and you've lost the hit on people's new listing radars, and the next time they'll look is when you do a price reduction. I.e., you've lost a large portion of your market.

That's why I like to save those aside until the pics come since it offers an opportunity to get something cheaper that would otherwise be possible ;).

so much of this is about emotion rather than hard data. two sellers receive full price offers in the first week after listing...one says, eureka---we got it right; the other curses the broker and says, we priced it too low. and of course, in their own way, they're both right.

kylewest ... so, from what you're seeing, considering that each neighborhood has its own dynamics (supply/demand/etc.), would you say that the bottom is behind us, then? (always difficult question, I know)

had a similar conversation with urbandigs not so long ago, and he (as we all are) is seeing stronger bids and prices versus this time last year. the question, as always, is how sustainable it all is. i suppose i'm trying to get anecdotal data on the longer-term (6+ months) sense that everyone has.

thanks :)

I would say brokers share some blame here. While they are locked in to a certain behavior due to "the process" I do see the following:
Owners selecting a broker based on his/her claim that they can maximize the price
Brokers targeting the new high price recently gotten in the building
Owners thinking their unit is better than comps and brokers unable to counter

First impressions are important, and you can't really make two first impressions. After
a unit has languished, prospective buyers don't notice this as a new listing, believe
its over-priced, wonder if there is something wrong with it and/or think the owner is not
serious.

"Is the bottom behind us" is broker-speak. Again, different segments behave differently although there are admittedly overall trends that emerge only over time. Is the bottom behind us for fringe areas with new construction? Nope. Not IMO. I wouldn't buy a place in LIC right now because I think it'll go down more. Same with Williamsburg. Harlem. Etc. They were overpriced to begin with even when things were good. If I were dying for a jr-four in GV on the other hand, there are some extremely attractively priced properties available now and since this is a market segment that's likely to rebound first, I'd think a lot more about making a move soon IF the move fit within my financial present and future.

The markets are still way too risky IMO though except for buyers looking to own for A MINIMUM of 5 years and even better 7-10. For a shorter time line I think you are INSANE to buy instead of rent and would be curious if any brokers on here recommend people with <5 yr time horizons should buy today. Frankly, it is quite possible that after 7 years you may be just breaking even--if you can't stomach that then I don't think you have any business buying.

Buying with a time horizon of less than five years was always risky. The commission and closing costs mean the unit has to increase 20%+ just to break even.

lets agree that there is no way to know whether prices in general or a specific apartment is going to go up or down in the future. that itself is a remarkable change as there used to be general agreement at least since the mid 90's that most properties in manhattan were going up--it was only a matter of how much and how soon.

kylewest - i'm thinking less semantics and more overall market sentiment and data, of course. i guess i am still skeptical of the market stabilization we're seeing (while clearly still bearish on emerging areas ... AND, in those more stabilized areas, i'm wondering if this is a bit of a head-fake - all theoretical questions, i know. that's why discussions like these are helpful to get others' input.

as for the time horizon, MAN do i completely agree with you and riversider. we were working with an "investor" who wanted a 7-12% ROI in prime Manhattan. Oh, and make that in the next 2-3 years .. HAH!

so...perhaps a tangent but.

what do you do with a prospective client like that?

Honeycrisp, I see prices as being fairly stable over much of the past year with two important caveats. Sellers have lowered their asking price closer to that of buyers and more transactions are getting done.

I think for people (Especially brokers) who are relatively new to NYC real estate(less than 10 years) don't have enough perspective to understand where we actually are, as the cycles are so much longer than their actual experience. Sure you can look up data, but real time experience helps with perspective. I have been a broker since 1990, I have lived here since 1981 and have personally witnessed at least three significant cycles, part of the reason I tend to be overly conservative.

As the bull market escalated we saw pricing, momentum dissolve into one point of light where location, view, condition meant little;everything sold. An example; I sold an apartment on Sullivan street in 2005 that had the toilet in the common hallway, old claw foot tub across from the kitchen, yes there were multiple bids.

A section of the market is strong, no doubt, I have lost apartments recently where multiple bids were being submitted. What I call AAA apartments where price, location, exposure and condition=AAA. As stated above if you have a 7 year time horizon and are solid in all the other important categories...buy if it suits your lifestyle. Really this is a good practice in ANY market....

Bottom? No. Stability in certain neighborhoods;yes. There is a very large inventory of homes sitting for 150+ days on the market with little hope in sight for a sale until we see price acknowledgment. I recently submitted an offer on a townhouse(on market for 6 months) in a marginal neighborhood for 20% below a 2007 comp, which I felt was very generous. Owner did not accept it, is priced near the 2007 comp, DELUSIONAL and she is not alone.

What we need is for sellers/developers to adjust their price expectations (perhaps shock therapy?)to line up with the CCC or Acc rating of their property, this is how a "normal" market behaves.

On another note I think pricing in outer boro hoods like Sunset Park, Jackson Heights and others is WAY out of whack, just my opinion.

As a buyer, I won%u2019t look at any apt no matter how nice during first 3-4 month. Especially in this market, let reality vs. expectations work in. That%u2019s my rule and I%u2019m sticking to it.

As a buyer, I will not look at any apt no matter how nice during first 3-4 month. Especially in this market, let reality vs. expectations work in. Tha is my rule and I am sticking to it.

ieb -all I can say is wow.

KeithB: "On another note I think pricing in outer boro hoods like Sunset Park, Jackson Heights and others is WAY out of whack, just my opinion."

I totally agree! Houses in certain neighborhoods are still asking peak level numbers and closing less than 10% below peak!

ieb - what if you find a perfect home, that is priced right and to sell fast and reflects a proper % discount from peak levels? you will not even look at it due to your rule? sure we all have our rules and nobody is here to say who's are right and wrong, but it seems to me that some quality properties out there that you may deem unworthy to view but very worthy as meeting your needs and price point, are going to contract in reality...

how do you explain that? I know 5 of my buyers contracted apartments in the last 3-4 months alone and found wonderful new homes that met all their needs and got proper discounts on all of them. 4/5 were newly listed apts as these buyers were aware of how the market was functioning after bidding on other properties and seeing for themselves the result after; and maybe just maybe, seeing that there are other buyers out there in todays market willing to PAY MORE than their own valuation for the product. But when a new quality property came in, they would see it. Does that mean they are wrong for doing so?

Or, are every one of your target apts overpriced and simply not selling?

I ask because sometimes one persons perception of reality and sell side expectations of this market, are not honed. Maybe its because of a buy side bias. Maybes its because they are not in this market, working buyers/sellers daily and seeing the changes with time. I know many buyers that FEEL a property is worth only X, and yet it turns out another buyer steps up and pays more - does that mean its not reality?

urbandigs, maybe ieb just don't want to be bothered by the opinions of buyers who already drank the kool-aid.

Are you suggesting that just because others are willing to pay $x, then $x must be the fair price for that home? It might be the market price at the time, but it certainly doesn't necessarily mean it's a fair price.

I think ieb is not really a serious buyer in today's market. If prices are closer to what he/she has in mine, I bet he/she will be checking out the place during the first open house.

Valuation vs price. Everyone has their own perception of value. But if a buyer and seller come to terms, for that moment, it's price. And if the market functions at a price above or below one's value yard stick, I think one has to accept that the market doesn't agree with your opinion. I agree with much of what Ubandigs is saying.

As a buyer, I will not look at any apt no matter how nice during first 3-4 weeks. Especially in this market, let reality vs. expectations work in. Tha is my rule and I am sticking to it.

Sorry, I just read what I said. 3-4 weeks, not months!

IEB I knew a nervous seller who relocated out of the country. They aggressively priced their apartment and sold it almost immediately. It sold cheaper than what it would clear for today. Based on your statement you would not have looked at it.

Sunday - Yes, I am a serious buyer but I just can not take the brokers speil. You know that as soon as you express any interest they go robotic with "we have multiple offers on this magnificent apt so you better up your offer", can't tell you how many times I've got that.

I've been looking for over 18 months and can say that I don't regret losing an apt for not being fast enough. There's a lot of property out there and selection is not a problem.

I admit that if there was a reason to buy sooner than later I would act differently.

ieb, I'm sure you are serious about buying, but when I wrote that "I think ieb is not really a serious buyer in today's market." the operative words are "in today's market."

Sunday - Do you mean that the situation has changed to a sellers market. Sorry, I don't think so.

UD – I understand that your really love your stats, but what is your gut feeling about where we are right now for the ny re market vs. the real economy, you know will be successful in kicking the can all the way out of this mess or is the pause that refreshes?

ieb, let's say:

- you went to see a place that is asking $1mm
- you think the fair value for that place is 800K
- you are probably willing to pay up to 900K
- you submit 850K or even 900K, but the broker want you to go higher...
- the place is bought by someone else at 930K
The above keep happening in the current market for you...

However, if the situation is
- you went to see a place that is asking $900K
- you think the fair value for that place is 800K
- you are probably willing to pay up to 900K
- you submit 800K or even 830K, but the broker want you to go higher...
-- you will probably negotiate and end up buying the place at some where between 830K and 850K.

You're a serious buyer in the second scenario, but not so much in the first...

ieb: you seem to have got us going. My two cents. Your "rule" IMO is silly. You treat a unit with aspirational pricing exactly the same as a unit priced to move immediately by heirs of an estate for whom any sale is 100% profit. Better than silly rules is becoming an expert in the niche in which you are looking and having a very strong knowledge of what is happening in the price points just below and above your target range. When the right unit at the right price comes along, you know it immediately and don't need 3 weeks to figure it out.

I speak from some personal knowledge here. For 2 years I studied my prospective market niche. I was so sure of my data that I lost one "perfect" apt because I refused to make an offer above what I knew it to be worth. That unit never sold and removed from the market by a stupid seller who now, after 2 years of renting the place out is completely screwed. But when the next "perfect" apartment was listed, I knew it would be ours. The price was precisely as I describe above--set to sell by children of an owner in a nursing home; they just wanted the $$ and weren't about to stretch out the annoying sales process to squeeze another 5, 10 or 15% from a buyer. We went back and forth once on price, our offer was accepted after 14 days on market and we went to contract on day 24. To this day we feel we made the right move and have no regrets as we sit in our ideal home. The price was so righty we were able to gut reno the place to make it 100% ours.

If we hadn't acted, we wouldn't be here. I don't see how a "wait 2-3 weeks to even look at a place" rule would have served us in such a circumstance, or how it is serving you.

And Sunday, your examples are kind of nutty. Why would you bid above what you believe the place is worth? Who does that in either of your scenarios? A dumbass buyer. Not a "serious" buyer.

KW - My other rule is that there are no rules.

Also, don't forget that as a buyer it's "your money", what an estate heir needs or wants should not be your concern. If you don't buy it now you may buy it for less later or maybe not.

I think that you have to harden your attitude, it's dog eat dog out there.

kylewest - i tend to agree - and this is why i found your initial "8 weeks" response interesting ... i figure that active buyers should place their bids on new properties based on what you are willing to pay, based on the value you place on the apartment.

though, to that very point, the fact that ieb is waiting past the first 2-3 weeks to look, which you called the seller's "testing the water" period, also speaks to that lengthening of the critical period.

kylewest, do you think most intelligent buyers actually get a place for what they believe the price should be? Don't they usually pay a little bit higher to out bid the others?

IEB,
You do not strike me as a serious buyer. Personally, I toyed with the idea for years before I made my first purchase. In the end, it wasn't based on cap rates, or a sense of historical valuations, but the following
1) rent vs buy analysis
2) a desire to have something a little nicer than they typical rental product
without throwing money away(i.e. blowing money on a rental with better
view. at least a condo with a view maintains relative value)
3) have more control and not be concerned with lease renewal and/or terms
4) have more control over living space

Forcasting prices is just that a forecast. I've owned for years and have saved thousands of dollars in the process and benefited from some accidental HPA.

ieb: I don't get what you mean. I don't care what heirs want to get. I care about fair value and making offers based on that. Where in my post did I suggest what a seller wants means anything to me? It may inform my negotiating strategy, but not my value assessment of the unit. The point is not to always ask "is there a possibility I can get it for less later." More intelligent is the question, "is this fair market value?" If the buyer is not looking to purchase around fair market value and instead seeks something way under (which is unlikely to be offered since it defies the very notion of markets) or thinks the market is dropping and prefers to wait, then he really isn't a buyer, is he? He's a future buyer and no amount of fair pricing will attract such a person today. I have no idea what you mean by "harden attitudes" and eating dogs. You aren't making any sense.

Honeycrisp: my 8 weeks ideas take this into reallity into account: most sellers need to start pricing at a slightly or very aspirational level. No matter the comps, all think their unit will do better and this feeling, for better or worse, must be recognized by brokers or the relationship won't work. The initial ask price shouldn't be stupid, but the broker would do well to have a game plan agreed to by the seller in which after 2-3 weeks a serious re-assessment will be done. If the seller was right and offers are coming and there's a lot of traffic with positive leads, then the seller gets credit for pushing the high price. That will pretty much never happen. If the 2-3 weeks suggests a downward departure, the seller should have agreed that that is what would be done in a good fell swoop. By broker and seller aligning their expectations as to selling strategy and pricing, the relationship can be fruitful for both. But when either plays a secret game the relationship fails. Brokers who indulge moronic ideas on pricing just to get a listing and think they'll later get the seller down to a sane ask price are probably wasting everyone's time since such sellers usually remain impossible to deal with.

but...that is precisely the current problem. it is difficult if not impossible to get comfortable about pricing in a market such as we now have.

Manhattan is a unique and there is a select group of beautiful world class apts and I intend to buy one. We took two years and looked at over 100 properties before buying our current home so I am totally serious. Maybe I have the luxury to step back and take a different perspective.

Except for cars ( I have a soft spot for car sales persons), I drive a hard bargain and like I said you have to be prepared to walk away.

Also, as long as the SPCSI for New York continues it’s monthly decline, what’s the rush?

ied - 3-4 weeks, rather than months, clearly makes more sense. my statement was in response to the months, not weeks. that is first. Second, although it makes more sense I still disagree with the rule, or logic. But thats fine.

SUNDAY - the market is the market and its always changing, there are deals at every price and the market does not operate in a vacuum. how one values real estate property is highly subjective and dependant on individual financial situations, ability to leverage, risk tolerance, emotions, needs, etc...Illiquid markets, like real estate, tend to do crazier things at times - just like what Manhattan did. Add in the emotional element of humans on buying a home to live in, and it gets even crazier. But to answer your question, if a buyer is willing to pay X and a seller is willing to sell at X, then X is the market value of the property AT THAT TIME THE CONTRACT IS SIGNED - eliminate that BUYER and the value to trade the property may be x minus y. Now whether or not forces that make real estate illiquid kick in to null the trade, is another question (i.e., appraisal too low, inability to secure financing due to credit worthiness, closing terms violated, board approvals, etc.)

Whether you personally disagree with the market is an entirely different story. Whether your formulas or standards of valuation diverge from market trades, is entirely different. With any illiquid asset class, the market can change week to week, month to month.. Perceptions of the buyers can change if some outside force influences the market, i.e. credit blowing out, lending rates adjusting higher, govt tax credits expiring, stocks falling 10% in a week, etc..

What Im trying to do is to see where the bids are coming in, as best as I could..a very challenging goal. Im just one man and I know that. Markets are bigger than all of us. I wish there was a way to find out where some deals are IN CONTRACT FOR before they close, but unfortunately only the parties included in the transaction are privy to that information (buyer, seller, brokers, lenders, attys, mgmt transfer agents, coop board, and whomever these people talk to..)

UD - Please answer the question - Where do you think the re market is right now? Not what your analysis tells you?

ieb - im quite confused and perplexed with the sustainability of this markets performance over the past 10 months. But this is relative to a VERY extreme starting point in early 2009 - a period in time where investors placed elevated risk premiums on all asset classes (I discussion Im working on for urbandigs.com for tomorrow)

So, Im not surprised at the progressive improvement from that extreme starting point..rather, the sustainability of the sales pace up to this point in time and some of the behaviors that come with experiencing what this market just went through; mainly a mini euphoria by buyers to secure a new home at the adjusted lower level from peak.

I have bigger longer lasting macro concerns on both the economy and Manhattan real estate. Those are documented on my blog. I feel this has been an unsustainable reflation, similar to all asset classes built on a fed engineered carry trade and search for yield. As all asset classes saw historic rises from this extreme starting point 1 year ago, confidence has risen and risk premiums have been priced OUT. Going back in time & place to 1 year ago, we overshot to downside as investors priced in risks relevant at that time. Fast forward to today, I feel like buyers' already priced out the very risks that caused the fast and furious adjustment process for Manhattan property...hence, the reflation. I now think this 'rate of rebound', for lack of a better phrase, has topped out and from todays market onward, I just dont see how much additional improvement in bids can occur. of course, if I was right on this progressive improvement over last 10 months, the next 2-3 quarterly reports will show that at a big lag and people will THINK the market at the time of report release has improved. When in reality, its highly possible this market stalls right when the lagging report catches up with the improvement I have been discussing for months from that extreme starting point.

In the longer term, I do NOT see a fast & furious adjustment like we had with Lehman failing. Rather, a longer more drawn out adjustment as the market gets less sexy in response to unintended consequences of policy actions taken to stem this crisis

ieb: a pattern seems to emerge here where you set up strawmen, knock them down as if you have made a point and press "reply". Where did anyone say there is a rush to buy. I and many other regular posters frequently, over the years, have advocated for prudent, careful, thoughtful decision making when it comes to NYC RE. The rule you describe above as "never look at a place for the first 3 weeks" is not prudent or thoughtful. Its weird. So far as looking, I too looked at 80 apartments before buying and looked at ads here and elsewhere for many times that #. That's part of educating oneself about a market niche so you are just repeating what I said in other words. I also essentially negotiate for a living and do quite well, so chest-beating about being a tough negotiator doesn't move me. You might check out http://streeteasy.com/nyc/talk/discussion/8657-negotiating-better-fundamentals-of-effective-negotiating for a very good discussion of negotiating.

There will always be people thrilled with shopping at Marshall's or Loemann's and who love to return week after week to see if the item they like is still there and marked down even further. That's just not my approach to life or RE but if it works for you that's great. To each his own. No need for any of us to change. My point is just that your points aren't really all that responsive or cogent.

Knowing that a property was listed and entered contract within the first 3-4 weeks should tell you a thing or two about the contract price, no? Of those that fall into this category one should be able to determine avg listing discount (if any) over time and use that as a quasi real-time market barometer, if only for yourself.

sorry, that was directed to Noah.

spinnaker1, would there be enough contracts signed within 3-4wks to be a reliable estimate for the market. Since 3-4wks is not the average time on market for an average home and the sellers and buyers might also not be representative of the average, what would those sales be representative of?

mainly tells me about the pricing of the property on the open market and the demand for the features the property has to offer. Ive seen times when a listing is in contract in first few weeks, but sells at a 10% discount to ask because seller just wanted out and took first bid that came in.

ieb - i answered your question in last comment

I should clarify this sentence: "I feel like buyers' already priced out the very risks that caused the fast and furious adjustment process for Manhattan property...hence, the reflation."

What I mean is, the buyers did adjust for the new world, but the last uumph on the downside was mostly the pricing in of fear and elevated risk premiums of future uncertainty..that last part was priced out over the course of the last 10-12 months or so. This market continues to trade at a discount to peak levels, but at an improved level from Feb-March 2009

To answer OP's question, it depends on timing. If you list in a high season like spring, the first three-four weeks are critical. If you list in August or December, when part of your buyer pool is out of town, not so much.

ali r.
DG Neary Realty

urban, do you believe we've seen a short term/intermediate term bottom?

yes, very likely only due to the extreme forces at play at that time

My thinking as well. I see nothing on the horizon the market has not already factored in.

For NYC, I think future short sales and foreclosures have not been fully factored in.

Sunday - take the same cookie cutter from the same nabe, one at 1M, the other at 1.2M. The first goes into contract within a month of list, the other was sitting for 4 months before going into contract. There's no guarantee that the market rate is now 1M but it's probably safe to assume it's not 1.2M. I don't think you need a lot of sales to determine a very specific market niche. People don't buy avg or mean. An appraiser would certainly consider the quick sale when establishing value. In this kind of scenario I don't think you need to wait 3 months for closing prices to be filed before making an assumption that for that type of property the market value is approximately 1M.

well lets be clear..there will ALWAYS be foreclosures, short sales, distressed sellers etc..but in this market with the buyer pool out there with an interest in this market, it will be 'pockets' of these types of transactions...now the question is, given what we went through and that consumer/developer deleveraging is likely to last for many years, just HOW MUCH OF AN INCREASE are we going to see out there and how deep and how long does that window last? Will there be a few great deals here and there, OR, will sales volume dry up so much over time that the market gets flooded with these distressed sales that it starts to impact the broader inventory as well - in essence, causing buyers to back away and wait to re-enter

Ill never deny that those stats are still on the rise, and will continue to be. for now, its not impacted the broader market in any meaningful way

i have to agree with Noah again. Things that might not be fully priced in (and for good reason they are not fully certain) are higher inflation and economic weakness and further decline of finance as an income generator in NY.

On a side note. This Lehman thing underscores the Republican argument against regulation. Lehman was regulated, and had three stress tests. In the end it did not matter.

urbandigs, your response is exactly the reason I think it's not fully priced in.

I think the government has been building a dam that's been holding off the foreclosures and short sales. The dam will crack and/or overflow at some point.

aha, Sunday I AGREE with that. The govt and policies TAKEN TO STEM THE CRISIS have in essence delayed the full deflationary onslaught that might have happened if they were not put in place. In essence, they delayed it and the goal may have been to make an orderly UNWIND of the excesses.

However, I do NOT see a fierce & fast adjustment from the risks you pose and I agree with. Rather, and Ill repeat this for the millionth time just to make sure everyone knows my views, I think the adjustment from the unintended consequences of policy actions taken to stem this crisis will be more drawn out and last years. I went into detail on those concerns on urbandigs many times. for now, the markets are playing to a different tune

urbandigs, the way I look at it is that if I'm totally wrong, I lose 0-5%. If I'm right, I save 15-20%. My interpretation of the data suggest that there's at least a 50% chance that I could be right. Even if I'm partially right, I'm not losing anything by waiting to see how things play out.

The risk of not buying today is paying maybe 5% more a year from now and financing at rates 100-200 bps higher than today. Weigh that against paying 5% less and paying 100-200 bps points more in financing or renting and seeing your rent go up 5-10%. I don't see a great deal of market volatility on either the rental or sales end of the market, but if you are going to buy 150 bps of extra financing costs does not sound worth waiting for.

Riversider, well, that depends on how much I need to borrow and how long it'll take me to pay off the loan right? I will either pay in cash or have a small mortgage that I will pay off in a few years. The small amount of interest I'm currently getting from the cash offset that a little as well.

It depends on the apt itself. What are you selling plays a huge role in how long it needs to be on the market. Because the target markets are so different. If you are talking a one-bedroom in a prime Village location, in reasonable condition, good light, views, etc. and one wants to maximize selling price and is listing at an aspirational price, I'm not sure that it is a bad thing to have it hang out there for more than 1 month or 2. What you want potential buyers to think is, yes, gosh, that is a crazy price but ruminate on how rare the product is, you have a very affluent market (face it, who else buys these apts) and what is the extra 100k in the long run for the perfect place. But what if you're selling a 2bed,2bath in a B location on the UWS? And you're competing with a lot of product and your market is someone who thinks even 700k is really too much to be paying on (hopefully) a way station to something bigger and better. Then I would argue that even 2 weeks is too long to gauge reaction. Because you have tons of comps out there, and it should be easy to price competitively out of the gate, and you're not going to get an aspirational price anyway.

Not sure how many unique one bedrooms are out there and if you want prospective buyers chewing their cud while they wait for you to lower price to market.

Yet another example. I know the mindset of the average Classic 6/7 buyer on the UWS very well (excluding Gold Coast CPW, RSD). It is a large buyer pool. The vast majority of these buyers are not going to be out-of-towners who will set another hard-to-rationalize sky-high comp. They've been shopping for a while, more or less know what the bottom line is for a classic X in move-in condition, would rather not renovate, don't need the drop-dead views but would like some light. A couple of O/Hs with no offers or serious interest would be sufficient in signaling that the apt is priced too high.

Riversider: there are not many. But I disagree with the one size fits all when it comes to gauging interest.

nyc10023. What I mean is that one bedroom's are more commodity than not, and easier to value. Plus you don't buy one, there will surely be another. There are only so many creative ways to carve up 600-1000 square feet.

Then you're in my 2bed2bath B location example. Depending on location, there is always a pretty big group of people looking to buy generic 1beds. They've comparison-shopped to death, know what their budget is, one or 2 O/Hs should let you know whether you've priced to market.

I see the value of having something on the market a little longer if and only if it is something that will sell no matter what at a premium to market for a more generic box, but the question is - what is that premium?

No, I think there are a fair number of 2 bedroom 2 baths. Market has an idea of what they are worth. Price to high people will skip over you and long story short 2 yeas later you will sell for 5% less than you would have.

RS, you're making a couple of big assumptions. very big.

the risk of rates increasing is quite real, although when and how much are still quite questionable. the other half of your risk equation, prices increasing, other than a blip or two, not nearly as likely.

or maybe you haven't been reading the stuff you post? keep pushing that agenda.

i have it from a very good source that foreclosures are increasing significantly in the NYC area. including manhattan, both prime and non-prime. good times. good times.

You are not reading what I posted.

exactly. among other things, the last year has demonstrated that there is no single market factor at work similar to the past when it was true that everything was going up. as you noted, the less special a place is, the greater the problem caused by mis pricing and the longer it sits, the less likely it is that is well sell. and as you also note the amount of the premium (vs. generic units) remains elusive.