The rampant overpricing

yes, Saiyar! You are bright.

Prices across neighborhoods, size, and property type are all inflated now. Actual demand from 07-08 peak must be falling off, because unemployment is up, city services are down (and going lower) and supply of available housing is way up.

Yet prices do not reflect any of this.

Ergo we are caught up in another bubble that is being manipulated by sellers and sellers' agents. But it won't sustain itself for too long; it can't.

Don't buy now. Wait.

cheers, GG

Yes Saiyar, that's been the case for some time now. The reason they are 20% more is to leave 10% negotiating room, pay the 6% brokerage, and recover their purchase taxes.

The important thing is to keep an eye on the units with no mortgages, they are the sellers you "may" get to sell for less.
Any units that have paper on them the seller will not sell at a loss unless they are forced to (foreclosure/bankruptcy, etc.) These units will be "for sale" for 3 years or get rented instead.

Otherwise, it's about 10 year(+) owners (who didn't refi to the hilt 2/3 years ago) and/or new construction.

I knew I wasn't going crazy. As far as modeling out what the house it really worth, it's not that hard to do it to +/- 5% using "tools" as simple as google, to be honest. Just thought that I was missing something.

One thing I noticed was the "sweet spot" seems to be those apartments now selling at $1.5M. I think those are pricing the most fairly of all NYC real estate. I figure the people who bought a 2 bed 2 bath for $2M in 2006 are wealthy and may even be using it as a second residence. Either way, offloading a condo with $2.5k common charges a month for 1.5M (a loss of 20% or more) may make sense since they can eat a loss better than a person who buys a studio or one bed.

There are units that are priced way too high for this market, but there are also units that are priced to sell. I agree with truth that the seller's financial position and psychology may play a big role in what they are willing to sell for.

Truth is right - I bought a large one bed in the EV in spring 2007 (mistake on my part yes yes yes). I redid the floors which came out really nice (1K) and reno'd the bathroom (8K). I will never sell unless I know I will break even and/or make money. Right now, as "overpriced" as the EV is, I can't and therefore I won't be selling for a longggg time.

Hence short sale / foreclosure = market
-shrug-

The last go around ppl waited 15 yrs to break even. 30 yo to 45yo. Thatz a long time in a studio/1bdrm. Don't worry boys and girlz, I'm jumping rigtht over you lemmings and buying my kids 2/3 bdrms. Flmao. C u in 15 yrs.

Then what is the reason for the price intransigence of new developments? I have been to several condos in Manhattan and Brooklyn and inflexible pricing is all I encountered. All cash purchase, no buyer broker, etc. Have not found a single "bargain" in well over a year of searching. This bubble seems to be made of some pretty tough stuff - lots of pins, but it doesn't seem to pop!

A development won't sell until it is either A- making money or B - is forced to (foreclosure). So long as their lenders aren't foreclosing on them, and they aren't making a profit, they will continue to hold onto the product.

The lenders won't foreclose (and record a losss) unless they are forced to by the regulators. So until something pushes the market forward (or high prices return) no apts will sell.

AvUWS, so how are these developers paying their loans with no sales? So u r telling me that they are just sitting on interest bearing loans with no money coming in to pay them? They would rather have property sit for years instead of selling them at a discount? It doesn't make sense.

Not only interest on the loans, but the maintenance for the unsold units is the responsibility of the developer. I also mistakenly thought that the desire to move the "early units" and create some "vibe" would be greater than the fear of setting a low price point.

Buyers/sellers are in a stalemate. Prices have come way down already from peak, and many sellers' are probably at their limits (talking about those who don't "have to" sell due to divorce, kids, $ issues). At the same time, buyers still want to get the post-Lehman type deals and not willing to pay more.

I have also been wondering about this supposed stalemate in Harlem.

Dafina, and St Claire are just 2 fully built projects that come to mind; also fully empty because they were priced too high and no one bought!
So now they just sit empty for past 2 summers??
One would think somebody has some Construction Loans, Property Taxes, or something to pay off, so what gives??

And what about on the larger scale, where Sales move slowly in literally tens of New Construction Condo Projects around the City, that to some degree are ALL competing with on another for those who are in the market for New Construction Condos? . . . .
Are there not Construction Loans to pay off??

Is is just a [wink, wink] agreement between Developers and Bankers not to budge, and keep it off each others books until Sales just manage to start to Happen??

sort of a game of chicken?? -- who buys first??

SteveF - They don't sell them because most developers include in the development loan "interest reserves". Basically they also borrow the interest payments they will need for the first several years. This is all from Jeff at Urbandigs so I presume the information is accurate. I presume the original intent is to be able to cover interest payments and possible cost overruns until the project is sold. Jeff said that it is probably most of these interest reserves are due to run out in 2010 and 2011 (though people can find ways to stretch things when they have too. Pay this a little late, that a little late).

So they do in fact have the money to prolong things. They might have a bit more cash from the apartments they have already sold too.

Remember that the developers have also sunk money into the project. They can't sell bellow the lenders value without being foreclosed on. They also are not inclined to sell below the basis of their own contributions (hence a loss). So they wait it out as long as they can and hope things change for the better for them.

Lenox - that projects continue to be constructed is an easier one to explain. The developers still have their loan and hence the $ to build. If they stop mid-stream, some of the most expensive portions of the building (the land, foundation, much of the frame, etc.) has already been paid for but the property, especially if stalled, is worthless until it is done. So they keep building, hoping they will find a way to sell the complete (and more salable/rent-able/convert-able) building when time passes and it is completed.

Of course by that time they may only be adding to a flooded market, but ultimately the result would be the same, they would owe the lender regardless. Better to play for time and have a more saleable product is probably their thinking.