apartments don't seem to be selling

Yes it is.

Apartments sell when they represent value, either because they are rare opportunities or because they are priced effectively.

I closed on a condo on Friday...so there's at least one sold.

just put a new piece up with 2 more screenshots of charts from new system - it might clear some things up for about what is going on in the market.

http://www.urbandigs.com

The strength in this market is with prime properties priced to market. Mediocre properties priced to market are a harder sell because I think the jury is still out on where that market is. Many of these were caught in the bubble wave and have yet to find their footing.

Respectfully, in my very humble opinion.

its called the.....summer. Less people looking at open houses, more people enjoying life

@tojc516: Closings take place 2 to 4 months after the apartment has gone into contract. So anything that is going into contract TODAY will not show up until the fall.

As for the apartments on the market now, a good portion of them are overpriced and will probably remain that way until September 1st. It makes no sense to lower the price of your apartment when most people are out of town. When the fall market arrives, which pretty much starts at the tail end of August, expect there to be reductions en masse. Until then, most brokers will let you know their sellers are flexible but won't lower the price in writing just yet.

I always tell my buyers, if you see something you like, bid on it. What do you have to lose? Better to be the one person that low balls the seller instead of the 20 other people that came in and didn't bid at all.

(Matthew Russell - Brown Harris Stevens)

It will be a suprise if fall brings anything other than lack luster sales.
It will take more time but, this market will find it's bottom and it still has a way to go.

Wasn't last fall a complete surprise though? I really didn't see the strong sales number coming. Last year at this time the inventory was high, the sales had been pretty sluggish, so most everyone expected a blood bath. Instead, the sales picked up and the inventory tightened. I'm definitely out of the predicting business.

I think part of it is folks who were waiting to buy saw the worst of the crisis end, and 20% lower prices, and many jumped in. I think as that ends, you see a slowdown.

It's summer and no one's around. This is a very typical seasonal pattern for the real estate industry, and it's only with the rise of computerization that casual observers can see it.

August for a sales broker is typically spent divided between hitting the beach and pricing inventory for sellers who are looking to list after Labor Day. Two days in, that's exactly what my month looks like, and I predict new inventory and a resurgence of buyer interest in September.

Falco, I don't think a decent fall would be a surprise at all; we have jumbo mortgage availability now that's the best we've had in two years.

ali r.
DG Neary Realty

^^ and by "decent fall" I mean in terms of volume, not pricing. Mrussell's point about the inventory lag is sensible, but if you're an SE observer you probably don't see it because I think SE takes apartments out of inventory as they get signed contracts.

I expect pricing to be pretty much flat.

ali r.

Ali: you have to check the search input option 'exclude listings in contract' and 'must have address' to accurately get an idea of a submarkets' total active inventory:

Check this out for ALL UPPER EAST SIDE only:

1 - Without either option checked: 2,456 listings @ http://streeteasy.com/nyc/sales/ues-manhattan/
2 - With 'exclude listings in contract' checked only: 1,898 listings
3 - With both 'exclude listings in contract' + 'must have address' checked: 1,886

Nice to see not many 'open listings' (only 13), but ALL Active for UES should be around 1,886 level according to SE. We have it around the 1,600 level, likely due to rules we put in to exclude sale listings and other flawed listings set to ACTIVE internally.

sorry, meant to say, 'to exclude STALE listings' not 'sale'

the last ny re i owned was an apt i listed in early august 07--priced it properly and 2 live buyers (with wives ensconced in houses out east) attended quickly to my listing--had a contract by LD closed in OCT--list when you want to sell--price properly from the start--the first period of your listing will have the most play, regardless of season--don't ever set yourself up to be stuck with a stale listing

"The strength in this market is with prime properties priced to market. Mediocre properties priced to market are a harder sell because I think the jury is still out on where that market is. Many of these were caught in the bubble wave and have yet to find their footing"

Spin, I think you totally nailed it. I think this is the state of the market.

maly, leave the predictions to the professionals, like myself. Oh, I predict you will be under water by this time next year. Pretty ballsy, pulling out the "i'm gonna, walk" from my biggest purchase for the $150 differential in closing fees.. .way to score.

bf computerization, yes a schmo like myself spent the summers tilling the land as I did not know you could buy vegetables in a supermarket... oh my how far we've come... .

Oh, me thinkz the reverse reverse mental games played by the sellers, look at me "I DIDN'T" budge from my list price and I DIDN'T EVEN LIST TILL AFTER SUMMER! -is total Diaharreal advice that is so often given by the nyc borkerage industry, and is inappropriate for a market that is poised to nose-dive. pricing to be flat, flmao.... good one Ali, I needed a chuckle.

The laws of cash flow did not die in the summer. You will note foreclosures in nyc re actually picked up quite a bit of steam this summer, did it take a hamptons break? NO. We r down 20%, will we re-climb the mountain this year? NO

Closings are happening at 2005 prices, so on a nominal+transaction cost as compared to a 5 yr comp rental trade, ppl are getting their azzes handed to them on a piece of canadian bacon. But WTF, let's enjoy four more weeks of pathetic open houses.....

Enjoy the hamptons all you ppl who's got the "i'm gonna list after Sept 1" bubble over their head. Don't let the pending blood-bath limit the enjoyment of the lobster roll...

W67:
When do ya think we'll hit bottom? 2011? 2012?

"bubble over their head. Don't let the pending blood-bath limit the enjoyment of the lobster roll... "

... In Carrie they used a bucket, but a bubble of pig's blood sounds soooooo much cooler!

Is Carrie a borker? Are they all going to laugh at her?

Once again....
The Oracle of West 67th Street has spoken....

so it is written
so it shall be done

True, falco. I hope the Oracle addresses my bottom ..... question.

whenever it comes, the question is how to know. not necessarily the absolute bottom but what will everything look like when (hopefully) stability returns.

'I hope the Oracle addresses my bottom'

Hello bottom

What!? Is the Delphi oracle? It's not making any sense, $150, closing? Underwater?

Problem with knowing when the bottom will come is that there is a lot of mucking with the market "inputs". No one knew what the last 12-18 months would look like either because there was a lot of messing throughout. TARP, bailouts, purchase incentives, extend & pretend, etc. all mess with the normal workings of a market.

There are still a lot of other unknowns that have to play themselves out first:

- Taxes & Spending on the State and City level.
- FinReg. This one is complicated. The way it is written we won't know what it will look like for AT LEAST 2 years. If the environment is not as toxic to big banks/wall street and their lobbyists are allowed to maneuver under the radar, in 2-3 years Wall Street will start to look like the old Wall Street. If not, it becomes a slower industry and will probably work to deflate demand.
- Interest Rates. They will not stay at 5% forever. No one knows when it will drop but we do know that our RE environment currently is not built to handle a 6 or 7% environment.
- employment - Key. But mostly addressed by the same FinReg point.

There still aren't a lot of things that can improve the picture since the fear has already disappeared or is disappearing. But there a significant factors that can harm sales prices over time.

Who's bottom is that?

call me w6

dwell, just over-lay the last recession to this one. Started in 1989, didn't stop till 1997, but bulk of decline occurred by 1994ish. Note that was a magnitude smaller recession, but we do have a more "informed" buying public with much much much more live data. So ass in air prediction, 2013.... but also note, THERE WAS NO RUSH for SEVERAL years post bottom.

look at foreclosure to accelerate, lots of media coverage, and tons of hung listings...

fun prediction for september. Lots of musical chairs in terms of sellers shopping for new borkers. It's like a stage 3 cancer patient looking for a new doctor to tell her it's gonna be okay.

"maly

Wells Fargo credited back the fee after I balked. I think there are Fannie mae regulations, and reality. I found that negotiating the costs was very close to buying a car. Completely BS "let me talk to my boss" techniques followed by caving in when I threatened to walk."

my apologies, if you did not recently buy. Maly

That was 10 years ago, w67. We've been in the market to buy something else since 2007, waiting for the numbers to make sense vs. renting.

AvUWS, while I agree with all that you are saying, the fact of the matter is ppl pay a monthly nut, the ones that can't hold will fold by year 4-6... paradoxically the entire market will price in your worst case scenario and you would be okay bc a risk premium by way of a discount will be imputed into the mkt (in several years). Now IT IS STILL my firm belief that 90% of the holders on have NOT FOLDED, but will fold in the next 2-3 years, overwhelming the demand and liquidity that is still out there.... and might I say undershooting the market?

overlay last recession in the late 80's hugh? Except that this time around RE did all its tanking in the first 6 months as opposed to 4 years last time. Damn internet and no credit to thank for that. But hey bubba, there's a silver lining to every cloud; I hear Frigidaire is coming out with a special edition fridge freezer combo in classic avocado next year. Maybe you can start working on the landlord for an upgrade. Be one of the first, you know. The envy of the nabe, etc.

avUWS & W67: Thank you both. Yup, lotsa unforeseeable stuff, who knows how it'll all play out, but 2013 sounds about right.

"Now IT IS STILL my firm belief that 90% of the holders on have NOT FOLDED, but will fold in the next 2-3 years, overwhelming the demand and liquidity that is still out there.."

scary stuff, Oracle

spinny, If I could, yes I would "put a bubble around your PH." Erasure

Hey, Oracle:

Do you see possibility of elimination of mtg interest deduction in the next few yrs?

I still wish you luck bub, I just think you've oversold your hand.

Spin - the problem is your argument about the 6 month vs. 4 year actually works in a bears favor. Let's argue that it does take a few years for a RE bubble-bust to play out. Then having seen the market tank some for 6 months and then hold steady for 6-12 during a period of massive governmental tinkering does not bode well for there being a return to the past strength any time soon. If anything, it means that more correction has merely been forestalled.

There is one place to look for financial support. The rental market. If it starts going up strongly (no, stabilizing at 15-20% down is not a return) then you know the market drops have ended. We won't know where the rental market is until after August I think. That is when those still holding vacant apartments when the hot market is over have to decide how to move them. (Or you see if no one is still has vacancies.)

Maybe I'm wrong but I bought at distressed early 2000 price 14 mos ago and will enjoy the wait paying down a small mortgage rather than renting. QOL and all that. Luck to you as well AV.

As long as LL are making decent rent in Manhattan and interest rates are near zero, we won't see a serious break in valuations IMO. Foreclosures and short sales will drag the market down, but these are generally viewed as outliers. If they become the typical sale, it may be harder to treat them as outliers. Should interest rates change course, then we could see a more dramatic change in cap rates.

W67: 2013 sounds good as timeline. Consider too that by then, those tax abatements on the new condos that sold 2005 -2007 will be looming close enough to discourage new buyers. Combine that with the fact that we have not yet wrung the ignorant young out of the market who over leveraged based on their illusory incomes.

Take as example this apt in the Caledonia (ground zero for youthful, uninformed buyers): This apt #2105 is 828 Sq. Ft. New broker put it at 1024 to include the terrace but apt is 828. First broker, Sotheby's put it on the market for $1.4MM, obviously trying to get buyer back to even after transactional costs in the heady days of March tax incentives. When it didn't sell, change of broker, who raised price to $1.6mm -- for 828 SQ FT! This owner is either going to take a loss, walk away or raise the family in 828 sq ft.
12/18/2008
Previous Sale recorded for $1,196,443.
03/26/2009
Previously Listed by Sotheby's International Realty, Inc. at $1,425,000.
05/09/2009
Sotheby's International Realty, Inc. Listing is no longer available.
06/29/2010
Listed by Bellmarc at $1,595,000.

Kids never did like taking baths, but one point freaking six for 800 sq ft of the fabulous life?

OK 50% down from peak, I'm with you guys now.

Who thinks that Congress will/may eliminate the mtg deduction w/in the next 5 (+/-) yrs?

barney frank says it won't happen

Would imagine that there will be some type of phase out first with a cap. But, that will effectively do it.

$1,595,000.for 825 sq/ft
think about that
You could smoke $1,595,000 worth of crack and it still wouldn't make sense.

"This owner is either going to take a loss, walk away or raise the family in 828 sq ft."

Loan is only for $822K (30% down): I don't think "walk away" is an option. Sad thing is that it's a 5-year ARM at 6.875%, or $4700 a month in interest. When it resets to libor + 2% in 2014, it'll probably be cheaper, but for now they're missing out on 3.625% 5-year ARM jumbo conforming rates, cutting the interest payments in half. But it'd take $100K upfront, plus good credit.

I don't think "take a loss" is an option either: mentally, a person who's pricing this at $1.6M ain't got it in him to take a loss.

So, "raise a family"? Perhaps.

My favorite option, though, is "bleed it out and declare victory".

I don't know, crack has become quite cheap lately. Part of the reason the drug war in Mexico is intensifying. Like borkers getting spicier.

On mortgage deduction. They'll phase out 2nd home, boats and $500k cap gain exclusion in bits and pieces. But more importantly, elimination or talk of eliminating Fannie Freddie is long overdue..... It's on the December calendar. Flmaozzzz

Ino: did you get the loan info off Acris or public city records? Bleed it out till the tax abatement is up? CC's are $ 909 Taxes are currently $32. Will it go up to a thou? If so, it wipes out a good chunk of lower rates. If they are lower by then. But 30% down is impressive. I hope it is a rich relative that will take the downpayment loss. You can't wish it on young starter uppers.

67: They are all so freekin scared to even touch Fannie Freddie. Lift that rock and toxic bile will flood out. But when it is done, and they really gotta do it, credit will tighten like a........ well you can't even finish a sentence like that in your presence.

August is going to be like waiting for the curtain to open on the Showcase Showdown. What inventory is going to be behind that curtain that we get to bid on? Will those beautiful but insanely priced listings that decided to rent at a 2% cap rate come back on the market? Or, are we going to get the crappy showcase like a coffee table, a trip to Palm Springs, and a freaking AMC Eagle?

"But when it is done, and they really gotta do it, credit will tighten like a........"

We gotta get rid of Freddie's Fannie & create a new paradigm.

forgive me but...that's like saying we need to get rid of coal fired electric plants. sure do, but who will pay for the change and how can we possibly make the transition?

how much of the market do they currently represent? 90percent? Would you be willing to put your money into a fund to replace them without a government guarantee? I sure wouldn't.

Apt23, I got it off acris. Where are "public city records"?

The 30% down thing might have been because they were caught? I didn't check the contract date, but you can imagine they put 10% down pre-construction and then had to close or walk come late 2008. I could certainly imagine the "don't want to lose 10%" being in the mind of this buyer.

In any case, with 30% down they are running at $1000 or so monthly negative carry, maybe that increases to $1500 or $2000 as the abatement disappears. It's an amount that's easily doable for such a buyer (you'd hope at least that amount would be saved or put into retirement funds), so if faced with "locking in" the loss versus bleeding it out, many will do the latter and hope. That's what a long-term RE bull (and you should be one to have bought in 2007) should think.

w67thstreet
about 3 hours ago
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I don't know, crack has become quite cheap lately. Part of the reason the drug war in Mexico is intensifying. Like borkers getting spicier.

On mortgage deduction. They'll phase out 2nd home, boats and $500k cap gain exclusion in bits and pieces. But more importantly, elimination or talk of eliminating Fannie Freddie is long overdue..... It's on the December calendar. Flmaozzzz

Very helpful

Ino: Mortgages are also registered with the county clerk -- at least in Miami Dade County. I never tried to find them in NYC

cc, my grey brutha,
I'm not saying eliminate gov guar completely. I don't know how successor agencies should be structured. But, fred & fan, as they now exist, are broken & must be reconfigured.