Orgasmic Inventory Explosion

Dear Inventory Gods:

Please flood the market with beautiful apartments, preferably in my price range but I'm happy to share with shoppers at higher price points. I'm talking hurricane-style flooding. Because the stuff out there right now is *terrible* and it would be nice to have both a decent selection AND a reduction in price.

Thank you in advance for your cooperation, real estate gods.

Moving on to predictions: I clearly desire a flood of inventory and reduced prices. Therefore, it is highly likely that the exact opposite will happen. Data is rendered useless in the face of my bad real estate luck.

Happy shopping, all.

I've been looking at places for over 7 years, and have never thought NYC RE was cheap. I don't think I ever looked at a place, and the word "bargain" came to mind.
I doubt Sep will change anything.

Who are you? otnyc

inventory predictions? will see a surge in inventory between labor day and month end. this will mostly be absorbed by pent up demand (* note evnyc above).

price predictions? prime manhattan resales will trade within a 5% range for the sub-$3M market; new dev and luxury market will likely trade down 5-10% as additional shadow inventory is released to the market.

What fortune does the fall hold for those interested in the RE market? Each transaction is unique - those who have been patient and looking for a home, not an investment, will find what they need provided that are liquid enough to take advantage of it. Those looking to play the market will be disappointed.

evnyc, I love your letter to the inventory gods. While you're at it, though, pray for reasonable sellers. I second evnyc's prediction about the correlation of prices and buyer luck.

Rlmnyc, thank you. If they actually worked I would write more letters. You probably don't want me praying for reasonable sellers because then you'll get the opposite. Sigh.

@broadwayron, how have you spend 7 years looking? That's inconceivable. Was it painful to see the market basically double while you were looking?

captive - if there's a "bargain" to be had, broadwayron will likely spot it. I don't think 7 years is so bad. by the time we are ready to buy (if we buy in NYC), we will have looked for at least 6 years. Of course, most of this occurs online, but still, you get to know the market.

I've bought 2 places in those 7 years (sold one, and still live in one). But, I'm always looking, and I've never found much inventory in my "range". Granted, my price range is pretty low, and I'm pretty picky, but my SE search produces maybe 1 new place every other day, and they are rarely impressive.
I've looked at hundreds of places, though. All these people who keep talking about excess supply... in the last 7 years, that has never been the case for me.

"September is right around the corner...literally"

Uh...just to be a douche, you don't mean "literally," you mean "figuretively." The former would mean that as I walk around the corner to my car this afternoon I would actually encounter something called September.

Yeah, and I can't spell. That's "figuratively."

I think that you will have increased sales, not necessarily rising prices though (as nice as that would be for people like me and for sellers). And you will have new listings, but not necessarily a flood. The listings that will decrease in price will be the ones that have sat and languished on the market. The newer listings will hopefully be priced in line with the market instead of shooting for the stars as sellers have had a tendency to do as of late. The market will normalize for a while and then we may see a rise in early 2011 where things are actually worth a little more and not just being listed at an outrageous price. That's my 2¢.

(Matthew Russell - Brown Harris Stevens)

Have been looking without success for nearly three years. I would think that things will shlep along, with seasonal adjustments, through the Fall. The only sudden changes seem to be of the price decrease variety, and are tied to major news stories - the Bear Sterns panic and collapse, etc. Other than that, more stale, deeply unappealing, or horribly overpriced apartments.

evnyc, I'm still laughing from your comment on an earlier discussion about the "tidal wave" of new inventory coming in September.

Lobster, always happy to provide some levity!

evnyc, I see stand-up comedy in your future. You're getting a fan club on SE, and all without trashing a fellow poster. Cheers.

Aw, shucks, thanks, but I'm really too shy for stand-up. I much prefer trashing myself before anyone else gets around to it - and I do have my snarktacular moments.

rlmnyc... r u fking making fun of me? WTF?

MRussell... nyc would like it's education back... and for the love of ALLAH, pls tell me you didn't take a spot at a specialized HS or an IVY... pls pls pls...

If September is when the market really picks up, around what time of the year do things start slowing down?

mj201... i just pulled that thumbs down for that stmt.. .itz NYC, its 24/7 all the time....

Apparently, the thumbs are there to rate bearish or bullish market sentiment -- not whether or not you like a post.

w67, I am certainly not making fun of you. I'm a pacifist and uninterested in stirring the pot here. I'm merely praising evnyc. No insults for anyone.

How do I give someone the finger?

SE can you add a finger pls? thx.

@spinny...

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Sunday, the most beautiful drawing on SE. Bravo!!!!!!

Yeah, on my iPhone, it thought it was middle finger up and down. Flmaoz.

Sunday....my hero

That's some serious keyboard dexterity sun, is it copy righted? Can I have your permission to use in retaliation for a thumb?

I can only take credit for the timing/delivery, not the actual design.

w67thstreet
8 days ago
ignore this person
report abuse Sunday, the most beautiful drawing on SE. Bravo!!!!!!
Yeah, on my iPhone, it thought it was middle finger up and down. Flmaoz.

Hey big boy, "thousands of people have touched [me]" but I prefer your finger

So...I'm waiting, very patiently, and so far there has been no explosion of inventory. In fact, it has been a wee, tiny trickle - only one or two new listings in my price range worth looking at.

Oh, and the open houses I attended yesterday (Sunday) were packed despite a downpour of rain. In fact, at one of them two would-be buyers were drafting an offer letter at the kitchen table of a half-renovated apartment. You would have thought the mortgage implosion had never happened. I am not even looking in prime Brooklyn any more: anywhere fringe with a halfway decent public school and a reasonable commute to Midtown will do.

ev - I say it's shaping up about as expected. As Steve Martin wisely once said, "let's all get excited and go to a yawning festival."

Yeah. Sadly, my little plea to the inventory gods was rewarded about as expected.

"In fact, at one of them two would-be buyers were drafting an offer letter at the kitchen table of a half-renovated apartment."

Don't tell me you fell for the old broker's-cousin-impersonating-an-interested-buyer trick...

Sideline, it wasn't a trick, and anyway it wasn't going to work on me since that particular apartment was well out of my price range. I was there scoping out the building because another listed apartment was not having an open house that day - although just for a sadomasochistic form of entertainment, I do track apartments in that price range.

It was a joke...

I'm sorry. Feeling a bit down over the whole experience. Contemplating a number of alternatives as the buying prospects look increasingly bleak, including the big one: moving away from the city entirely. Don't want to, but paying ever-higher rent and enduring ever-longer commutes are not great options. I lost my sense of humor for a moment!

ev - have you totally ruled out walk-ups? i know it's not ideal w/ a baby but it's totally manageable with just one. we did it for first 14 mos with #1. i'm sorry, this is none of my business. i'm sure you've considered every possibility imaginable. i hate to see you out of options at such an exciting time.

I think the word trickle is right... but that should hopefully ramp up as the month goes on. I was expecting to list two new apartments and a price drop on Sept 1st. The only thing that happened was a price drop on that date, with one new listing on the 8th and another new one today (which hasn't hit the system yet). They are trickling out, but at least the things I have just listed are well priced.

As long as the things coming to market are appropriately priced, that is a real improvement in my opinion.

Pre summer '09, the great spike in new listings were on Mondays, post summer '09, the spike came on wed/thurs. Given Labor Day and the early jewish holidays, the next 2/3 days may be interesting. And next week after Yom Kippur will definitely be interesting.

UWSmom, yes, walk-ups are out, though I thank you for the thought. The entire point of buying is to be able to stay for longer than 14 months. We've looked at a number of first-floor options in walk-up buildings but they have all been horribly depressing. We want nothing more than to raise a city kid, particularly since we grew up in the sticks, but things do not look promising. We can't afford any further rent hikes in our building after this year, 2-bedrooms in elevator buildings in Manhattan are even more expensive, and elevator 2-bedrooms in good areas of Brooklyn aren't a much cheaper unless you're willing to live in the ghetto - and with an infant, I'm just not willing to be that adventurous.

evnyc I would love to speak with you about your search,I know Brooklyn well(lived there for 5 years) and have sold a few places there recently and continue to work with a few clients in Brooklyn Heights and Windsor Terrace.
This is not a pitch for your biz, but you sound so down about the whole thing I would love to discuss and give you some feedback based on what I am seeing. I am not from the sticks, but I have raised two city kids...

Feel free to email me or call.

http://theburkhardtgroup.com/agents_details.php?agent_ID=7619

oh sorry. i thought you were leaning towards renting for another year which is why i mentioned walk-ups (thinking you might be able to get a 2 br for close to the price of a 1br in elevator full service bldg). good luck to you! it's a very frustrating process.

evnyc, I'm here to be a cheerleader when potential buyers like us are feeling disheartened. Our lovely new broker has advised us to be patient until the end of October, when the post-Labor Day sellers are potentially going to be cutting their prices. It may still not be enough, but it gives us a realistic goal. If there's still the same pile of crap that's attracting flies (and overeager buyers) right now, then we'll regroup. Don't give up hope yet.

Thanks, rlmnyc. I don't know about you, but I've been waiting for years to buy with the expectation that prices would fall. Instead, I see the opposite happening in the low-end market. I'm due in January and if we haven't made a decision by then, it's going to be too late for us to get to a closing before our lease runs out. Moving with an infant is not my idea of a picnic, so if we end up renting the backup plan is to find a decent space in Queens, suck it up for a year or two and get out of the city entirely. No offence intended to Queens, but we are not enthused by this alternative.

UWSmom, when we moved out of our cheap(ish) 5th floor walkup the plan was to rent in a nicer building while we could take advantage of the incentives, watch prices descend while we bulked up our savings, and buy in 2010. We renewed our lease, I got in the family way, but prices didn't cooperate and now our rent is too expensive, the space too small, and the rental market is rebounding. We made a plan based on faulty assumptions and analysis of the New York real estate market, and things didn't work out. We gambled and lost; it happens a lot in this town.

But hey - fingers crossed for October!

It's the cheerleaders' fault that evnyc is feeling this way.

Erm, no Sunday: it's because I fell quite under the bearish spell for a good long while and didn't buy in 2009/early 2020 because I didn't want to "catch a falling knife." I did anyway - it was just going the other direction.

evnyc, so you passed on a nice place that you could afford at one point and is regretting that decision?

I think you should take KeithB up on his offer and have a little chat with him.

@ evnyc: It sounds to me like what you want and what you can afford are two different things. The fact of the matter is, unless you have a very low income and no savings whatsoever, you CAN live in the city but you will have to make some sacrifices, and based on the little info you provided in this thread, it seems like you don't want to do that.

Now, what I said is fairly harsh... with reason. I grew up in Manhattan my whole life, but when I was born, my parents had a one bedroom apartment in a co-op walk up building that had seen better days (and still do, although it has become substantially larger and renovated several times over in the last 20 years). It wasn't paradise, but they made it work and in time it ended up working for them. Over the years they bought the neighboring apartment, did work, made it their own, etc.

Flash forward to now, a few months ago I was looking at buying a new development that was 1BR in a modern building. It was everything I wanted but I would have been pretty financially stretched if I went through with it. My attorney told me to run from the building because there were numerous problems and I did (this was mentioned in some other thread btw). I thought about moving into a studio rental from my modern 1BR rental to reduce my monthlies and realized that maybe I should just buy an alcove studio in a co-op for the time being. It wasn't ideal, but I could actually build equity instead of throwing my money away each month and cut my monthlies down at the same time. It was pretty much win win. Well, as of today I have a contract out on an apartment located in the ideal area I wanted to be in, but it needs a gut renovation that I will have to do in stages because of the cost. Not ideal, but it will work. I will miss the separation between rooms, but hey, in 3-5 years I can sell it and hopefully get what I was really hoping for.

I could be very wrong, evnyc, but if you make the sacrifices, you can have what you are looking for. If you don't want to, then I wish you the best of luck on finding the perfect home for your new family as close to the city as possible.

(Matthew Russell - Brown Harris Stevens)

Sunday, I was cheerfully warning friends who were looking that prices would decline and they were going to be underwater in a year or two. Not that I wasn't "helping" them look - but I thought I had all the time in the world, interest rates were going to skyrocket any day now and prices would decline commensurately, blah blah blah.

Guess what? Today I couldn't buy what they bought in the same blasted building for what they paid. I'd have to go further out, sacrifice a second bathroom and forget outdoor space. So yes, I looked at places I could afford and never made an offer because I felt so sure prices would decline and I sincerely regret it. There, I said it. I was an idiot and have no one to blame for it but myself. Not that I am anywhere near believing that real estate prices always go up - to the contrary - but in hindsight it appears that it will take something a great deal more severe than a brush with another Depression to tank the NY market.

As usual, I'm still waiting for that orgasm! Don't tell me I missed it again!

I have been selling property for the last year and have helped some clients find what we all agreed were fair deals that fit their present lifestyle and time frame. Currently have a East Side jr.4, prewar, doorman in contract at $600F2 another offer accepted in Windsor Terrace at about $490F2. None of my buyers were counting pennies to purchase, all were more than qualified with strong financials and time....

If you are really cutting it so close to purchase it just may not be a good idea. I say that knowing nothing about your debt to income and savings. But I still think there is a very real risk of a 10-20% correction in prices, many properties are still to damn expensive. And it's true that parts of Brooklyn have seen prices holding up better than Manhattan!!! After the market crash in 1987 it took a few years too see RE prices really hit bottom and after they did, those who bought at peak had to wait ten years to get back to even.

All my clients know how I feel, that over the short term(1-2 years) prices may continue to fall. But these are people with 7-10 years+ time frames.

If you had the guts to pull the trigger winter of 2009, God bless you may have gotten what currently looks like a steal. When looking at comps, some of those trades can really through things out of whack.

We just are coming down from the biggest financial blow up since the great depression and the economy is being held together with duct tape. This ain't over yet...

What you are saying is you missed some "deals" in early 2009, so what, you had to have balls of steel to buy then!! Don't beat yourself up, sounds like you have a great marriage and have a baby in the oven and are at least in the running to maybe buy real estate in one of the greatest cities in the world, life is good.

"too" . In the process of moving and typing too fast...

"throw things out of whack" jeez..

@NYRENewbie: I think it's more like the Flaccid Trickle.

Keith: my finances are fine, it's the prices that didn't go down like everyone thought they would. What convinces you that there's still a correction coming? If quality buyers are snapping up the little inventory that's out there, give me one good reason not based on some lunatic fringe blogger's "analysis" as to why that should change. I'd love to know about it.

evnyc, I don't think it's a "lunatic fringe" expectation that prices will come down. Prices have barely budged since DB and GS both predicted an additional 40% down over a year ago. There are good economic reasons to think prices will come down eventually, but as the old adage goes, the market can stay irrational longer than you can stay solvent.

I keep pointing to the '87 peak, after which NYC did not hit bottom until 1995, and then stayed flat until 1997. Along the way there were several upticks. It may be a similar pattern this time, or sellers/sponsors may be even more obstinate this time because their experience of the brief 2001 downturn "taught" them that real estate always bounces back, so they may feel they can hold out even longer.

If nothing else, eventually inflation will eat away what's left of the bubble if the market stays mostly flat, with modest seasonal movements up and down. That, of course, would take a long time.

None of this helps you, I know. Do work locations not permit an easy commute on the LIRR or NJT? You can probably find some nice deals out there . . .

I think you will see a gradual decline in prices over the next year at least. We had the pop in 2010 from pent up demand and that pop fizzled out earlier and harder than a typical seasonality change.

Inventory remains high.
Lending is tight
9.6% unemployment
Domestic economic uncertainty
Europe still facing serious economic issues
People are scared, saving their money.Less fearful than 2009...but still there is fear.
Prices rose like 600% and are down in NYC 20%?
Foreclosures, short sales still at record levels

I may be wrong, who am I? Just a guy with an opinion. But let's talk in March 2011 and see where we stand. Real estate moves more like a tanker, not a shooting star like say equity markets.
I was in real estate in 1990 and there were like no sales transactions taking place downtown, that bust started in 1988.h
Historical cycles of booms and busts....and booms tell us something and imho we just have not busted considering where we are coming from.

I'll add that we want to buy as well, problem is being self employed the banks are asking for just too much. My mover comes on Thursday at 8am...hello Joisy! That said I have lived here since 1981, so I am guessing I am a bit older than you, talk about missing some deal.Oy.Double Oy and thats coming from a goy.
That is a recent picture on my web bio, clean living...

evnyc, no-one can predict what is going to happen as you know. Most people on this site say do not buy and wait for the price to go down. Many of them are looking to buy and hoping the prices will drop. Well they did drop and now the prices are firming. I happen to be an investor and am always looking for the right investment. Hard to find what I am looking for but if you are going to be staying 5 years or more in a place, do not worry that prices may drop another 10-20%. Now finding something affordable under your circumstances could be a different story. Hope you get lucky and trip over some coop/condo that fits you and your family.

evnyc, so you regret not knowing exactly how the future will play out? What if you did buy that apartment... Do you know what your life would be like if you picked that path? No, you don't. You can't even be sure what would happen if walk outside and turn left vs. right. Think about all the freak accidents that you hear about. I never regret any of my decisions regardless of the outcome because I know that I made the decision based on what I knew at that moment. Besides, things can always be worse.

Go rent a nice affordable place, save up some more money, and then look again in a couple more years. In the mean time, enjoy your life and your baby. ...or you can continue your search, get depressed, settle on a place you don't really love, and then the moment you close, the market tanks...

I haven't read much of this thread but Sunday's middle finger is epic.

evnyc, first, congratulations on your impending addition! Second, don't live life with regrets. As has already been mentioned numerous times, nobody has a crystal ball. I find Keith's arguments for the declining market compelling, though he freely admits his fallibility as well. Make the best decision for yourself and your family based on the info you have today.

evnyc, I went to a few open houses yesterday, but nothing promising so far. Mid-range priced apartments have lots of warts as well. One open house was sparsely attended and the other was moderately busy. I checked the listings all week, but not many new listings of interest. That said, I really think that most people are waiting until after Yom Kippur to list their apartment. The last weekend of September should have some new inventory - not a flood of inventory, but some new options.

I am absolutely certain that if you continue searching, you will find something good in your price range in a respectable neighborhood. I know its frustrating looking at so many places and having things not work out for various reasons. I would just take a break from your searching until next week and then look again over the next few months. I'm not an optimist by nature, but anyone who's put in as much effort as you have will be rewarded by the inventory gods. Also, I've never understood how someone can make an offer on an apartment at an open house (even if they've been looking for a long time) - so much money and making a decision that fast seems too impulsive to me. At least think about it for a day or so.

For the record, what typically matters with regard to changes in price is not the absolute number of housing inventory, but the RATE at which they are sold. As such, the usual metric is "Months of Inventory" which equals the number of units in inventory divided by units sold per month.

Back in June and July, inventory was UNDER 10,000 and pending sales were around a 1000 per month. That means that there were less than 10 months of inventory - and 10 months of inventory is the historical norm for Manhattan over the past 10 years or more. Curiously prices went up a notch in June and July when Months of Inventory was below "normal."

While seasonality in RE is HUGE and plays a role here, since the expiration of the tax credit, inventory has increased slightly but sales have declined significantly. According to Urbandigs (old) web site, we are now at an inventory of 8500, but pending sales over the past 30 days stand at 591 units. Using those numbers (8500/591) as of today, that puts us at OVER 14 months of inventory. As a general rule of thumb, inventory levels above the norm (10 months of inventory) usually means that prices drop.

The now expired tax credit had the biggest impact on inventory below $1 Million. Now that the tax credit has expired, in all likelihood the lower end of the market will probably experience the greatest percentage increases in inventory, and subsequently, the greatest percentage decreases in price.

It is too soon to tell if the Manhattan sales figures will remain as deflated as they are now for the remainder of the Fall RE season, but those looking to sell should be nervous...

I'm skeptical that the credit was of much importance in nyc -- it's simply too small in terms of percent of transaction size.