what catalyst moves prices significantly down

what's not normal is that i refuse to pay for overpriced real estate even though i can afford it.

how about you?

to be clear.

I like buying things at lower prices too.

selling too soon? if you outperform most other investment vehicles, after transaction costs, how could you have sold too soon?

what investment advisor worth their salt would say you need to sell any asset at the top? idiotic. proper exit strategy is key to investment, and i never intended to live forever in any of the three places i sold.

the only thing i may be holding onto for too long is something i never intend to sell (although it has experienced huge appreciation since i bought it, the NY Fed recently had a paper on how and why upstate real estate hadn't lost value). it will be part of our estate for our daughter to deal with. a mere bauble.

Now I'm no longer clear. Are you saying that it isn't necessary to sell at the top (i.e. idiotic) but that it is important to buy at the bottom?

you've never been clear, and you're being a complete and utter tool. i've never said it's important to sell at the top or buy at the bottom (although neither suck).

it's not idiotic to sell at the top, it's idiotic to say that it's a necessity. you might sell real estate for an after cost gain of 100% at a time when you think your money might be better served invested elsewhere and rents are low.

it is, however, VERY important not to buy at the top, or near the top, where I think we are now, in many submarkets, particularly emerging areas. good night.

I'm neither idiotic nor a tool.

But I did make a clear statement about the difficulty of attempting to time markets. Your point seems to be that you are able to both time the real estate market and the stock market. I wish you luck in continuing to successfully replicate that strategy over and over again.

good night.

"Riversider
about 3 hours ago
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Yea, and in 1920, we had five families sharing an apartment. You really like to abuse data."

Why don't you provide some data on that?

Oh, who am I kidding: you're not going to find & interpret data. Here's what the US census had to say about persons per household in NYC:

Persons per household 1970 (complete count) 2.17 AVG
Persons per household 1980 (complete count) 1.96 AVG
Persons per household 1990 (complete count) 1.99 AVG
Persons per household 2000 (complete count) 2 AVG

Looks pretty flat for some time.

That's actually NY county, not all of NYC.

Aside from data, there is a theoretical issue: under what model of a market would higher demand lead to prices permanently rising faster than inflation?

Usually higher demand leads to efficiencies of scale and lower prices. So, why is NY different? Does technology not work on islands? Or is it that we have no profit-oriented developers?

Higher demand leads to lower prices?

Time to switch to midtownereast.

Yes.

Ok I just updated the Wikipedia page.

Have you really never heard of mass production, economies of scale and large markets? Adam Smith wrote a smart book about it a couple of centuries ago.

So increase in demand lowers prices, decrease in demand lowers prices.

What a bargain.

That might be true for things like cars an iPhones and even homes in Wayne, NJ, but not for bubble assets owned by me that I'm betting my future on, because it worked for the guy I bought it from.

Does this have something to do with Instant Grits? First, Wayne, NJ = NYC, then higher demand = lower prices. http://www.youtube.com/watch?v=APJDMvVp0XI

inonada: I nominate you for SE sainthood. I fear your efforts to combat willful ignorance are destined for failure, but you deserve credit for your unending supply of patience.

is the snow cleared in Wayne yet?

Did JP Morgan Chase get the judge's approval to exit Bankruptcy?

As for the OP, how about the overall median just dropping another 7.5%

Haven't read the full thread....just the start and a bit of the last few....but has anyone mentioned.... "Lower prices will be the catalyst for the next leg down?"

I was reading the threads about the median price action for Manhattan and W81 mentioned that the realtors/brokers devised a nice way of looking at improving data to encourage purchases. Might the same use of data work against on the way down? In a market with a relatively deep "reservoir" of comps, all it takes is down action to beget further pricing pressure. Call it the 'snowball rolling down hill' effect.

Combined with some financial market volatility and you have a catalyst. Do I believe prices will fall 20% in a six month period? No. Do I suspect they will continue lower, yes.

walter..I personally think the most likely scenario seems to be flattish prices that slowly erode the bubble prices.

However, if prices did start to weaken in nominal terms, for whatever reason. it could feed on itself as you say. So far, surprisingly, there isn't much fear in the market (other than during the peak of the crisis), but this market is vulnerable to a shock, for sure.

Even absent a shock, a fair number of new developments have been hanging on with very slow sales, and I wonder if sometime soon the developers and/or finance providers will have to get real, and adjust to market clearing levels. I just don't think they will hang on with slow sales for another two or three years that is pure speculation.

"Haven't read the full thread....just the start and a bit of the last few....but has anyone mentioned.... "Lower prices will be the catalyst for the next leg down?"

Yup...

"People realizing that prices actually went down - there are those, even here, still in denial - and the fact that the bounce many have called for didn't come either. There will be more and more of those anecdotes of losses, the reverse of what helped the runup. If nothing else, think of it as folks who tried to hold out their hope, and hope never really came."

"inonada: I nominate you for SE sainthood. I fear your efforts to combat willful ignorance are destined for failure, but you deserve credit for your unending supply of patience."

Why let facts get in the way of a good discussion?

Since this is just an innocent questions thread, can I ask one other question here? Sorry, I'm a little slow.

Can someone point to a time in Real Estate history when a market correction has taken place through sideways drift in nominal prices with inflation doing the correcting?

I know there have been times when prices just drifted sideways, but those weren't sideways corrections. They were just periods of no price movement.

Skinny, If I recollect properly, I'm still interested in those circumstances where just repeating something becomes fact to the listener.

Anyway, "Why let facts get in the way of a good discussion? "
That's been my question. How do you get away with using Wayne, NJ as your support for the direction of NYC real estate prices one way or the other? How does w34th make a claim about Chase having been bankrupt, when it never was, but just because it supports his thoughts on real estate? How does aboutready explain that you must buy at the bottom, but you musn't sell at the top, when the dollar difference can be exactly the same? How does financeguy claim that an increase in demand ends up decreasing prices?

How do you pretend to not be hfscomm1?

real estate bottoms are generally much easier to detect than tops. much. i never said anyone needed to buy or sell at any point, other than it's not a particularly good idea to buy during a bubble. and anyone who was paying attention to credit conditions and prices from about 2003 or 2004 onward knew that a bubble was brewing. i personally bought two apartments at a very good time, another at a fairly decent time, a house at an OK time. you keep ascribing positions to me that i have never expressed. of course it's delightful to sell at the top, and also delightful to buy at the bottom. neither are necessary. what is highly undesirable is to buy at or near the top of an unstable or untenable market. go ahead, twist that as well.

Nothing was twisted, I expressed a point of view of the inconsistency of necessitating buying at the bottom but not selling at the top. You responded to that. Later on you called some of my points of view idiotic, you called me a tool, now you accuse me of twisting. It's all here to read.

The goal of buying at a bottom and selling at the top makes the primary home appear nothing more than a stock certificate with walls. It isn't. The average holding period of a stock these days is 20 seconds. Homes are a place to live, have less liquidity and higher transactions costs. Buy a home because you need a place to live, have a reasonable time horizon, like the cost versus rent and value the other benefits of home ownership. The only goal if saying one bought low and sold high is bragging rights. And such claims if true can only be made in hindsight.

thank god i ignored the "your home is not a trade" advice ive gotten over the years--yea real estate's illiquid, and it is a pain to sell/buy, move into/out of a home; but to sit there long a significant leveraged asset at the peak of what is apparently a bubble, that is expensive to carry (in nyc's case, more expensive than renting) because it's a "home" is idiocy

as with any major, leveraged asset, one should try to buy real estate in the troughs and lighten up (at least) around the peaks

it's not about bragging rights, nor is it about hindsight as in redbaiter's claims of stock-trading prowess, it's about many feeling that we are much closer to the peak still, than we are the trough-and there are those who feel this is the trough--to each his/her own, but let's all be prudent based on our respective judgements, and not subscribe to some garbage about how your "home" isn't a stock cert--

there i go again, responding to redblatherer's random blather

i've tried to rein it in, but it still happens occasionally