Anyone Noticing More Inventory?

I think a lot of sellers are trying to list in front of the Spring season. I too have noticed lots of new listings on Streeteasy with something like "9 days on market in StreetEasy". What I find amusing are the listings that say something like "255 days on market in StreetEasy" but have no history of price changes. Either the sellers are in denial or they've simply given up trying to sell their apartments. I'm sure we'll see 7,000 before the end of the year.

I noticed the increased inventory on urbandigs, just not in my price range (650-750K). What I have noticed are more price decreases. However I think this is because there are a lot of sellers with high expectations.

iMom: I also thought that the 7K mark would be hit later this year, but now I'm not so sure. I also thought prices would come down a lot later this year. Is it just me, or does anyone else think that the doom and gloom predictions will NOT come to fruition this year (or 2009)? Maybe I'm just being naively influenced by the fact the stock market didn't plummet after the BSC buy-out.

khd: I'm looking less at the stock market and more at the job market. Not only are thousands of formerly high-paying jobs disappearing, the "lucky" ones who get to stay on board will not likely see the same kinds of bonuses that they did over the last few years. A larger available pool of talent to fill relatively fewer seats, combined with reduced corporate earnings = less support for an already frothy market.

I think that 7,000 will come as 1) individual sellers, worried about the economy and the state of the market, try to lock in the run-up in prices over the last few years, 2) new development units come online and their sponsors release the units onto the market and 3) buyers take longer to decide and to see where prices and supply settle out.

What you're seeing right now is that sellers are reluctant to lower their prices because they are hoping the slow-down will be short-lived and that buyers come back and are willing to pay the asking prices that were set back in 2007. Meanwhile, buyers are reluctant to commit given the shaking economic (macro and micro) environment. That's why sales have been slow and part of the reason why inventory has been growing.

Also, if the rental market continues to be attractive, you'll see people more amenable to the idea of simply renting until the time is right. In the short-term, the monthly cost of renting is comparatively more attractive then the combination of mortgage, common charges and taxes. Furthermore, renting provides a greater flexibility and liquidity situation, both things that people have been placing a greater emphasis on.

iMom: I honestly hope you are right! My perspective: I am a (heavily subsidized) renter with a very stable (academic) job (so is my spouse!), no kids, excellent credit; I'm in a great position to buy. The only thing stopping me is the crazy price of apartments in NYC. My "fear" is that there are a lot of other people like me out there competing for the same small pool of apartments, comparable to what we are renting, in the right price range. In fact I think there are people out there in much worse shape who are over-buying. It will be interesting to see how everything shakes out, but I have a sinking feeling that it won't go my/our way!
Thanks for your insight.

I am actually seeing no inventory. In the past few weeks, there have been few, if any, 2 bedroom, 2 bath apartments coming onto the market in Midtown West and the UWS for 1.250 or below. Hoping it changes...

Speaking as one who fanatically tracks UES real estate, I can tell you that not only has inventory increased in the mid range (1.0-1.5mm), but there is also quite a bit of badly aged inventory still sitting on the market due to unrealistic seller expectations. There have been some price reductions in certain pockets, but by and large there still seems to be a 2006 mentality among sellers. But the winds they are a' shifting.

I can tell you that I have not seen a significant increase in the prime downtown (GV, WV, Chelsea, etc.) area for 1 bedrooms 800-1.2M range. The apartments that are out there have been sitting there because they represent some kind of compromise (bad layout, no views, etc.) However well priced prime apartments still go fast. We will see what the spring brings.

yea I see the same as east_cider as most of my 2BR buyers (1.1-1.4M) are looking in UES. I think this is a neighborhood specific trend for now.

I think people miss the point when it comes to inventory increase "in a price range". First the inventory will increase and if it gets too big only THEN will you start to see the price declines. After that it really remains an open question as to how far.

Using language Urbandigs understands, n the dot.com bust there were few "quality" companies with stock selling below $10. And no one introduced inventory in that range either (IPO's). But when the crash came there were at first more and more inventory (people looking to sell) and eventually not only were the the no-profit dot.coms selling below $10, but quality companies with real products like Verizon and Corning were selling at $1 to $2. This time too the market is likely to overreact. The problem is no one knows what that actually means. And those that get it right will probably have done so for the wrong reasons.