The market is adjusting down

Some would say the market is not adjusting down simply because asking prices are being reduced. I tend to agree with this but the first example above is a little disturbing as the unit was obviously renovated since the 2015 sale so assuming a reasonable discount, this will result in a capital loss to the owner over the past three years.

To me the first example shows sellers overreaching and over-estimating value. Renovation or not, the Impala unit is a typical new dev, cookie-cutter unit with nothing particularly special to offer. You could pour hundreds of thousands of dollars into a slick renovation and it will still be a mediocre apartment in a mediocre building and the market will respond accordingly.

The second example, IMO, is far more telling in terms of what is happening in the market. Here you have an attractive unit (not prewar but certainly not cookie-cutter new dev crap) with a traditional and desirable layout. Clearly needs some work but not estate by any stretch of the imagination. Decent location. Good family apartment. I think its previous ask of just under 3m was on par, albeit perhaps even then a tad high, with what was happening in the market a year or so ago. Unfortunately they overpriced it with their first ask of 3.3 a year ago and have been following the market down since then.

But, Squid, as a measure of market strength, the first example was sold in 2015, renovated and relisted three years later at a price that will in all likelihood lose money for the owner. That seems like pretty good evidence of a market decline.

At this time I think it's pointless to argue with anyone who thinks the market isn't down. The thing to look for is whether it has started to level off/rebound or continue to erode.

>>>But, Squid, as a measure of market strength, the first example was sold in 2015, renovated and relisted three years later at a price that will in all likelihood lose money for the owner. That seems like pretty good evidence of a market decline.<<<

Unit was purchased for 2.4 in Jan of 2016 and renovated at some point between then and now. My opinion still stands that the renovation doesn't necessarily add much by way of value to this unit-- the reno is very taste-specific and there is nothing particularly special about the unit/building. A new buyer will likely want to update or renovate the unit themselves.

So I am not sure that this listing is particularly reflective of a market decline in the same way the second listing may be. A stalled or stalling market--sure. But if the seller is able to achieve at or around their current ask for this unit, I don't necessarily see that is indicative of a market slide or loss of value to the unit. The seller for certain will lose capital because of the renovation. But I might expect that regardless of the market in this particular case (unless of course we were in the midst of a boom).

You have a point, Squid if you assume the reno added no value. All I can see in the pix are new floors which look pretty nice to me and I think a new buyer would not need to redo. But I do think many buyers throw good money after bad thinking they will get it all back and more in a renovation when they sell.

I think the bottom line is we can't determine the market Direction based on three units. (That said I certainly am in the camp that the market is going down). There's enough General data available to quantify this thesis. I think the finer details of it all are up for debate.

Keith Burkhardt
TBG

Depends on price point and pricing. Lower price stuff still moving.

another one

https://streeteasy.com/building/45-east-85-street-new_york/5e

Note 6E sold unrenovated 7/2016 for $2,295,000.
https://streeteasy.com/sale/1218890

Oof that 5E seller is looking at least a ~250k loss since the 2012 purchase.

So my question with the 5E unit in this current arguable downtrending market, is it now priced correctly where it represents good value or is there still room to fall?

One would think this would move fairly quickly but it is hard to say in this environment. Prime location, looks to be nicely renovated. Maintenance is on the higher side for a subpar building compared to others in the area however.

re 5E, the 50%+ increase between the 2010 and 2012 sale prices tell a story too.

In other words there is plenty of room to keep falling if that is the direction the market moves.

But a certain amount of *that* jump was due to a renovation.

Depends on price point and pricing. Refine your message