More unreasonable seller expectations - +20% in the last 16 months

That's because that's what they NEED to get out of it to buy that bigger apartment they want, silly!

I see nothing wrong with expecting property prices to increase 22% per year FOREVER, despite the fact that Wall Street is dying.

Right, spunk?

The reasoning behind this type of excessive mark-up is very simple. 1. Seller needs / wants to cover his initial purchase price, plus transfer and broker fees. 2. Seller does not have a realistic sense of current buyer mentality in NYC. 3. Seller has been told exactly what s/he wants to hear from prospective brokers: "The market is still strong and you will make a handsome profit in your whopping 12 months of ownership." 4. Sellers are always optimists... until the property has sat on the market for a while. Then seller actually does some research and begins a steady series of price cuts until the unit finds a new owner.

Most sellers don't do their homework before listing their units, and brokers will remain sanguine about the market until well past the moment when documented QOQ an YOY declines make it into the official reports. The current crop of newish listings reflect that sellers still think it is autumn 2007.