Did anyone else notice an unusual number of price drops today?

i've always received price drops for the past 2 years. nothing new there but I have seen price drops on new listings for the lower east side.

lo888, yes, I have saved searches in Chelsea, Flatiron, Greenwich Village & West Village 2 bedrooms up to 3.5mm - there were a bunch of price chops today, but most still feel overvalued to me. It's funny how the psychology has finally caught up to me,too - where I once considered myself a buyer of up to 2mm, now I don't want to spend more than 1.6 or 1.7. Maybe that's because I just lost 20% of the liquid assets I was going to use for a down payment... but I could still well afford to spend 2mm at 30% down with two years mortgage maintenace liquid... it's just that uncertainty about the future of NYC & the family job has finally gotten to me. That and I will be paying about 100K more in taxes when Obama pushes through his tax policies. All that adds up to less money to spend on real estate. I imagine many NYC families making around 1mm a year are feeling the same.

1.I, too, expect to be paying more in taxes under Obama, but:

(a) that's the way our country's progressive tax system should work. As Oliver Wendell Holmes said about taxes, "with them I buy civilization." If Obama runs the government as well as he has run his campaign, I will feel that my dollars at least are being efficiently used.

(b) it's worth it to me to restore America to its greatness

2. I, too, am a bit frozen by concern about the fiscal fallout in NYC. I am not lowering what I plan to pay, mostly in cash, but I do seriously doubt the value of the prices I see now and plan to wait and wait . . ..

mrsbuffet, if you're making around a million, your tax increase (3% of the amount over $250K) would be roughly $22,000.

Riley - I have been in this market since 1994 (great time to enter, no? Just luck). You should, unless money is truly abundant, expect to pay less.

mrsbuffet,

if you make enough money that your taxes will increase by $100,000 per anum, then you can afford a lot more than a $2 million apartment. You would have to make $3 million per anum to net a tax hike of $100,000 per anum based on what I have seen from this tax proposal. If you are factoring in capital gains tax increases, which will be larger, perhaps only $2 million. Don't get hysterical.

nonsense, the top marginal tax rate may go up 10%...that will crush NYC real estate

from WSJ: "Taken together, these add up to about a 10-percentage-point hike in marginal tax rates for those making more than $250,000 a year"

http://online.wsj.com/article/SB122488938501868507.html#printMode

Someone making one million dollars a year still despite all of the layoffs deserves no symapthy

mrs.buffet proves no matter what one earns it's scary times. I have a small business...lower than the $250k range but I'm still nervous...I don't know if Obama's tax increases will affect those making under $250k...it sounds like it's a moving target.

Yes, 'MBZ', I am using the WSJ projections as well - but I hope you are right 'aboutready' & 'happyrenter' and that I am mistaken about the tax consequences. I am also considering that NYC taxes, property & income are probably going to to rise as well given projected budget shortfalls.

and yes, 'LICyuppie' I absolutely agree that someone making a million a year deserves no sympathy given the layoffs & the average income of others. I simply put my situation out here as an anecdotal example of what a household making 1mm a year is feeling right now, and what that means for my real estate search.

'Riley', I hope you are right, I want to feel that our family's (deserved?) reduction of consumption benefits other families.

On top of increasing marginal tax rates, capital gains taxes and taxes on dividends don't forgot increases in payroll taxes. The payroll tax is currently capped at $102,000 of income. Obama plans to remove the cap. Remember employees and employers pay 6.2% each for the payroll tax. So in addtion to the 10% hike in the marginal tax rate add another 6.2%. And don't forgot the added 6.2 % incentive your employer has to pay you less money.

And do you really think Obama is going to simply add this money to your social security account? No chance. We have long been told our payroll taxes are suppposed to be a safety net for one's old age and retiremenet. We are regularly sent statements of how much money we have put in and how that money will be available for us to take out. No chance. Your social security account is simply another piggy bank for Obama to raid. Another pawn of Obama's experiment in the re-distribution of productive people's wealth.

And no lifting the cap on payroll taxes will not help new york city real estate prices. This is bad. This is very, very bad.

Um, nothing I've seen predicts the Democrats will get to over 60 Senate seats. There will not be enough Senate votes to break a Republican filibuster on higher taxes.

R U kidding? I hope that's not the only thing keeping you from moving out of the country.

http://www.politico.com/news/stories/1008/14280.html

The democrats will go over 60 seats but will it be a repeat of clinton..two years in and the republicans start to take back seats.

And hrdnitlr, do not forget. No one even has to vote to enact the largest tax increase in history. Everything sunsets in 2010. Including the reduction in estate taxes. Perverse, but as things stand now there will be strong financial incentives for people to die in 2010 and not in 2011. We may have our elderly and terminally ill citizens offing themselves in 2010 because of the idiocy of our leaders. This is America?

Thank goodness McCain and Bush lost in their effort to allow SS funds to be placed in the market. Look where their gusto in unwinding the New Deal and related regs has delivered us. Redistribution is being bandied about so foolishly -- it is not taking from X to give to Y as that intellectual simpleton Palin likes to yammer. It is simply the idea of progressive tax, promoted by McCain's hero Teddy Roosevelt. Anyway -- getting back to NY RE -- I do expect a whole lot more for my money now (and lament that I stayed in a well priced rental for 20 years. For those who worry about the drop in value, keep in mind what was paid for most of the apartments. A seller today who purchased in 1990 is going to do very nicely even if RE takes a huge dive, yes? It's just that the seller won't do as well as if he or she sold last year.

With the incisive political and economic commentary available here on Streeteasy, I can skip Krugman's column this morning. ;o)

To get back to the subject: Price cuts on StreetEasy tend to spike on Wednesday and Thursday. That phenomenon may reflect the timing of the actual cuts, or the broker feeds, or both. In any case, the volume this week does seem to have been heavier than usual.

Sorry West. My apologies. On the topic, in addtion to the pice drops, I have also noticed that many new listings in the UES are coming on at well less than $1,000 per s.f. and not just studios and 1 BRs either. 2 BRs too. Nothing scientific. just an observation as I peruse the new inventory.

Are newer sellers being more realistic about prices? I guess who would be lsiting in this market unless you really have to sell.

I'm looking in the lower-end market (much lower than most here), and of my 20+ listings at least 6 have been listed and gone into contract between early September and now. I'm not sure whether I just have a good eye for realistic prices on decent apartments, or some other factor has been at work. I am always surprised when another one goes into contract.

I know it's off-topic, but please do remember that no matter who wins on Tuesday they will not implement 100% of what their tax policies were stated to be during the election. History shows us, with great certainty, that some of what is said in the election will happen and some will not. It doesn't mean there won't be changes to the current tax policy, just that the final product is very likely to be a little of this and a little of that, so there is no need to get crazy about it right now. Just my 2 cents and sorry for being off the topic.

Republicans love to claim that Democrats will raise taxes. Well, how else do you propose we pay for the Republican war, the Republican prescription drug benefit/pharma giveaway, the sky-rocketing healthcare costs associated with our "free market" system, and the trillion dollar Wall Street bailout necessitated by Republican incompetence, greed, and corruption?

Spending is what determines taxation, and we can either pay for it now or pay for it later. The Republicans have squandered our treasure on needless wars, corporate giveaways, and all manner of policy blunders. Meanwhile, our infrastructure is crumbling, education levels declining, and economy shrinking. Isn't it time to give the Democrats a chance to clean up their mess?

printing dollar bills! an implicit taxation.

West81st - I also think that the price drops hit on Wednesday and Thursday so that they get factored in to open houses and people generally look closer to the weekend, so the new prices (even they aren't having an open house) will pop-up on their searches.

I check price chops every day in Manhattan and then 10% or more cuts - there are usually 10-30 - there were 62 today - 7 pages worth. I'm almost drooling. Patience and you will see a significant haircut. There are buyers but most are waiting so they don't catch a falling knife

"Republicans love to claim that Democrats will raise taxes. Well, how else do you propose we pay for the Republican war, the Republican prescription drug benefit/pharma giveaway, the sky-rocketing healthcare costs associated with our "free market" system, and the trillion dollar Wall Street bailout necessitated by Republican incompetence, greed, and corruption?"

Happyrenter, the biggest chunk (and growing) what the government spends on is social security and medicare. Social spending has by far a bigger impact on taxes current and future than anything else.

You assessment of "free market" healthcare increasing taxes is just wrong. It might increase our costs, but we're paying for it, not the government. Granted, I don't care if I pay direct or through tax, I want it to be less and both sides are complete idiots on the matter.

Second, in the area of the Wall Street bailout, the housing market is what blew everything up. If you want to point fingers there, Dems pick a LOT of that up.. Clinton and Glass Steagal, Barney Frank refusing to touch FNMA and FMAC, etc. Idiots on both sides of the aisle.

But Democrats are traditionally much bigger spenders than Republicans. Lifetime social programs costs a lot more than wars...

I didn't see nearly as many today as I did yesterday. I also noticed a few new listings under $1,000 or $900/SF in the UES, Yorkville, Lenox Hilland midtown areas. So glad we backed out of our "deal" a few weeks back!

Going off topic now - perhaps households making over $1mn do not deserve sympathy however, I strongly believe that the cost of living should be factored into taxation somehow. People in NYC and parts of CA who have been getting clobbered in recent years by the AMT would look like Bill Gates if they made the same income in Alabama.

How about NYC starts getting back some of the money it gives to the federal government?

Taxpayers here end up subzidizing those folks in Alabama. Perhaps it should swing the other way.

There is no Hoover Dam (or Vegas) without taxes collected in NYC.

lo888/nyc10022: So move to Alabama.

Life is unfair. Get over it. Or amend the constitution and abolish the Senate.

Or, uh, well, uh, oh...

Vote.

West,
Agree life is not fair but I do not think it unreasonable to ask for some accountability for our tax dollars. New York City residents between federal, state, local, property and sales taxes are the highest taxed citizens in our nation. Why? So we can subsidize corn production in Iowa? Because their elected officials have done a better job than ours? And proposed tax hikes hurt New Yorkers more, leave less income for housing and will surely negatively impact NYC real estate values for years to come. And I have not heard a word on these issues from our elected officials.

Jake, I agree with you completely. I do not know how many families are going to be able to afford to stay in this city with all of the proposed tax increases (including SS ) and the already exorbitant cost of living. Not sure why there is so little media coverage on this issue.

After all, this isn't Alabama

Jake: Your rants contradict each other. You don't want Obama? Fine, vote for McCain. He'd be a good president.

But don't kid yourself that another Republican administration would address the distributive injustices that the Federal government perpetrates against high-tax, deep-blue states like New York and California, or tackle issues that would really help here, like AMT reform. McCain is going to lose New York by 20 or 25%. At the national level, the Republican Party has written off New York. Why would they do us any favors? (The flip side of the coin is that the Democratic Party takes New York for granted, but at least they owe us.)

No, vote for a party that lets Charlie Rangel write the tax law. He'll show em who's boss. And Carolyn Maloney. She's brilliant.

thats sarcasm byt the way.

Plenty of criminals and knuckle-draggers on both sides of the aisle.

Sooooo.... how 'bout them price drops?

Leave Barney Frank alone.

> Jake: Your rants contradict each other.

No they don't... you just didn't understand 'em.

> You don't want Obama?

Nope, didn't say that.

> Fine, vote for McCain. He'd be a good president.

Nope, didn't say that either.

> But don't kid yourself that another Republican administration would address the distributive
> injustices that the Federal government perpetrates against high-tax, deep-blue states
> like New York and California

Didn't say that either.

Exactly whose posts are you reading?

That is a crazy number of price drops.

I guess we've progressed past that "nothing is selling" point to the "damn, I have to sell, better cut" phase...

Thanks for all the help nyc and EAO. West I was just asking for help from our elected officials. Those whom we elected to represent the interests of our city and our state in Washington. So far they have been silent on these issues. AMT not a word. Payroll taxes, nada. Rangel ("every time I thought I was getting somewhere they started speaking in Spanish"), Maloney they are a start but how about the junior and senior senators Clinton and Schumer. The only thing I have ever heard Schumer get fired up about is Harriet Miers. Who you ask? Exactly my point. And the interests of New Yorkers always take a back seat to Hilary's national aspirations. Does this impact property values? You bet it does. Is this connected to the title of this thread. You bet it is. And as a property owners and prospective property owners we ought to be concerned. Very concerned.

I have noticed an acceleration in price reductions among my saved listings, but what's remarkable is that many of those properties have already experienced cuts.

Also, I've noticed a virtual fall-off in contract signings among my saved listings. The vast majority of updates are price declines.

You are welcome, Jake.

As for the topic of the thread, I have heard multiple anecdotes about major contract breakage / attempted negotiation, freebies, etc.

I wonder what these "close rate" is these days...

Those properties that go into contract, but don't sell and get put back on the market are not counted as new inventory when they go back on the market. They were also pulled out of the inventory list once they originally went into contract. They are also "double-counted" as a sale if they go into contract again. So the more this happens, and I would think it will happen quite a bit more than "normal" in this market, the more the inventory number is actually skewed and is potentially much larger than what it is showing.

here we go again....if an apartment sold for $700k in '03 and they just listed it for $1.4m...then they reduce the price $100k twice everyone here cheers the "huge" price reduction. Bottom line someone is going to pay $1.2 for a $700k apartment.

a) who's cheering? people are commenting on a trend. I think most people on the board have been pretty explicit that asking price does not equal apt value.
b) who's paying $1.2M?

Julia, between 2002-2006 NYC real estate experienced an unprecedented run-up in value. Some of this was based on increased population, improved schools, declining crime, etc, and shouldn't be expected to disappear. Much of it was based on hype and momentum investing. It takes time for that to get worked out of the market.

Also, remember this: if an apartment sold for 700k 5 years ago and now asks 1,2m, I would expect that in this market it could be purchased from a halfway motivated seller for 1 million at most. I still wouldn't buy it, but a 40% appreciation over 5 years is very, very different from a doubling.

"Those properties that go into contract, but don't sell and get put back on the market are not counted as new inventory when they go back on the market. They were also pulled out of the inventory list once they originally went into contract. They are also "double-counted" as a sale if they go into contract again. "

waverly, are you sure about that? if so, why wouldn't sreeteasy just fix it?

And, who says that 2003 prices represent the true value of the apartment? Why not 1992? Or 2005?

Special_k - It is one of those unique "quirks" of the RE indy in NYC. I brought this up at some point in another forum to urbandigs and he acknowledged this practice, but said that so few apartments fall out of contract it wasn't a factor. Perhaps this was the case in 2006, but I would imagain that it is happening much more frequently now and will continue happening for the next 12 months or so.

I brought it up to UD in a discussion on his site about the "fluffed" numbers of inventory, since "ineventory is low" was a constant call for why prices would remain high. I do believe in much of the strength of NYC to recover and that a limited amount of land/inventory is a real and valid reason, but I also believe that few know that the numbers are not exactly what they appear to be. As we all know, the RE indy in NYC is not the most transparent.

Someone can correct me if I am wrong, but I believe that this is accurate information.

By no means did I mean to imply that the price reductions brought these properties into the realm of our new reality. I was just noting that they were taking place at a higher rate than I'd seen recently.

Over the past week, I came across three recent purchases (2007 or 2008) that were back on the market and have gone from asking a premium over original purchase cost to being priced at or below in the span of a month.

"here we go again....if an apartment sold for $700k in '03 and they just listed it for $1.4m...then they reduce the price $100k twice everyone here cheers the "huge" price reduction. Bottom line someone is going to pay $1.2 for a $700k apartment"

If prices don't fall in one day by 20%, julia gets on this board and whines like a child about how prices aren't coming down and that it's just going up and it's just not fair and why why why

girl's about as sharp as a bowling ball

julia got outed as a broker a few weeks back, and didn't really deny it. Someone posted the chronology of changing stories that contradicted, and this week, after all thise complaining about her "horrible" search, had a "good brokers are invaluable" pitch...

I stopped listening to her...

beatyperputz...I cannot believe you take the time to repeat my entire quote...why is it if someone doesn't agree they are whining like a child... My point is very sound!!!

note, another post from julia, and no denial of brokerosity...

"I cannot believe you take the time to repeat my entire quote."

Cut-n-paste. Not so hard. Learn it.

"why is it if someone doesn't agree they are whining like a child"

Naw, it's really just you. When one posts anecdotal information or facts, you don't offer anything but to whine like a child "Prices aren't coming down. They're just going up. I wish they'd go down. But they keep going up. Why why why? Is it because I'm an idiot?" You are a broken record of astounding cluelessness.

"My point is very sound"

You made no point above. You merely made something up. Give us details, sweetie.

Maybe you can't. Maybe you haven't noticed the thread on streeteasy demonstrating that people are selling at or below their original cost.

"julia got outed as a broker a few weeks back"

I also noticed the contradictory posts. Girl's either a broker or as dumb as a box of rocks. Could it be both?

beatyerputz....your posts always give me a chuckle..dumb as a box of rocks...

interesting read...

I've been watching the mkt for a 3-br in the UWS for over a year (specifically Morningside Heights), and have seen big swings this year. Early this year you couldn't find a classic 6 for under 1.8MM (and most of those were dumps), while true 3 BRs were well north of $2MM. Since the summer I've seen a lot of reductions (6s more like 1.5-1.6), and this weekend I went to an open house for a classic 7 w riverviews for 1.99MM (needed work though.)

I've always heard that Wall St and Euro investment have been the two main factors propping up NYC RE; the first seems to be headed for lousy '08 bonuses at best and more layoffs likely, while the second seems to be drying up just as much. I guess the question is, how low might it go? I'd love to think that by next summer I could grab that Classic 7 for 1.3-1.5 ..but how realistic is that?

I'm quite sure there's no easy answer to this million dollar Q, but appreciate the insight on this board..
cheers

Obviously, it depends upon the property type and neighborhood.

I think I'll get seriously interested at around $700 per square foot for a townhouse duplex.

Maybe I'm smokin' dope - but things start to make sense for me in that area. Otherwise, I'm (reasonably) content to rent the equivalent.

Factor in the "there is the entire rest of the city" factors as well.

RE taxes are going to go up, maybe dramatically again, and that will affect prices. Then, services cuts have already started. Police already being reduced, and a little crime goes a long way.

Social services stuff, city cleanliness, hell, the MTA is going to start belching. They're already talking about East River bridge tolls again, and god knows pretty much EVERYTHING needs to be cut in the city.

Then, check out the news on schools. The city can't afford the new buildings now to fit all the new kids in the hot neighborhoods for parents, so they're instead changing the district boundaries. Check out the major fights on the UWS today. Parents who bought on specific blocks now freaking out that they will instead have to go to the school 10 blocks uptown with non-yuppie kids. So, the whole value of some of the neighborhoods because of school districts is going to be challenged somewhat, at least in terms of making things less certain.

So, yes, the rest of the city usually goes unnoticed by Wall Street, but there is going to be some impact here. Not necessarily 70's style, but even a few more percentage points in crime (homicides apparently up 8% alreadey) can definitely change outlook, especially when prices were partially based on expectation of continued appreciation (of prices and the city itself).

Going back to the tax issue, I was listening to a couple of legal experts on what to expect in terms of legislative changes affecting investment and it was pretty interesting.

The tax increases are inevitable and will likely take place during Obama's "honey moon period" (ie:first 8 months in office) and affect those making over $250K. These tax increases could very well be retroactive to January 2009 as could be the changes in cap gains tax. No curb on government spending or size of government in sight.

The increased taxes and spending were no surprise but the interesting part is that they felt it is unlikely that the $500K exemption on primary home sales will be repealed. Also, they believe that the individual AMT will be repealed at some point in the next 2 years. Let's hope for some positive "change".

> as could be the changes in cap gains tax.

Good thing nobody will have any capital gains in 2009....

> The increased taxes and spending were no surprise but the interesting part is that they felt it is
> unlikely that the $500K exemption on primary home sales will be repealed.

Which is stupid, but politically understandable.
I get that we want to help folks get into homes. But why give them an incentive to sell those homes? Upgrade, sure, roll into next purchase. But to give them a break on selling and keeping the profit?

Thats what got us into the mess in the first place...

Today is truly a sad day for our country.

in what sense?

Wait till Tuesday, tons of chops coming for the new year.

nyc10022 you shed so much light, I basically, come on here to read what you have written.

If this year's market ends up being anything like last year's, we can expect to see several price cuts in November which makes sense since, from what I've read, the Winter is a hardest time to sell.