Asking prices have not adjusted.

I don't think there's any need for an "across the board" shift. Sellers who don't adjust, and whose apartments are unexceptional, simply won't make sales. Enough prices have fallen, in enough categories, to at least make it pretty clear that 2007 comps (let alone a markup over those comps) no longer reflect market prices.

Of course, it's frustrating if the apartment you really want is among the holdouts.

You know what? I think at a certain point you gotta say to yourself, it just isn't worth it. These people want a certain price, and I LOVE the city and can afford it, but I just don't think it's worth it. And just because someone may pay more down the line, it doesn't justify it. So you move on. You rent or leave the city and you let these idiots sell apartments to each other. But I guarantee you at some point it becomes musical chairs. This part is not a question it is a certainty. At some point, it becomes musical chairs. A few people get left without the chair, and then others can't afford to hold onto their chair, and it collapses. I don't know when or how, but it just ain't worth $1,000 per foot to live in the city. I don't give a shit who you are, or how much money you have. It will be taken away from you if you spend it irresponsibly, and you won't support the market, the market will destroy you.

You might want to see where things are right after Thanksgiving. That is a super-slow time even in the best of times so will probably be a good time to get a bargain.

Patience, KGG. Give it a spring selling season or two.

RE cycles are longer term in their duration. Looking at history, prices peaked in 1988 and bottomed in the 1993-1994 period. Two years later, sales volume remained sluggish (but improving), inventories high and bank financing was still not easy to obtain. The corrective process can take a while.

kgg - are you actively in the market to buy? If so, don't worry so much about asking prices. Offer what you're willing to pay for the property you like. See what happens.

If, rather, you are just annoyed at the pace of the price corrections, maybe you should seek out another hobby.

Relax kgg, prices are going to come way down. Why the panic? Give the poor sellers a chance to accept the new reality that the party is over.

dmag2020, sadly, i agree. ny is too expensive. time to move on. that's just how it is.

dmag2020, well said. I forgot to mention it in my post above. :)

I believe that the parabolic run-up from 2004- 1Q 2007 was driven by foreign buyers.speculators that had vastly over valued currencies. In other words, fictitious & not sustainable. Look at it this way, overseas investors were not paying $1,000/sq ft, they were paying an equivalent $600/sq ft at most in their local currency. It is only us Americans with USDs that saw the absurd prices. The days of foreign currencies on steroids are over and I suspect the USD will continue too rise to a valuation that is consistent with historical trends.

Time will tell how much fluff in is this market and IMO, there is a lot of wind underneath prices.

Here's a big adjustment.

http://www.streeteasy.com/nyc/sale/356507-coop-200-west-79th-street-upper-west-side-new-york

eobrien - I assume you're joking. But what's the issue? Initial ask too high? or 2% adjustment too low?

"Seems brokers who are now expecting lowball offers are overpricing their apts 20% so they can meet buyers lowered bids and still get their price."

Sellers too. Maybe if buyers actually made REAL offers near the asking price, sellers would not have to pad their prices to fool lowball buyers into thinking they are getting a good deal. Just sayin...

Although I don't intend to be one of them, I think there will be a meaningful number of people like dmag2020and ebnozn who decide NYC just isn't worth it. Prices in other places have come down a lot, plus a lot of people are worried about crime and quality of life here in the near future (whether rightly or wrongly, I have no idea). Should be interesting to watch the trends, and any impact on RE prices.

If you don't like NYC, then leave! Don't let the door hit you on the way out. Go buy a stupid McMansion in North Carolina and die of boredum.

tina24hour - yes joking, as is a 2% adjustment. Why even bother??

its not about affording to buy vs leaving the city. I think I'll continue renting for half the price of buying till buying cost equals renting cost. I realize this will likely take 2 - 3 years, but if you really like the city, it's worth it ..

I can definitely tell you that prices have fallen on rentals...landlords are willing to negotiate the price and also pay the agent's fee without blinking.

Ok, I'll take that as yes, you all agree, no really significant price cuts regarding asking prices across the board in Manhattan.
Yet.

And I agree NYC is expensive. Leaving is a money thing. Staying is an ego thing.
The two driving forces in this town.

Also, yes people are leaving the city. Fed-up with never getting ahead. And once you have a kid it gets harder to justify.

Alpine292, not being able to afford nyc doesn't equal not loving it. People are getting (extra) squeezed after the run-up of the last few years.

If you were able to afford living here over the past few years, what makes it less affordable now? Certainly not declining housing prices for buyers and renters.
If you have lost your job, relocation is certainly a consideration. But it's not just ego that keeps people here. This is a great city to live in, to raise kids in, to grow old in. Seriously, where would you go?

I think you're underestimating how many people bought apts that they couldn't afford unless prices were increasingly significantly every year - many people who bought condos priced in an assumption that the value of the apt would go up 10%+ per year so they ran negative carry on the monthly costs.

NYC10013: I don't follow your logic. What impact does the increasing/decreasing home equity have on the monthly payments? None. If you're talking about people in trouble with adjustable rate mortgages, that's a different issue. But the actual decline in the market value of your home (painful as that is - my home is likely not worth what I paid for it a year ago!) should not affect one's monthly costs.

Rents have increased drastically over the last five years.
When I moved here in 1996 the new kids moved to
UES, Murray Hill, LES and Williamsburg. Now they move to
Astoria and Sunset Park. Just an example of how it's gotten tougher.

I love the city and plan on staying but your comment "This is a great city to live in, to raise kids in, to grow old in. Seriously, where would you go?" perfectly illustrates
the egocentric quality I'm referring too. Not a putdown just an observation. I have it too.

Rental...doorman, small one bedroom $2100. Landlord paid the agent's fee negotiated the price from $2400 to $2100. There is movement but it takes time and effort and lots of luck to get a good deal in a rental.

also, the apartment is on the upper east side

Tina24hour, I think you are right except for people who bought with the expectation that, when they retire or have children or want to downsize when kids go to college, their apartment will have significantly appreciated. By selling then, the apartment, they thought, will provide the nestegg they failed to save. If they did this in the early 1990s it still works out for them. If they did it in 2000, it was a bad plan, no?

It's not just ego. I've tried moving to other places - Rochester (1990), California (1993), and Connecticut (2004) - and returned every time. Not just because I prefer it here but also because no matter if it's an economic downturn (1990), a post-election uptick (1993), or a boom/bubble (2004), New York has given me a better quality of life. We pay over 40% of our post-tax income to live here. In Rochester, I paid 50%! In Connecticut (not even fancy Connecticut, we lived in Norwalk!), we paid $1000/month in real estate taxes alone. Okay, California was more of an existential nightmare, but still.

I never said it's just ego. But ego is a factor for many transplants.
If you can make it there...you can make it anywhere is echoing in the minds
of many Manhattanites. Manhattan is as bigger and better as it gets in this
country and leaving for many feels like giving in and giving up. That's ego.
I speak from experience.

tina - I wasn't suggesting that the monthly carrying costs have changed - I was suggesting that people bought apts with monthly carrying costs that were significantly higher than what they could comfortably afford because they assumed the value of the apt would continue to increase 10%+ per year - so they assumed when they sold in 3-7 years they would make a lot of money from the appreciation on the apt which would be reduced by the carrying costs that were significantly higher than "normal" because they stretched to buy what they did. I think of it this way - people wouldn't have paid the prices they did 1-2 years ago (or even 2-4 years ago) if they assumed the market was going to decrease 10-20% / year. Take two different buyers today - both pay the same price, same down payment, same mortgage at same rate. Buyer 1 assumes market is going up 10% / year for next five years. Until yesterday, Buyer 2 uassumed same thing as Buyer 1 (market going up 10% / year); today Buyer 2 got more pessimistic and decided market is going down 10% / year for next five years. With Buyer 2's new view, the cost of buying an apartment today just got a heck of a lot more expensive.

These cycles take time. So far, you are seeing exactly what you would expect - rapidly increasing inventory and very few sales. There is massive downward pressure building up and at some point this thing will pop. Based on recent inventory levels and the current trend of sales it looks like we have over 2 years of inventory currently with much more supply still coming on the market. Have no fear, it will be a disaster.

just to clarify, nyc is definitely *worth it*! but it's worth it the way a ferrari is *worth it*. there's a real chance now to get an apartment elsewhere for cash, work freeleance, and travel four months out of the year. i'm not a stay at home kind of guy. so is livng in nyc worth passing on that? prices here are now very high relative to other places. sometimes i think i miss out on a lot since so much money goes to making the rent here.

ebnozn - Incomes are also relatively high. But if you're feeling itchy, now might be the time to give it a shot elsewhere. But when you get there, just rent - save your cash to buy when you move back to New York.

so true!