apartments that ARE selling

of course apartments are selling. Sales volume is never going to hit zero. People bought apartments in Manhattan during the Great Depression.

There are stupid buyers everywhere who haven't been reading the news or looking at blogs.....in this case, the buyer took on all of the risk of the down market for just below asking. Crazy.

Same bldg., same layout, different finishes $415k...$525k for a studio on east 27th street...there are fools born everyday.

siggy and julia, do you know the contract price?

2A, another alcove studio in the building, just closed for $470,000 on 11/05/2008

http://www.streeteasy.com/nyc/sale/194568-coop-200-east-27th-street-kips-bay-new-york

Ssiggy98, not everyone purchases homes for investment purposes, and many people simply resent having to move multiple times. So, if one needs to relocate, you can't just call them "stupid" for wanting to purchase in the current climate.

If someone finds an apartment s/he LOVES and s/he plans on enjoying it for a long time, and if s/he can comfortably afford it without being constently concerned about property values/equity--then what's wrong with buying them?

I, for one, would much rather tolerate a likely 10%-25% reduction in equity temporarily for a great apartment than move to/from a rental before purchasing at an "idea" price--especially when I may not even find an apartment I love in the future. The time/effort/uncertainty isn't worth it for me.

"Sales volume is never going to hit zero. "

It looks like the current volume is about 13 contracts/day, which is getting pretty close to zero. I wouldn't be surprised to see it go to 3 contracts/day by the end of the year.

"wait indefinitely and everything will be 50% off" is just as ridiculous as "buy now or be priced out forever"

both are hype created by vested interests.

>Qurious
> "wait indefinitely and everything will be 50% off" is just as ridiculous as
>"buy now or be priced out forever"
>both are hype created by vested interests.

Amen!

In some parts of the country, houses are actually selling for 50% of peak prices. But I doubt you will see the same thing in Manhattan barring some major disaster.

Alpine..what will we see...will we see 20% off...I wish I had a crystal ball!

this gramercy alcove studio just closed for $482K

http://www.streeteasy.com/nyc/sale/217528-coop-201-east-21st-street-gramercy-park-new-york

Yes, Qurious, but it went into contract in August. That's hardly evidence of a robust market now.

"...just closed.." means they probably went to contract 3-4 months ago. Believe it or not, it was a different world then. Yes, most people knew it was bad, but some people out there weren't convinced it wasn't going to be a v-shaped recession. I don't think you'll see many people signing contracts today for 1/2 million dollar studios.

But its good to see people out there still keeping the faith! Long live the 98-07 Bull Market!

> Alpine..what will we see...will we see 20% off...I wish I had a crystal ball!

Don't think you need a crystal ball for that one... I think we're there. Lots of stuff pricing that much below previous sales.

> "wait indefinitely and everything will be 50% off" is just as ridiculous as
>"buy now or be priced out forever"
>both are hype created by vested interests.

True, but one has been proven 100% correct, and the other, while probably a little out there, is still in the realm of possibility. Hell, it has happened before, the the stock market got there...

sorry, make that but one has been proven 100% INcorrect,

Here's one that just sold - one contract fell through
and apparently the seller immediately found another
buyer.

Comments?

http://www.streeteasy.com/nyc/sale/292774-coop-201-east-79th-street-yorkville-new-york

I have a comment. You don't know what the sales price is.

12/12/2008
Sale closed for $510,000

same building, another alcove studio just went into contract (for very close to asking, according to the broker).

http://www.streeteasy.com/nyc/sale/361954-coop-200-east-27th-street-kips-bay-new-york

Qurious: nobody cares.

Doing Doing! Dead cat bounces as it guts are splattered on the pavement :)

this is what worries me...their are a glut of studios in manhattan and prices are not going down..they asking and getting over $400k for one room!!

Julia, what we are seeing on the broker side of the equation is a much larger drop in both number of deals and prices in the high end and mid range apartments, than in the studio and 1 bed range. Essentially properties priced under 1 million dollars are still moving at a somewhat reasonable pace,, although still less than before September. This is because banks are still willing to do these loans, considering them less risky (if they are in a building that is mostly sold), and most of the buyers are moving from rentals into ownership format, thus they are not relying on the sale of a previously owned apartment for their downpayment. It is the properties priced over 1 million where we are seeing an obvious lack of demand and increase in listings. We have already seen prices come down about 20 percent in these other areas. This is especially true in the high end market where for example the number of contracts signed for properties over 5 million has almost come to a standstill.

So. brokerdax, how does this account for the reported glut in 1-br and studio apartments reported a couple of months ago? When I look at the studio Qurious mentions, I think that either someone is buying for someone else or that the broker is lying.

The dollar is on the verge of collapse so the thinking goes at least I'll have something to touch......look what's happening in Russia.

evnyc, the inventory for these studio and 1 beds is still rising absolutely, what i am saying is that in response to julia's statement, my comments are to the reason that we have not seem the same level of price drops across the board when compared to larger units, and that this is the only section of the market that is still moving with any consistency. I do not know specifics about the apartments Qurious mentions.

"This is because banks are still willing to do these loans, considering them less risky"

Um, could it be because many of the loans are conforming, and therefore, backed by the government?

interesting to revisit this thread after 8 months.

clearly prices came down in the building i was watching. studios that sold for nearly $500k are easily available for just over $350K.

when is it time to buy? it may actually be slightly cheaper to rent than buy here.

love it..only time will tell. clerly things are slowly eroding. this kind of action doesnt juts end all of a sudden

oops, i meant "may be cheaper to buy than rent". seems to be a tossup anyway

this is the specific building i was looking at:

http://www.streeteasy.com/nyc/building/200-east-27-street-new_york

prices are goin south of 300k..cant have empty places. sooner or later people will be forced to break ranks

I'm more interested in McHale's statement that the dollar is "on the verge of collapse so the thinking goes." Clearly, if it's going to collapse, it's not going to be in the near term.

seriously, you think below $300k is a possibility? when?

at that point it the cost is certainly less than renting.

"In some parts of the country, houses are actually selling for 50% of peak prices. But I doubt you will see the same thing in Manhattan barring some major disaster."

We had a major disaster here on September 11, 2001, and real estate prices barely budged.

after the 9/11/09 disaster the Fed cut interest rates at a dizzyingly rapid rate - there was also a three-month period when real estate slowed even more than it has in the past 12 months, though, of course, it was followed by a buying frenzy

sorry - 9/11/01

and then prices withered 5-10% until mid 03 when they ramped til midlate 07

Excellent product percieved as having been priced right sells in good markets as well as bad. Everything not under that narrow umbrella, not so much.

"We had a major disaster here on September 11, 2001, and real estate prices barely budged"

Well in the finacial district it did for obvious reasons. A couple friends I know bought 40% below that current market. My memory is bad but I think that market was soft for around 6 to 9 months.

qurious, rents are still declining also. 30yrs could give you some better info, but studios in this type of building in this neighborhood used to go for under $100k, probably well under. how is that relevant to today's market? when you have such a large differential between original costs and current prices you have more room for distressed sellers to undercut the competition. one of the many reasons a neighborhood that has recently emerged seems to sink so quickly. particularly with this last boom, where traditionally weak neighborhoods rose much higher, percentgage-wise, than others. so the prices clear out faster, because they can. compare that to a new development, where you see the most fascinating price variations, because only some people feel they CAN (and must) lower prices.

i've never read anything which delineates when underwriting standards were abandoned. it seemed pretty drastic to me, maybe latter half of 2003, which would be consistent with Ubottom's report? i'd guess that the cheap money was irresistible, and when it didn't goose things along enough, the financial industry found a way to adapt.

this is one that just closed for $410k. true one bedroom. the spread between studios and real one bedrooms is still too narrow, in my opinion.

http://www.streeteasy.com/nyc/sale/359081-coop-333-east-55th-street-sutton-place-new-york

another one bedroom. this might be the closest i've seen recently to a rent/buy winner. but it's rather sterile. under $550 psf, with renovated kitchen, and decent maintenance. a ton are going at this level in this building. and, still, 8G went for $298K 06/04, and that was a huge appreciation over '98.

http://www.streeteasy.com/nyc/sale/356122-coop-345-east-93rd-street-yorkville-new-york
10/08/2008 Listed in StreetEasy by Prudential Elliman at $459,000.
02/11/2009 Price decreased by 7% to $425,000.
04/08/2009 Listing is no longer available.
04/24/2009 Re-listed by Prudential Elliman.
04/24/2009 Price decreased by 12% to $375,000.
05/19/2009 Listing entered contract.
08/17/2009 Listing sold.
08/17/2009 Sale recorded for $360,000.
09/01/2009 Listing sold.

AR: I see I have a convert to one of my mantras (lol). I'm not sure which building you are referring to here: "30yrs could give you some better info, but studios in this type of building in this neighborhood used to go for under $100k, probably well under." but since you later bring up 345 East 93rd, I'll say that while not as bad as 340 East 93rd across the street, where full 1BR's were routinely going in the $30,000 range, you had a few sales almost that low in 345 as well. Although part of that was at the time the location was probably thought of by the market as much more "in the middle of nowhere" than it is today.

one problem with the "rent vs buy" comparisons in these buildings, though: the higher the maintenance relative to purchase price, the more "risk" you have to build into your comparison. Since the maintenance is "fixed" (well, it grows, but it certainly doesn't go down as the market does) so if the maintenance is substantial portion of the buying costs, as rents go down, there's sort of a "leveraging" which goes down as prices go down (I'm sure this isn't making sense, but perhaps an example will help):

you have an apartment which rents for $2,000 a month. The maintenance is $1,000 per month. The $1,000 net makes it equivalent at about ?$250,000?. Well, let's say rents fall to 1600 (20%). Now you've got $600 net and the unit is equivalent at ?$150,000?. So rents went down 20%, but value went down ?40%? .... i.e. ?double what rents went down?

makes sense 30yrs.

the maintenance in that building is relatively low: around $600 for a studio.

3-4 deals on studios in the building have closed in the last month.

most if not all studios in this building in the last year have closed for well under $400k. the most recent listings for studios indicate asking prices are up. this most recent one is asking $449K. any thoughts on where the bottom is (or was) for studios in this building?

http://streeteasy.com/nyc/sale/490421-coop-200-east-27th-street-kips-bay-new-york

There will always be people who are not smart enough to realize they are throwing their money away. Have you ever watched House Hunters or Property Virgins? Everyone always ends up buying more than they can afford and something usually overpriced. The smart money would never consider buying NYC real estate right now.

anon3 - you just sound bitter because you still can't afford anything in nyc

Quorious, that's just an ask. Most recent comps - actual sales - are still in the $390ks. You can ask anything you want; it doesn't actually mean anything.

so do you think mid to upper $300s is "the bottom" for a studio in this building?