Is anyone on this board planning to buy now?

Prices have to drop pretty far to draw my family out of our rent-stabilized bunker. So color me a "hobbyist".

What's your rent, West 81st?

What's your social security number, nyc10023?

I've ramped back my search somewhat, given the current financial climate. That said, when I see the 'right' place, I intend to move.

I am a hobbyist, although for the last 6 months I have been helping a close friend with a search to buy within my own neighborhood (since the brokers have been less than useful). What my friend is looking for doesn't come up often- and I have a knack for finding them (some are on Streeteasy/NY Times, but some are not).

Yes. And wasn't this question on the thread "charting a strategy"?

joedavis, I am in a similar position as you, although I would frame it a bit differently. I would absolutely buy now if I found our dream place for 30-50% off peak. However, I consider the probability of that happening very, very low. So I wait patiently. I'd say the likeliest outcome for me is buying in 2 years.

Ditto to Bramstar. Prices have dropped on several apartments that are possibilities, but now I am inclined to hold out to see if prices on one of the two or three truly "right" places eventually will dip.

I see virtually no possibility of prices increasing in the next couple of years, and a fairly high likelihood of prices decreasing (severance pay does run out eventually, not intending to feast on the misfortunes of others, just realistic). I'm neither a buyer nor in this as a hobby. This is research. When I am ready, I will be very much so.

Thx all -- suitable property in my lingo is dream I suppose -- though I have become jaded after a year of looking and don't think any dream properties are showing up in my price range.
My rent is about the maintenance on a dream property and the location is great, still a combination of 2001 prices and low interest rates would negate this advantage even if we assume only a 10 year stay in the apt, 2% annual appreciation, 4% interest on money (down payment as a alternative) fom a savings account, and 5% rent (and maintenance) appreciation.
Have yet to see an apt comparable to mine that also meets these conditions -- even in Harlem (where I can't price new developments for 2001 because they did not exist, and I would not have ventured into thte neighborhood).
So, the economics and interest in architecture (or the social aspects of how people live and their property) has transformed me into a hobbyist. Of course the more you taste the more jaded you are, and yet every new opportunity that holds a new promise is also tempting.
Practically, with the new new interest rates and a uniform 30-50% off peak prices in UWS there may be many very nice opportunities -- of course then the question is whether buyers come pouring back in.

One thought I had was to turn this into cooperation instead of competition. If there are a number of interested buyers here, we could form a negotiating block and approach a developer to make a bulk purchase of units in a building that is getting caught in the downspin

Do you think the prices for new construction that was completed 2years ago in places like tribeca will go lower than 850psf?If you buy in soho,tribeca,west village and have only a ciber doorman and no view but light and a great apt layout and finishes will hurt the resale

Heh, just wondering, West81st. If you are renting a classic 7+ for under 2k, then there really is never a point at which you would/should buy.

I'm neither a seller nor buyer, nor hobbyist. Own a place have owned since '00 with a 1-year interlude because I was convinced that '05 was the peak but didn't like renting. So far, so good - if we were to rent our place out, we can cover carrying costs. I'm always on the lookout for a "bargain" - if we could trade our place for another one for the same price (don't care about condition) on a more prime block on the UWS, I'd do it in a heartbeat.

That's what happened when I was renting - saw a good opportunity. Sold our postwar uninteresting co-op in a so-so building (big underlying) mortgage. Own a prewar now on a good (but not best) block in a good school zone.

personally, I think rent stabilization should be eliminated for anyone born in 1946 or later. If a landlord wants to continue keeping the tenant in place at the rent stabilized rate, that should be a decision between two adults.

Disagree. When NYC was disintegrating, the fact that many people were rent-stabilized kept them in the city, and saved it from being completely destroyed.

when NYC was "disintegrating" tenants who were stabilized also paid what the market would bear at that point.

> Disagree. When NYC was disintegrating, the fact that many people were rent-stabilized kept them in
> the city, and saved it from being completely destroyed.

The logic is backward.

Part of the disintegration CAME FROM the rent stabilization. Landlords were burning or abandoning buildings they could no longer afford to maintain. Entire neighborhoods went to crap because of the lowest common denominator effect.

That being said, I support rent stabilization in the "diversity" sense. We're kidding ourselves if we think NYC would be NYC without some of the mix it has. Granted, I think anyone fighting income-based decontrol is a moron in that regard. If there was a better way to ensure that we were not subsidizing rich folk who just happened to have lucked into good deals...

I am planning to buy in tribeca,looking for renovated apartment.Would like to keep it to 900psf for a 2 bedroom.

nyc10023: That "classic 7+ for under 2k" is a bit like Reagan's Cadillac-driving Welfare mom: maybe it happens, but the prevalence has become something of an urban legend.

The common reality of rent stabilization is less dramatic. We pay probably 75-80% of free-market at this point, and our apartment would not be mistaken for a classic anything. Given the state of the sales market, maybe we could buy something comparable for a similar monthly cost, but we don't attach that much importance to ownership. If we can afford to buy an upgrade at some point, great. Otherwise, renting isn't really so bad.

"nyc10023: That "classic 7+ for under 2k" is a bit like Reagan's Cadillac-driving Welfare mom: maybe it happens, but the prevalence has become something of an urban legend."

Only because the folks who have 'em don't leave 'em. To folks who have been in NYC 5-10 years, of course they're not going to know many.

But, in my circle, we have 2 of the freakish deals. 1 bedroom for $550 in the E 60s (and cloer to the park than the river). And a 2 bedroom near Gracie Mansion for $950 or so (haven't asked her about increases in a bit).

And neither is a senior citizen...

joedavis: Do you have a building in mind for that "buying bloc"? I can't think of a new developement in the neighborhood that would be terribly interested in a bunch of $1MM buyers, or even have much inventory left. Ariel, maybe? I don't think they have much inventory left in the relevant price range. Some of the harder-pressed conversion sponsors might be willing to talk, but would you really want any of them?

west81st,do you know of any around walker.leonard in tribeca?

As to the Reagan Cadillac mom, it definitely happens but depends on the building and neighborhood. My building is full of Classic 6's for the $1500-2000 range. Less so now than 10 years ago when I moved in though. Old age and de-stabilization for income had an effect on apartments over time. There were also very few Classic 7s (only one line out of 4) that were not cut up ages ago into 1br's (up to 3 per apartment). And two of the 3BR's belong to the landlords kids.

I think if you look in the '90s and 100's on the UWS you will find more than in other places because here fewer co-ops were successful. Not sure if it was because the perceived values then weren't as high or if the tenants didn't have the same resources to buy, but I know my building tried and failed to go coop while two other buildings owned by the same landlord succeeded. (both were lower down).

I'm a buyer of a 3,000-5,000 sf loft/penthouse/apt downtown, but not until I can get it for $1k psf or so. I think the days of $2-3k psf are over and it is only a matter of time before prices get back to where they were just a few years ago.

I want something like this:

http://www.streeteasy.com/nyc/sale/361704-condo-158-mercer-st-soho-new-york

but not at $1800 psf. I'd buy it tomorrow at $1k psf, but it will take a year or more to get there.

I will likely rent a similar apartment early next year, I figure even if I am paying $20k or more per month, I will end up getting free rent as I will save $1 or $2 million by waiting to buy which more then pays for the rent for a year or two.

But I will buy at some point. This will be my terminal apartment, I don't want to move again, and these type of apartments are not usually found as rentals for long terms.

joe: I am. Provided of course that I can get a suitable property at 30-50% off peak prices

In short, you are never ever planning to buy and are just a hobbyist posting on the internet.

The wooster street new dev penthouse cut its price by 50%.

For $1k psf, you're going to have a LOT of choice in a few months...

"I will likely rent a similar apartment early next year, I figure even if I am paying $20k or more per month, I will end up getting free rent as I will save $1 or $2 million by waiting to buy which more then pays for the rent for a year or two."

Bingo. Strange how many bulls just don't get this...

What bulls dude? what bulls?

You keep pointing to thse "bulls" whenever someone disagrees with you? Who is bullish? I think the spectrum ranges from sanguine to bearish. And amoung the sanguine, some have a need to purchase because of personal situations.

AvUWS: I think I know which building you live in :)

> What bulls dude? what bulls?

I guess you don't read much.

> You keep pointing to thse "bulls" whenever someone disagrees with you? Who is bullish?

I include in that all the folks who denied that RE would decline at all up until just a couple months ago. That seems to be most of this board.

> I think the spectrum ranges from sanguine to bearish.

Well, sure, NOW. When the market starts its free fall, you have to be retarded to say its going up. But everything is documented here, so its pretty clear who is who...

> And amoung the sanguine, some have a need to purchase because of personal situations.

That doesn't change reality.

btw, I haven't heard "bitter renter" in months.... but there is another clear sign of "bull".
;-)

happyowner: 30-50% off peak puts you at somewhere around 2001-04 prices. Since the increase from those prices was based on income and euphoria that was based on air, I can't see why it is so inconceivable that as that air deflates and the income deflates with it, prices will deflate at a similar pace (albeit trailing). It's really not so complicated, bubble increases prices, prices go down when bubble pops. I have bought three times toward the bottom of the market. It's a bitch to see the top, but not always so hard to find the bottom, and we're not there yet.

i love the brooklyn brownstone market. been looking at buying 2 brownstones for the past 6 months. made some offers but got outbid.

still looking and have 1 bid out.

the market for large brownstones in prime neighborhoods is at an all time affordability.

My wife and I will look to buy this year. We are in a 1100sq on the UWS co-op and would like something a little bigger. But we bought in the late 90's and can wait it out.
I do think things right now are scary, but I also believe that anyone expecting a 30-50% decline is fooling themselves. If that ever does happen the rest of the U.S. and the world will have gone to shit already and I can only recall my grandfather's stories of the "great depression" and it will not be pretty for anyone.
I do think also the market is under pressure now and mostly because of fear and the way the idiots in this currrent administration has handled things and just scared the hell out of everyone.
We will get a better picture of what is really going on here around the end of Q1 or so IMHO

Once again, 30-50% would not be the great depression, it would be early 2000s. Six or so years ago.

> the market for large brownstones in prime neighborhoods is at an all time affordability.

Good thing sneaky pete isn't letting facts cloud his judgement.

Then again, Pete said RE would be going up back in JANUARY.

"I also believe that anyone expecting a 30-50% decline is fooling themselves. If that ever does happen the rest of the U.S. and the world will have gone to shit already and I can only recall my grandfather's stories of the "great depression"

This is VERY bad logic. The great depression represented MUCH more than 30-50% declines.
Also, the current Manhattan price bubble is unprecendented.

Hell, you could drop 50% and only lose a few years of growth

You are fooling yourself. We're pretty much ALREADY at 20% decline (ask urban digs) and thinking another 10% is impossible is just stupid.

nyc10022

I would really love for you to post the data for you statements. I can find no research that suggests the totality of prices in Manhattan are down 20%. Would really liked to be informed.
As for urban digs, does he not get his info from this site?

Ruff -

www.urbandigs.com

Urban Digs is actually a broker on the front lines... his data comes from the sales that have actually closed, aiming for apples to apples comparison.

Q4 numbers aren't really out yet, but the preliminary data shows a 75% decline in sales. Which could really shift medians substantially.

And then Q1 is bonus (or lack thereof) season.

So figure we're going to be in major flux for at least a few more months.

Take a look at the Rushmore. I don't know what it means, but of the 230 or so units that had been listed as unavailable, 60 or so have changed their status to temporarily off the market. Also, they are offering 5.875% financing for five years and 3% toward closing costs. This building supposedly was almost sold out ages ago.

so, no, he does not get his data from this site.

BTW, if you are SO interested in the data, why aren't you reading it. Its all posted on this board, hundreds of links to the major reports here.

Why do you expect folks to do your homework for you?

> "This building supposedly was almost sold out ages ago."

Lie of this decade.

Tons of those 100% sold buildings weren't even close. 110 livingston is STILL renting out apartments years later.

I'm looking to buy a Classic 7 in the UES, west of Third, at $1,000 per square feet.
At this moment I'm renting.

That is my point. Every idiot post these wacked out % (youself included) and the data is just not there. Might be there later, but my crystal ball is in the shop so I can't help you.
The only real data is Q3 and that simply does not validate your predictions.

Reading these post? I am, and no one has posted any real research data with real numbers. Just a circle jerk of posting (add your name) playing off one another.

Urbandigs if you ever read his web site, front page right hand side "Manhattan Real Estate Data" provided by......guess what moron, ready? Street Easy.

people who think it is impossible for the ny prop market to down 30%-50% really make me laugh.

I'm sure you also thought it was impossible for the dow to go from 14,000 to 8,000

why is is so impossible? like someone just said that is just 2002 - 2003 prices. a weeks ago the stock market just hit its 2002 low

Hey pgj267,
It is nice to hear that you live in 1100 square feet and would like something a little bigger. :-) My wife and I would like something a little bigger and 1100 sq feet is our dream, as we live in 625 square feet now. Maybe we can make a deal next year. I suppose it is a long shot but you never know. Feel free to write me on 407pas@gmail.com

It is only natural for everyone to want to improve their housing by a little bit. I talk to people who are currently living in studio apartments of around 350 sq feet and dream of a one bedrooms. Such is life in what is a crowded city.

I think we have rent stabilization to thank for helping to prop up prices on owner-occupied units. I read somewhere that there are 1 million rent stabilized units in the city that basically never come on the market. If those units did come on the market, rents and prices would eventually go lower but that is not going to happen.

I do believe that rent control laws destroy housing stock. Repairs have to be paid in today's dollars. If the rents cannot meet the maintenance requirements, the buildings start to deteriorate because the required maintenance is deferred. It is easy to see this when looking at conversions that have been rent stabilized for years.

So far it seems that if the property values fall to $850 to 1000 psf people on this board may be interested in buying in the nice neighborhoods.
This looks possible within the next few months --
My assessment (contrary to what many put out) is that higher priced properties will fall more on a % basis as the support for purchasing them vanishes. So a $4 million property will hit $3 million faster than a $1 million property hits $667,000. The trends in this direction are already apparent.
In the UWS, the main area I am familiar with getting a 1500 sf 3br/2b for 900k to 1 million does not seem unreasonable. So far, this choice is totally not there, and the enthusiasm on this board for how we are in free fall and about to catch a falling knife if buying is not really warranted.
However, the prices are declining, and we will get there.
For a nice 2000 sf apt with outdoor space in the UWS getting to 1.6 million to 2 million also seems possible.
Yes, this is a far cry from 200prices but not really too far out of line with 2002-4 prices.
Certainly, getting one of the new developments in S. Harlem in an area (pocket) that has turned around to come in with a high end apt at $600-800 psf already looks feasible (not based on asking price but on negotiation).
Some of these apartments are superior in quality to what you find at UWS prime for more than 1.5 to 2x the price. This pocket of Harlem will go the way of the area above 96th - higher rate of property upgrades and higher rate of new people moving in.
This comment does not apply to Harlem more generally.
Re West 81s comment, I do have a few buildings I am following but have not made any effort to see if they will do a bulk sale.

"Prices have to drop pretty far to draw my family out of our rent-stabilized bunker. "

same thing here. but i don't only care about prices, also about property taxes as they are the totally out of my control. so i would like to see them increase as far as i can think possible before plunging. right now i think we would look for a brownstone 2 to 3 years from now.

joedavis:

"So a $4 million property will hit $3 million faster than a $1 million property hits $667,000. The trends in this direction are already apparent." Agreed

Joe, if you can, would love to hear your updates as to what you're finding re: "getting a 1500 sf 3br/2b for 900k to 1 million does not seem unreasonable."

Thanks.

dwell -- there are very few apts with 1500sf below 1.35 million at the moment -- my estimate is that UWS is barely back to summer 2007 levels if that in this price range. However, the higher end is dropping more obviously.
As the pressure wave transcends down the people sitting at 1.6 to 1.8 million will be pushed down. Comparing what was avaiable early 2007 summer with now, my feeling is that there was quite a bit more inventory in the 1500 sq ft 3br/2ba level around 1.2 million then than there is today. Rather odd, given all the obvious reasons for doom and gloom.
On the other hand sellers are getting more realistic and the apts that were clearly marked up to 1.6/1.7 in the 3br category have now reach 1.4 and some of the ones that were at 1.4 have reach 1.1 -- 275 w 96th, 304 w 85th 370 riverside are examples
My projection is a projection, it is certainly not today's reality.
I am buying into the pitch by the doomsayers on this board but I do not yet see their enthusiasm bearing fruit. The tide is turning in attitude by brokers and sellers and this makes me believe that those who can still make a profit relative to their purchase price are getting to where they are willing to sell for pre-2007 prices and perhaps lower.
These numbers can only improve in the next few months.
The new development people can fall in two categories -- not much sold and hence hungry for action (-- if they all rent the rental market sees reductions), or mostly sold, money has been made, and have a few lagging apts that are not selling.
Both species may be good targets for a group buy at a substantial discount, particularly where the developer is savy enough to see the value in taking the money now when the near future looks only down.

407PAS I saw your post and have your email.

joedavis - At some point in the future I will buy back in but the prices need to correct dramatically to gain my interest. I originally purchased at $250 psf and $900 psf and sold for $600 psf and $1500 psf, respectively. I sold for the second time late last year. Like all asset classes - real estate is just one choice and each class has its cycle. Corporate bonds are now enjoying terrific spreads - I am not trying to time the market perfectly, just gauge general direction and real estate does not appeal to me in the short term. I will weigh my options as they come. To that end I have been both a real buyer (twice) and real seller (twice) -- right now I am happy with the Seller cap on as my most recent trade.

SEMERUN, MICHELE1045, MODERN, PGJ267, SANBA, 407PAS:

I read your posts here and I know of some listings that are similar to the criteria you describe. Would love to discuss if you are serious. Email me at rglazer@homesteadnyc.com
-Rachel

> You keep pointing to thse "bulls" whenever someone disagrees with you? Who is bullish?

I include in that all the folks who denied that RE would decline at all up until just a couple months ago. That seems to be most of this board.

oh, ok, so those people who previously didn't but now agree with you, you still want to chastize them just to prove how smart you are? wft is your problem?

nyc10022
about 4 hours ago
ignore this person
report abuse > "This building supposedly was almost sold out ages ago."

Lie of this decade.

Tons of those 100% sold buildings weren't even close. 110 livingston is STILL renting out apartments years later.

well, it is TWO years later, for one. And to continue, I doubt the developer decided to rent them out until they could sell within 2 years, just doesn't make sense. But if you want to be angry, no one is stopping you.

If prices drop 15-20% I'm there (studio). I don't see one bedroom apts. dropping 50%

West: Prices have to drop pretty far to draw my family out of our rent-stabilized bunker.

Ahh ... this explains it.

AgentRachel,

No thanks. Last thing I want right now is a broker to drag me around to overpriced listings. And if you read my post you would see I have no intention of buying right now. Good luck, but the brokerage business is going to be tough for the next year or two.

Hi Modern,

I would never drag you to listings that don't meet your criteria. If you want me to send you some listings that are close to the $1K psf range would be happy to. Also, I agree the brokerage biz is going to be tough for a bit, but I must tell everyone that people are still buying from me and my friends in the business. Its slower but a colleague of mine is in a bidding war right now for a listing in the $1500 psf range!

Best,
Rachel

Thank you so much Agent Rachel for showing up and trying to create a business for yourself out of this post.
Wish you the best of luck. But, as you can see even the ones expressing some interest are not interested in buying anything until the market shakes itself out to the point that you or similar brokers can step up to the steady flow of people who want things.
This is not the time for such fun, and please respect the response of modern and the others -- they are NOT interested at this point.

Happyowner - Explains what?

AgentRachel - Serious question: The audience on Streeteasy watches listings pretty closely. Why do you think you can match up the people here with suitable listings better than the buyers can by themselves? Do you have access to material information that isn't available to the public?

I understand that a lot of people prefer to delegate the initial screening to an agent, and that's fine. I just think that you're dealing with a population on Streeteasy that is very unlikely to do that.

Agent Rachel,

I appreciate your sales efforts- but I visited your firm's web site, and it's clear you don't have what I am looking for- nor does it seem likely.

As West81st mentioned, the key would be for you to have material information that isn't available to the public or at a minimum, poorly advertised i.e. a property that is located in Harlem, but listed with a Westchester agency that doesn't use channels that most NYC residents would view. As for listings that are well advertised- well then my friend would have simply relied on the NY Times/Streeteasy emails matching her search criteria...but even then, it's rare that a listing meets what she wants.

West81st - I think Streeteasy is an excellent site and I completely agree that the potential buyers here are more educated than most. However, yes we do have other broker only sites that we use. 2nd, because I'm dealing with so many other brokers (the majority of sales are co-brokered) they often have info on listings before they hit the market. For example, I am in the middle of a sale in a very prominent building and the sellers have another unit they would consider selling as well but it is not on the market. Also, as I'm sure you know, when you use an agent to help you find something to buy, there is no fee to you for doing so. Why wouldn't you take advantage of a free service?

Semerun - I don't only have access to my firm's inventory. I have access to every firms inventory as well as most private owner sales. Not everything is advertised in the NY Times and even if it is, it's not easy to sort through. Also, as an agent I know many co-op boards (if I don't one of my colleagues is likely to), real estate developers, etc that a buyer probably wouldn't.

Also, it is important that everyone here keep in mind that NYC real estate isn't going to hit the fan. Of course there will be negotiations where there weren't a year ago. However, Owners will choose to rent their apartments rather than take an absurd price. Especially in the newer building which are mainly condos and have few rental restrictions. I tried to get a client 20% below asking on a $10M apt recently and the owners wouldn't go below $8.5M (still 15% below asking) because they had a renter paying $35K per month. Yes, $35K.

Rachel -- thanks again -- I think we understand what a broker does, but thanks for the reminder
We appreciate that you need to and are trying to make a living
Best of luck with your prominent sale

It all comes down to yield over the long term. Period. Manhattan property yields about 2.5% (after subtracting monthly costs, and I've not even factored in management costs) and mortgage rates are about 5.5%, and I can get around 4% in a short term CD (FDIC guaranteed). So lets assume I am a cash buyer for a sec, why would I invest in property when I can get 1.5% better return risk free? Also if I had to borrow the money I would have to pay 5.5% on my mortgage and would then rent the property out for 2.5% and lose 3% while taking on the risk of my asset going down? I think for property prices to go up either mortgage rates have to go below the yield on property, property prices have to go down (so yield goes up) or rents need to go up (unlikely with more and more people getting bonuses in stock).

In addition the dollar has appreciated so much that foreign buyers are now far less likely to buy. There are many other major capitals that yield more than Manhattan - one example would be that at the moment I can buy property in central London which yields above 5.5% and if cable gets to 1.40 that is a far better long term investment.

I think over the long term the best way of looking at property is in terms of yield. Only then can you obtain any type of sense of fair value.

Agent Rachel,

Ok, so here is the challenge I am presented with. My friend is looking for an apartment in the Hamilton Heights section of Harlem. She has bid on two apartments I helped locate for her (she was the high bidder in both instances but lost out for other reasons) and she has fallen in love with Convent Avenue near City College, but is open to any apartment meeting her requirements in the neighborhood. She is looking for a Pre-War HDFC elevator building that has updated plumbing and electrical to allow an in unit washer/dryer. The apartment can be in estate condition or restored- as long as many of the original pre-war details are still intact. HDFC's are tricky, and I want to make sure the board has their act together. She intends on staying in this apartment for at least 20 years- so this must be something that she can grow into- so a minimum of 850 sq ft USABLE...but really she is looking at 900-1,200 sq feet, with 2 or 3 bedrooms. Now if this search wasn't difficult enough- the pricing point should be below $300,000. Her income level is within the range of what most of these HDFC's call upon. From experience we already know that this is possible, although very difficult to find.

"However, Owners will choose to rent their apartments rather than take an absurd price"...

umm No. Just wait, sellers that have to sell will be revealed. You are assuming that the economy is in good shape, jobs market is strong, the housing market here is fundamentally sound if not in a temporary blip, no negative wealth effect, and a wall street that fundamentally will be around in the years to come. Clearly this is not the case.

Sorry Rachel, if I wanted to use an agent right now, your lack of knowledge of the current real estate market and how bad it is going to get would disqualify you from consideration. Nothing personal, but I don't need a "rah-rah buy now" agent.

The days of pocket listings and bidding wars, common in hot markets, are gone (with a few exceptions from clueless buyers who haven't got the memo yet).

And in case you haven't done the math, $35k per month rent is not a very good return for an $8.5 million investment that will likely be $1-2+ million lower in 2 years. They have already lost at least $1.5 million (assuming they could have gotten their $10m at the peak) by being clever and renting it out for a measly $420k per year. And that rent is most likely going down at lease renewal, and they run the risk of it being vacant for months. Sounds like an uneducated client whose broker did not properly explain to them where the market is going.

I am simply telling you all what I am seeing right now. I have put in bids for buyers in several buildings for way below asking price. Even in buildings where the unit had been on the market for almost a year, sellers were only willing to cut their prices by 10 - 15%. Also, keep in mind, at this point I am dealing mostly with cash buyers who intend to hold their apartments for many years. As for bidding wars, of course they aren't common like 2 years ago, but I am telling you that I saw one just last week and it wasn't that well priced. I do not think buying now is for everyone. I think it depends on your personal situation.

Of course sellers are not taking low ball bids. That is why sales have ground to a halt and inventory is rising. Either sellers or buyers will have to blink and transactions will start up again. I think we are in a stalemate period for the next 6-12 months that will be won by stubborn buyers.

"I'm not going to pay a lot for this muffler!"

Rachel - what you are seeing is called behind the curve. Do you understand why you are seeing what you are seeing? There is a disconnect between buyers and sellers right now, which explains the plummeting sales volume, and subsequent rise of inventory in the past 3 months or so as the credit crisis rose to the surface, claimed LEHMAN, AIG, MERRILL, etc.. and stocks cratered making the pain hit home.

Its not like it happened all of a sudden. It was the result of may factors that contributed to the credit crisis starting back in JULY/AUG of 2007. It only rose to the surface big time 3-4 months ago, where masses started to 'get it' so to speak. Many agents are reporting what you are reporting, with an occasional bidding war situation that may or may not be really true. Tell us the address and unit, and lets see if its in contract in 7-10 days? Then we will see if its real or not. I doubt anyone will jump in a bid just because yo mention it here.

Agents are realizing now that this slowdown is different, but they dont quite get why. Agents are realizing only now that buyer confidence has declined big time, but they dont quite get why outside of stock market collapsing. Agents are just realizing that sellers are anchored to peak prices, and in denial, yet they dont quite get why? Agents are just realizing that the dollar trade and the foreign demand was not really as powerful a force as they claimed it to be when the market boomed, and in fact, that many foreigners that DID buy will have to sell at a loss.

Of course it depends on a personal decisions, its a piece of real estate we are talking here. Not buying GE the stock at $15/share.

The reason real estate is lagging, is because buyers MAKE the market and sellers THINK they make the market and price their properties behind the curve and wonder why no bids come in? And if they do get a bid say 15% below ask, they say NO WAY, my place is not worth that much less. BUT IT IS!

The buyers make the market, period. And the greater fool theory is always in place, yet likely not anywhere near the level it was in place at say 12 months ago when buyers bought to flip because prices never drop.

modern - great Meineke line!

Urban - I completely understand what you are saying about the disconnect between buyers and sellers. However, not every seller has to sell. They might prefer to but especially at the upper-end of the market, they are usually not in a situation where they MUST sell (of course their are exceptions but this is generally the case). As for the unit in a bidding war, all I will say is it is a 3 bedroom co-op on the UWS. I don't think anyone is buying right now with the intention to "flip" in the next couple of years. People buying now really WANT to own in Manhattan. For someone like Modern, of course I can understand holding out another year.

1) The inertia of a rent stabilized apartment in the UWS is great. I've lived in one for the past 6 years, and if I had a 1 bdrm I'd stay until I'm married with kids (note pleural).
2) I'm looking to buy b/c rent stabilized 1 bdrms are hard to come by. I think I will move out in the summer (for quality of life) but renting is still far cheaper than buying. I see the rental market softening, I've seen some really nice deals which I would have taken if not for my lease.

semerun - that is indeed a hard place to find! I will do a little digging and see if I can come up with anything.

best,
Rachel

Agent Rachel:
Thanks but no thanks!

mighty: Manhattan property yields about 2.5%

No, for a typical co-op, rental equivalent minus expenses is about 5%, the same as a muni bond. Plus you get rental inflation protection. A p/r of about 20, which is the long term Manhattan average going back to John Astor. So your basic facts are totally wrong.

Doom and gloomers are fun to read, but Manhattan real estate has done better than just about everything during the sell-off. Smart sellers will hold out for their prices and not listen to brokers who want a quick cheap sale.

happyowner, i have kept hearing that a 12-15x P-R is the "norm". you stating that 20x is the average in manhattan makes me view a lot of potential units i've been looking at a lot differently. can you elaborate on the 20x? (eg, some anecdotal or empirical or just some articles?) p.s. excuse me if this is an ignorant question. thanks.

Happyowner: You're right. So far, you're doing fine. Sort of like this guy:
http://www.youtube.com/watch?v=hz65AOjabtM

I've seen this 12x number over and over and it is just wrong. On another post I ran numbers comparing a $3000 rental to the comparable different monthly ownership costs at differenct price points. 18-20x is much more accurate. Just go through the numbers. On an after-tax basis, assuming an 80% mortgage, the comparable price is in the $650k-$700k range, depending on your tax bracket and common charges. 12x would compare a $3000 payment to a $432k price, which is way too low. Now, the ratio can be used to look at current prices and rents. It does not factor into whether you think prices will be going up or down in the future.

holding out for $200K on a $2 MM apartment ... silly.
Shows somewhat the little respect CitiHabitats gets.

gleeclub - you are right. In fact, a statement was made that 'citi habitats doesnt know how to service a high end listing' after the NO was given. Seeing Corcoran sell the unit for 300,000 less than the offer I procured gave me some justice, in a bizarre way. I wont get into the specifics of the conversation I had with the owners that fateful night in FEB when they decided to 'sleep on' the 2.3Mln offer after discussing it, but I will tell you that I warned of a potentially nasty credit crunch about to hit, from subprime loans resetting into higher rates.

Now I didnt know then (Feb 2007) that it would turn out this bad, as that wasnt evident until about 5-6 months later, but the warning signs were there. I recall this UrbanDigs post on the subject in JAN 2007:

http://www.urbandigs.com/2007/01/credit_crunch_l.html

"Resetting into higher interest rate loans could create a credit crunch down the road that could extend the leg of the housing correction...

UrbanDigs Says: This is something that for the most part is happening outside of New York City right now, but could lead to regulation or tighter lending standards down the road which could eventually affect us. It's an end result of the booming housing market and something to keep an eye on going forward to see if purchasing power is restricted due to rising loan standards. While many banks may have already started to tighten their grip, money is still relatively easy to borrow if you have decent credit and a job. So for now, we are ok; the future, well that's a story yet to be written."

Granted at this time, I had no idea of the destruction of wealth in the shadow banking system that was about to occur, few did. All I knew was that subprime lending was out of control, lending standards went out the window, too many ez loans were made to poor borrowers, and the housing boom would be unsustainable. This was the meat of the discussion with those sellers that night the bid came in, and apprently this stupid broker's opinions didnt matter much.

Ugh, you guys hear of Tanta passing away? She wrote over at Calculated Risk. very sad.

Agent Rachel -- It is not true that people always have the option to rent. In most coops, there are severe if not complete limitations to renting. My former building has never once approved a rental in its 60 year history. Manhattan is full of coops. Also, you can note that rents are not in line with current sales associated costs (Stevehjx, approx. twice the cost?) -- so your "conclusion" that Manhattan is not going to "hit the fan" is so self serving it borders on grotesque. Are you willing to offer guarantees to your buyers and protect them from downside risk? There is a concept, a broker fee clawback as the market moves against purchasers... Hmmm....

Agent Rachel,
Please do not send me any listings. The last thing I need is to be led around by someone who does not represent my interests. "Buyer's broker" is a misnomer as the buyer's broker is paid for by the seller and therefore works for the seller. I would rather walk around with my lawyer but she does not have time and I cannot afford to pay her for that kind of work.

I subscribe to the theory that the fewer people in the middle of the deal means that there are fewer people who can mess it up. No brokers is the ideal, one broker is tolerable, two brokers increases the chances for failure, etc. I am surprised that any property gets sold in this city with the number of people with their fingers in the pie.

As you may have noticed, I am selling my apartment FSBO so please do not steal my listing, I will not respond to any emails from brokers. I am looking for an actual living, breathing buyer, one who can pick up the phone and dial the number of an attorney so a deal can get done.

wow UD, it's a very sad day for me. i've been reading her posts for the last year and a half and love her.

very sad indeed. Sucks.

407PAS - good luck selling without a broker. There is a reason almost all deals are done through a broker and a good reason that over 90% of deals are co-brokered.

Urbandigs, I am shocked that you discuss your clients business here (49 E 96). I find it quite unethical.

AgentRachel
407PAS - good luck selling without a broker. There is a reason almost all deals are done through a broker and a good reason that over 90% of deals are co-brokered.

Yes, and they have a name for it "collusion"

> Also, it is important that everyone here keep in mind that NYC real estate isn't
> going to hit the fan.

This Rachel is another broker idiot, about a year behind the curve... or is just full of crap.
Same party line from 6 months ago, and now proven about as wrong as you could possibly get.

Amazing they still let these people live. I don't know how they live with themselves.

> I've seen this 12x number over and over and it is just wrong

I agree. Its 15 at least. I've seen higher, but it depends on the scenario (maintenance, for instance)

> Urbandigs, I am shocked that you discuss your clients business here (49 E 96).

Not a client... they went elsewhere.

I like that he's pointing out their absolute stupidity.

UD is one of the few honest guys, who called it right, and he should be getting the rewards... instead, idiots keep working with other idiots who promise them fantasies, and ensure this crash is going to last for a while.

NYC10022: I disagree. It doesn't matter how stupid of a decision the seller made. It should not be discussed by Urbandigs on a public forum.

"> Urbandigs, I am shocked that you discuss your clients business here (49 E 96).

Not a client... they went elsewhere."

It's equally unethical, if not more so, to reveal private business information with respect to a former perspetive client who walked away.

If you apply for a loan at Bank A and later decided to borrow from Bank B, how would you feel if Bank A posts your application details on the internet afterwards?

Did I post anyones application here? All I said is the seller decided AGAINST a 2.3MLN offer, and ended up selling at 2MLN. Where is there any personal data or personal account information in that statement?

I think you are taking it to the extreme.

"It's equally unethical, if not more so, to reveal private business information with respect to a former perspetive client who walked away."

What's the "private business information"?

Sorry, but I just don't buy it....

Urbandigs: In my view it's unethical to post info on former clients, any info.

Sales records are public. Not sure how this is being considered "private" info.

I did not post any personal information. Uppereast, you are simply taking what I said and stretching it to the shady area of unethical.

Where was the personal data I revealed? The seller cancelled the listing agreement with me after I procured a bid 100,000 over ask, following 3 months and about 40 showings. I stated they rejected a bid, and I stated where the unit sold for. Where is ethics broken and where did I reveal personal information on the sellers bank accounts as when they applied for a loan at a bank as hvd_free states as a comparison to what I stated?

I know Im in the press a lot with urbandigs and that exposes me to things like this, but seriously, now. I base my business on honesty and integrity. I was responding to HappyOwners statement that sellers should not listen to brokers and should wait for their price. Stating that a 2.3MLn bid was rejected and the apt eventually sold for 300,000 less as a direct result of waiting and trying to get more, is in no way unethical

Now you are giving away even more info. Why do you think the public should know that were sleeping over a bid and then rejected it, that you had 40 showings etc. Honestly, I would not choose you as a broker based on what you posted (and I always had a lot of respect for you).