What's up with the pace of reductions?

It's the slow season. A cut is less likely to garner a reaction right now, so why cut unless you have to sell?

lmao

Of Course!

Sales have tanked... down 75% already (YoY), and we're going into slow season.

I have a funny feeling sellers are just avoiding the subject, and not actively trying to move anything right now...

What's amazing it that inventory has been increasing. Usually this time of year many sellers are taking their properties off the market for the holidays. I have made my last two purchases this time of year because those properties on the market are often those that, for some reason, didn't sell earlier and the owners still need to sell so there is often some negotiability. Maybe so many properties have been sitting for so long that owners aren't as concerned about the freshness of the listings as much this time.

"the longer sellers take to face the music the deeper they'll have to cut".

Why? Becasue you want them to lower their prices? If people are not forced to sell they have no reason to reduce the sales price. If they can hold their property they are not obligated to lower the price. This could be further proof that NYC is more likely to weather this storm than Miami or Las vegas, where the speculators had to lower prices or risk foreclosure. Perhaps many people in NYC will just not sell if they don't get their price.

Waverly, I guess the word "comp" doesn't ring a bell, uh?

And don't tell me it's not a word just because I should have spelled it out in full.

waverly....exactly..and as time passes and inventory dwindles from lack of development, buyers will have less and less to choose from.

The price reductions are generally made late in the week. Nothing going on because of the holiday, 4 day weekend for most. Let's revisit this thread on Thursday. FYI see urbandigs.com, in the last 30 days about 20% of the listings were reduced and about 4% of them sold. So if you wait, chances are 5 times greater the apartment you want will be cheaper than that it will be in contract.

Inventory dwindle? We'll just have to see how many of the apartments in contract go back on the market when the buildings being constructed begin closings. I'm still seeing a ton of residential construction, and the permits issued through June of '08 to take advantage of the 421a abatements were quite substantial. Swig is having a hell of a time because he was financed by Lehman, but a lot of the buildings continue to rise.

I am not one to wish bad tidings on others, but the job cuts are going to continue, and the severance payments for those already laid off will run out. There is this fanciful notion of a borough of home owners all with tons of money in the bank ready to weather any storm. Maybe so, but I don't buy it. New Yorkers are people too, and like the rest of the country we would generally like to get the best, most we can possibly afford, which can only too easily become what we can't afford. But, once again, only time will tell.

stevef,

inventory is not dwindling from lack of development at all. in fact, there is a huge supply of apartments about to be dumped into the market. there is a long lag in development. as for people not selling if they don't have to, that's true enough. it's just that as time drags on the definition of "has to" changes. someone who is transfered to a job in charlotte may not "have to" sell for three months, or six months, or nine months, but after two years it's safe to say he "has to" sell. estates don't "have to" sell immediately, but over time...families moving to the suburbs, foreigners who bought investment properties, people who really need more space, or who have lost their jobs, or most of their savings, etc. etc. as time goes by, they move from the "want to" sell to the "have to" sell category. of course, there are some people who will decide to stay put and not sell. but don't forget that that also reduces the pool of potential buyers, since 80% of those sellers would be looking for other places to live in the city.

"Perhaps many people in NYC will just not sell if they don't get their price."

Until you lose your job.

Be realistic, waverly. They're not going to get their price for another 10 years. Wall Street is not coming back, virtually nobody has $20,000 a month to pay on a place to live, rents are dropping, market-rate rental buildings are paying brokers' fees, giving incentives, brokers (Benjamin James, for example) are giving $500 "gift cards" to help pay for moving expenses.

If you put your property on the market, it's because you want to sell it. Otherwise, why bother.

> there is a long lag in development.

Blows my mind how some people don't get that.

> waverly....exactly..and as time passes and inventory dwindles from lack of development, buyers will
> have less and less to choose from.

Inventory isn't dwindling. Residential construction is peaking THIS year, and its only going down slightly next year. You are talking about 2 peak years. Its going to be YEARS before all the started construction is done.

Not to mention, sales are down 75%.

You're not clearing out ANY inventory at that pace...

BTW 28 price cuts showed up on Streeteasy in the last hour.

Sorry, I blinked, another 10 cuts appeared since my last post 1 minute ago

Speaking of price changes, I think we have some new contenders for the title of "biggest jerks at Elliman":
http://www.streeteasy.com/nyc/sale/358326-condo-203-west-90th-street-upper-west-side-new-york

Hmmm... a $1K increase. Think maybe they're gaming the Elliman website for extra exposure on the list of "new and updated" listings? Doubt it will help much in this case.

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20081126/FREE/811269977/1058&category=FREE&nocache=1

happy and about for you...

Steve has now pasted this multiple times, and still doesn't understand it.
He thinks building permits affect inventory THIS year... guess he just moved here.

(shh... nobody tell him 2008 and 2009 will be record residential construction years in Manhattan)

Prices will be set at the margins, just like what is happening everywhere else. As foreclosures and estate sales clear through the system, a price will have to be established. Take a look at San Francisco to understand what's going to happen here. Your comps are going to be bank owned.

I was looking to buy and actually made 2 offers a while back (both were rejected; one seller came back and tried to accept after Lehman went under). Price drops help, but it will now take a lot to get me to buy within next 6 to 9 months. Just no compelling reason. Only people in the market now are desperate. Spoke with some RE professionals and they all say that people will be shocked when numbers are published in 1st and 2nd quarter.

It's actually quite amazing to me how many cuts there were just today--people are going to be chasing the market down heading into the holidays when sales always slow even in bull markets. no one is selling an apartment right now just for the hell of it.

I can't speak for the whole market, but of the 47 apartments I am following in the West Village, Greenwich Village, and prime Chelsea, not a single one has gone into contract or gone off the market in the last six weeks. Either buyer confidence will remarkably swing up, or prices are going to come down hard and fast.

SteveF - still haven't unloaded those properties, eh? I'll tell you what - I'll give you 40% off of latest comps and you provide seller financing at 5.5%. Deal?

Up to 175. I guess everyone was on holiday.

farquhar...my apts that are 30yr fixed with lots and lots of equity, are filled up with nice happy tenants who pay me every 1st of the month. So why would I sell? I'll tell you what?....ask me again in 30 years as I cash out refi all the way there.

Not surprisingly now there are 286 cuts in the last 2 days.