From Doug Heddings' blog. Pretty interesting take. Looks like he sees 20-25% down already (more than most are saying here, surprisingly), but sounds like he thinks it might be time to start seriously bidding (aggressively anyway) soon. http://www.truegotham.com/archives/market-insight-hows-the-market.html Having lived through and more importantly brokered through the painful market in the early... [more]
From Doug Heddings' blog. Pretty interesting take. Looks like he sees 20-25% down already (more than most are saying here, surprisingly), but sounds like he thinks it might be time to start seriously bidding (aggressively anyway) soon.
http://www.truegotham.com/archives/market-insight-hows-the-market.html
Having lived through and more importantly brokered through the painful market in the early 90's where homes took 2 or more years to sell and sellers were discouraged from given exclusives, I would like to make a couple of points about current market conditions:
1. Buyers with nerves of steel are getting some awesome deals right now and those who sit back and try to time the bottom of the market...well...good luck to them. I have signed contracts on 4 properties over the last 3 weeks. Asking price of $1.795M sold to my buyer for $1.3M. Asking price last year of almost $5M ($1M overpriced and should have sold last year for $3.7M) selling to my buyers for under $2.5M. One of my sellers who said he would never sell for less than $625K has a signed contract at $575K (as I say to my kids, "he's a good listener"). Another seller is awaiting delivery of signed contract after a 3 week negotiation almost 20% below an already attractive ask. All of these deals are being partially financed (between 50 and 80% borrowed money) at very competitive rates from savings banks or portfolio lenders. CORRECTION...one of these deals is an all cash transaction.
2. I think that a seller's agent who isn't drinking the kool aid and actually provides the service of pricing ahead of the downward curve is a HUGE asset in this market. Just received an email yesterday from a seller's agent informing me that the property has been reduced by 6%...I asked her what planet she was living on as the offer my buyer made 2 months ago at 20% below ask should have been countered and is no longer on the table. ALL bids must be analyzed and taken seriously if a seller really wants to sell. I have no desire to work with sellers who won't listen to current market conditions.
3. There WILL be a price point at which more buyers come back to the market and the smart ones will do so before the lemmings. Credit will ease up eventually and further price depreciation (IMHO) will make buying Manhattan real estate almost irresistible (unless they don't have a job which is a very real possibility). Maybe this is just wishful thinking. We shall see.
4. I believe that prices are down 20-25% from peak levels for deals that are actually getting done "today." What sold last month and certainly what sold 6 months to a year ago is absolutely irrelevant in today's marketplace.
All of that said, buyer anxiety remains high (seller anxiety is peaking too) and I'm seeing buyers who receive accepted offers back out or attempt to renegotiate questioning whether they should have offered less. It will take a strong constitution for brokers, sellers and buyers alike to get through this real estate battleground but I'm seeing (anecdotal of course) some amazing deals getting done. It is ironic that everyone wants to buy a home or a stock (they should not be compared IMHO) when the value is climbing but everyone runs as values dip to attractive buy levels.
[less]
Response by ccdevi
over 17 years ago
Posts: 861
Member since: Apr 2007
now thats an interesting post, thanks
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
bjw, that was an incredibly intelligent post. i don't agree with everything you say, but very reasoned and reasonable. do you have a phone number or an email address? i'd be interested in your advice on something.
Ignored comment.
Unhide
Response by junkman_r_u_serious
over 17 years ago
Posts: 230
Member since: May 2008
Great post, thanks. I still think we have a long way to go on the way down but your insight is much appreciated.
Ignored comment.
Unhide
Response by bjw2103
over 17 years ago
Posts: 6236
Member since: Jul 2007
happyrenter, I didn't write that - it's from Doug Heddings' blog (link provided above). I thought it was worth posting here. He's a good broker and obviously not one to pander to the selling crowd too much. Definitely worth reading.
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
thanks
Ignored comment.
Unhide
Response by Squid
over 17 years ago
Posts: 1399
Member since: Sep 2008
bjw's right on the money. I'm hearing of deals where buyers are backing out completely just shy of signing. In other cases highly desirable properties that might have sparked bidding wars at the height of the market are sitting fallow and dropping their asks, yet still no one's biting.
I think the NYC RE market has quite a way to go before it hits bottom.
Ignored comment.
Unhide
Response by petrfitz
over 17 years ago
Posts: 2533
Member since: Mar 2008
please note that he is talking about 20-25% decrease from asking price. this does not mean the properties have lost any value or the sellers have lost money.
If I was currently selling a Brooklyn Brownstone or other high end property where comps are difficult - I would go out at an elevated asking prive then decline. The reason is that buyers perception is that prices are being chopped, and would pause on any listing that wasnt chopped. So the game today is over price and then chop.
I would wager that this is the cause of a majority of price decreases in today's market.
Ignored comment.
Unhide
Response by bjw2103
over 17 years ago
Posts: 6236
Member since: Jul 2007
petrfitz, I'll take that wager. I do believe those 20-25% decreases are from peak asking prices, but there are certainly examples of properties selling below the prices the sellers originally paid. Take a look at the "If you can demonstrate market movement" thread.
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
perfitz, the decline is 25% from peak comps, not just peak asking prices. i think we are moving into the 30-35% down range very, very quickly. take a look at this and then tell me prices aren't dropping relative to peak comps:
This perfectly decent 5th floor Classic 6 is now being sold for 29% less than the identical apartment on the 2nd floor sold for last year. You don't consider that a price decline?
09/04/2008
Elliman listing temporarily off-market at $1,350,000
11/07/2008
Listed in StreetEasy by Corcoran at $1,395,000
12/03/2008
Price decreased to $1,200,000
Ignored comment.
Unhide
Response by urbandigs
over 17 years ago
Posts: 3629
Member since: Jan 2006
First off, this was Doug's comment on MY POST on urbandigs!
The Buyer-Seller Disconnect
He commented on my discussion, and then put the comment up on Truegotham. In regards to the percentage discount, I stated that DEALS HAPPENING NOW are about 18-20% down from peak levels, and Doug countered and said deals happening NOW are 20-25% below PEAK levels!
So, Doug is saying the market is down a bit more than what I stated. He is prob right. The discussion was about the illiquidity of this market explaining WHY we are down!
755 West End 5C
STREETEASY HISTORY
03/14/2008
Previously listed in StreetEasy by Elliman for $1,595,00009/04/2008
Elliman listing temporarily off-market at $1,350,000
11/07/2008
Listed in StreetEasy by Corcoran at $1,395,000
12/03/2008
Price decreased to $1,200,000
This perfectly decent 5th floor Classic 6 is now being sold for 29% less than the identical apartment on the 2nd floor sold for last year. You don't consider that a price decline?
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
petrfitz always disappears when presented with facts. oh well.
Ignored comment.
Unhide
Response by Squid
over 17 years ago
Posts: 1399
Member since: Sep 2008
Happy--Bet that fool's pissed he got into a bidding war and went above ask! As for 12 and 16, they seem to reflect typical premiums for higher floors, and who knows what 5's condition is in comparison.
Still, though, definitely seems to illustrate downward movement.
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
lol Squid I hope you are joking. He went .9% above ask. I'm sure he is upset, but not because of that .9%! The apartment is on the market for 30% below what the SECOND FLOOR sold for last year. That "seems" to illustrate movement? Come on. As for the premium for higher floors, there is a premium for sure. But I would expect a bigger premium from the 2nd floor to the 5th than from the 5th to the 12th. And even with a reasonable premium, this is a 2004 price point at best, maybe even 2003.
Ignored comment.
Unhide
Response by steveF
over 17 years ago
Posts: 2319
Member since: Mar 2008
hey happy, bjw, squid and stevejhx are already out the door to buy, driving up prices you'd better hurry....:)
Ignored comment.
Unhide
Response by Squid
over 17 years ago
Posts: 1399
Member since: Sep 2008
""lol Squid I hope you are joking. He went .9% above ask. I'm sure he is upset, but not because of that .9%!""
Hey, in this economy that .9% just might have come in handy!
""But I would expect a bigger premium from the 2nd floor to the 5th than from the 5th to the 12th.""
No, I disagree. Not much diff in views, light, and noise reduction between 2nd and 5th floor. BIG diff between 5 and 12.
""And even with a reasonable premium, this is a 2004 price point at best, maybe even 2003. ""
Perhaps.
Ignored comment.
Unhide
Response by Squid
over 17 years ago
Posts: 1399
Member since: Sep 2008
""hey happy, bjw, squid and stevejhx are already out the door to buy, driving up prices you'd better hurry....:)""
As I've said before, if I find the right place, I'm goin' in!
Ignored comment.
Unhide
Response by bjw2103
over 17 years ago
Posts: 6236
Member since: Jul 2007
urbandigs, didn't mean to come off as taking that from your blog. Doug actually posted the whole thing as an entry on his page, which is where I read it. Sorry about that!
happyrenter, I don't think you're an official Streeteasy member until you've personally dealth with petrfitz' antics. Welcome to the club!
steveF, don't read into what I linked to as a sign that I'm buying now. For one, I already own my place, and secondly, if I were looking to buy an investment property, I'd be shopping, but definitely wouldn't be serious until I had a little more confidence that prices wouldn't fall much further. Right now, nobody knows that. You're right that most people will be too slow to pull the trigger, but I'm not looking for a primary residence either, so not exactly worried.
Ignored comment.
Unhide
Response by nyc10022
over 17 years ago
Posts: 9868
Member since: Aug 2008
My read on this is the guy is saying 25% down on average right now, but if you work it, you can get your 30-40% off if you pick the right situation. That often happens before a bottom, there are early panic sellers.
But, to me this doesn't even hint that we're not going down further...
Ignored comment.
Unhide
Response by bjw2103
over 17 years ago
Posts: 6236
Member since: Jul 2007
"but if you work it, you can get your 30-40% off if you pick the right situation."
nyc10022, that's a bit of a misleading argument to make. You can't really say "The market's down x%, so I will bid $y" for a particular property. As always, it's all about comps and aggressive bidding based off those. I'm not sure that's what you were saying, but it comes off that way.
Ignored comment.
Unhide
Response by manhattanfox
over 17 years ago
Posts: 1275
Member since: Sep 2007
too soon
Ignored comment.
Unhide
Response by urbandigs
over 17 years ago
Posts: 3629
Member since: Jan 2006
no worries bjw..just wanted you to know where Dougs comment came in response to.
Ignored comment.
Unhide
Response by petrfitz
over 17 years ago
Posts: 2533
Member since: Mar 2008
happyrenter - i dont think that 1 apartment in 1 building is representative of the entire market. did you also mis my comment "If I was currently selling a Brooklyn Brownstone or other high end property where comps are difficult"
the only thing that you and BJW proved is that you have poor reading comprehension. No wonder why BJW was relegated to working in health insurance and living in Williamsburg....
Ignored comment.
Unhide
Response by bjw2103
over 17 years ago
Posts: 6236
Member since: Jul 2007
Ugh. petrfitz, you have no idea what I actually do, nor do you know anything about my place. Please go back to your cave on Curbed.
Ignored comment.
Unhide
Response by happyrenter
over 17 years ago
Posts: 2790
Member since: Oct 2008
perfitz,
this is the comment i responded to, and i think i comprehended it clearly enough:
"So the game today is over price and then chop.
I would wager that this is the cause of a majority of price decreases in today's market."
So, since Brooklyn Brownstones constitute somewhat less than the "majority of price decreases in today's market," I stand by my response. You have absolutely no evidence to back up what you are saying--in fact, I see apartments at nearly all price points offered at 20-25% below comp sales, if not 30%. If you want to amend your comment please be my guest. But my reading comprehension is just fine, thank you.
now thats an interesting post, thanks
bjw, that was an incredibly intelligent post. i don't agree with everything you say, but very reasoned and reasonable. do you have a phone number or an email address? i'd be interested in your advice on something.
Great post, thanks. I still think we have a long way to go on the way down but your insight is much appreciated.
happyrenter, I didn't write that - it's from Doug Heddings' blog (link provided above). I thought it was worth posting here. He's a good broker and obviously not one to pander to the selling crowd too much. Definitely worth reading.
thanks
bjw's right on the money. I'm hearing of deals where buyers are backing out completely just shy of signing. In other cases highly desirable properties that might have sparked bidding wars at the height of the market are sitting fallow and dropping their asks, yet still no one's biting.
I think the NYC RE market has quite a way to go before it hits bottom.
please note that he is talking about 20-25% decrease from asking price. this does not mean the properties have lost any value or the sellers have lost money.
If I was currently selling a Brooklyn Brownstone or other high end property where comps are difficult - I would go out at an elevated asking prive then decline. The reason is that buyers perception is that prices are being chopped, and would pause on any listing that wasnt chopped. So the game today is over price and then chop.
I would wager that this is the cause of a majority of price decreases in today's market.
petrfitz, I'll take that wager. I do believe those 20-25% decreases are from peak asking prices, but there are certainly examples of properties selling below the prices the sellers originally paid. Take a look at the "If you can demonstrate market movement" thread.
perfitz, the decline is 25% from peak comps, not just peak asking prices. i think we are moving into the 30-35% down range very, very quickly. take a look at this and then tell me prices aren't dropping relative to peak comps:
http://www.streeteasy.com/nyc/sale/364276-coop-755-west-end-avenue-upper-west-side-new-york
755 West End 5C
STREETEASY HISTORY
03/14/2008
Previously listed in StreetEasy by Elliman for $1,595,000
Recorded Sales:
07/09/2007 #2C $1,710,000 +0.9% $1,695,000
02/21/2007 #16C $1,600,000
05/17/2005 #12C $1,569,750
This perfectly decent 5th floor Classic 6 is now being sold for 29% less than the identical apartment on the 2nd floor sold for last year. You don't consider that a price decline?
09/04/2008
Elliman listing temporarily off-market at $1,350,000
11/07/2008
Listed in StreetEasy by Corcoran at $1,395,000
12/03/2008
Price decreased to $1,200,000
First off, this was Doug's comment on MY POST on urbandigs!
The Buyer-Seller Disconnect
He commented on my discussion, and then put the comment up on Truegotham. In regards to the percentage discount, I stated that DEALS HAPPENING NOW are about 18-20% down from peak levels, and Doug countered and said deals happening NOW are 20-25% below PEAK levels!
So, Doug is saying the market is down a bit more than what I stated. He is prob right. The discussion was about the illiquidity of this market explaining WHY we are down!
I hope this clears it up
http://www.urbandigs.com/2008/12/the_buyer_seller_disconnect.html
sorry that post got mangled. here it is properly:
755 West End 5C
STREETEASY HISTORY
03/14/2008
Previously listed in StreetEasy by Elliman for $1,595,00009/04/2008
Elliman listing temporarily off-market at $1,350,000
11/07/2008
Listed in StreetEasy by Corcoran at $1,395,000
12/03/2008
Price decreased to $1,200,000
Recorded Sales:
07/09/2007 #2C $1,710,000 +0.9% $1,695,000
02/21/2007 #16C $1,600,000
05/17/2005 #12C $1,569,750
This perfectly decent 5th floor Classic 6 is now being sold for 29% less than the identical apartment on the 2nd floor sold for last year. You don't consider that a price decline?
petrfitz always disappears when presented with facts. oh well.
Happy--Bet that fool's pissed he got into a bidding war and went above ask! As for 12 and 16, they seem to reflect typical premiums for higher floors, and who knows what 5's condition is in comparison.
Still, though, definitely seems to illustrate downward movement.
lol Squid I hope you are joking. He went .9% above ask. I'm sure he is upset, but not because of that .9%! The apartment is on the market for 30% below what the SECOND FLOOR sold for last year. That "seems" to illustrate movement? Come on. As for the premium for higher floors, there is a premium for sure. But I would expect a bigger premium from the 2nd floor to the 5th than from the 5th to the 12th. And even with a reasonable premium, this is a 2004 price point at best, maybe even 2003.
hey happy, bjw, squid and stevejhx are already out the door to buy, driving up prices you'd better hurry....:)
""lol Squid I hope you are joking. He went .9% above ask. I'm sure he is upset, but not because of that .9%!""
Hey, in this economy that .9% just might have come in handy!
""But I would expect a bigger premium from the 2nd floor to the 5th than from the 5th to the 12th.""
No, I disagree. Not much diff in views, light, and noise reduction between 2nd and 5th floor. BIG diff between 5 and 12.
""And even with a reasonable premium, this is a 2004 price point at best, maybe even 2003. ""
Perhaps.
""hey happy, bjw, squid and stevejhx are already out the door to buy, driving up prices you'd better hurry....:)""
As I've said before, if I find the right place, I'm goin' in!
urbandigs, didn't mean to come off as taking that from your blog. Doug actually posted the whole thing as an entry on his page, which is where I read it. Sorry about that!
happyrenter, I don't think you're an official Streeteasy member until you've personally dealth with petrfitz' antics. Welcome to the club!
steveF, don't read into what I linked to as a sign that I'm buying now. For one, I already own my place, and secondly, if I were looking to buy an investment property, I'd be shopping, but definitely wouldn't be serious until I had a little more confidence that prices wouldn't fall much further. Right now, nobody knows that. You're right that most people will be too slow to pull the trigger, but I'm not looking for a primary residence either, so not exactly worried.
My read on this is the guy is saying 25% down on average right now, but if you work it, you can get your 30-40% off if you pick the right situation. That often happens before a bottom, there are early panic sellers.
But, to me this doesn't even hint that we're not going down further...
"but if you work it, you can get your 30-40% off if you pick the right situation."
nyc10022, that's a bit of a misleading argument to make. You can't really say "The market's down x%, so I will bid $y" for a particular property. As always, it's all about comps and aggressive bidding based off those. I'm not sure that's what you were saying, but it comes off that way.
too soon
no worries bjw..just wanted you to know where Dougs comment came in response to.
happyrenter - i dont think that 1 apartment in 1 building is representative of the entire market. did you also mis my comment "If I was currently selling a Brooklyn Brownstone or other high end property where comps are difficult"
the only thing that you and BJW proved is that you have poor reading comprehension. No wonder why BJW was relegated to working in health insurance and living in Williamsburg....
Ugh. petrfitz, you have no idea what I actually do, nor do you know anything about my place. Please go back to your cave on Curbed.
perfitz,
this is the comment i responded to, and i think i comprehended it clearly enough:
"So the game today is over price and then chop.
I would wager that this is the cause of a majority of price decreases in today's market."
So, since Brooklyn Brownstones constitute somewhat less than the "majority of price decreases in today's market," I stand by my response. You have absolutely no evidence to back up what you are saying--in fact, I see apartments at nearly all price points offered at 20-25% below comp sales, if not 30%. If you want to amend your comment please be my guest. But my reading comprehension is just fine, thank you.