When will prices drop to pre 2006 levels?

Prices have already dropped to 2006 and earlier levels. Now we're just waiting for sellers to catch up.

"I don't feel comfortable giving a low ball offer"

You need to get over your discomfort. Or would you rather spend x% too much just so you can feel polite?

I hope these sellers and developers realize soon that the market has changed and these asking prices are a bit high. Its not about getting over my discomfort, I don't have a problem giving a developer a low ball offer. But honeslty I feel bad for the owner who has to sell their home, and sell it for a huge loss. I always try to imagine his position and how screwed he/she is, the poor person of family loss his/her job, and now needs to sell their home, which is probably under water, and I am going to go in there and offer them an offer that would probably not even pay off their mortgage. I guess its survival of the fittest right?

Most home owners are selling at huge profits (though 25% less than it was worth at peak).

Either the seller suffers (taking a lower offer) or you suffer (higher mortgage payment, less liquid cash, selling for a loss if u needed to sell unexpectedly)

Take your pick

r1cekr1sp1es: Why would you ever feel bad for the owner? You aren't buying anything unless they agree to the price. Besides, if you buy now, you'll probably still be overpaying.

r1,

if you are not comfortable bidding less than the asking price for an apartment, i'd say wait another year. don't benchmark to 2006 prices--2006 was a bubble year and those prices are essentially meaningless now. benchmark to rents for comparable apartments, first and foremost. or if you benchmark to a year, it should be 2004 at the latest.

but i have to say, your discomfort is very silly. if you pay x, does it matter whether x is the asking price or x is 25% below the asking price or even 80% below the asking price? if person A puts an apartment on the market, and you bid 25% less than the asking price and get it, that is exactly same outcome as person A putting the apartment on the market, cutting the asking price 25%, and then you paying the full ask. do you think the sellers will feel better in one case or the other? will they have more money in one case or the other? will their family situation be better in one case or the other? you have to bid what you feel comfortable paying. the asking price should be irrelevant to that calculation.

r1cekr1sp1es,

You need to detach yourself emotionally when making a home purchase. You can not worry about what situation the seller is in. Remember if you go into foreclosure the seller won't be there to bail you out. Buying and selling a home is a business, it should be treated as such. Make low ball offers, I plan on making my offers at least 45% off asking prices just to start negotiations. They may laugh off my offers and then I will walk away. As along as you have cash you have the upper hand, right now investors who have cash are king. Liquidity is the name of the game these days. Many investors were over leveraged and used stocks, bonds and even homes as collateral. Now with lending standards changing and illiquid assets losing value quickly cash is king.

The worst that can happen is they say no then you move onto the next property. Best of luck to you!

r1, if it's a condo then go to www.nyc.gov and use ACRIS to find out what the seller paid. If it's a co-op then that works only if they bought since 2004, but it's still worth digging around for other info about the building and the neighbors.

Is this a joke. If you truly feel bad for the owner, just pay asking and over pay for the unit, that is an option. If, on the other hand, you are not joking, then please dispense with these ridiculous concerns about "low-ball offers." Now is a great time to be a buyer, you have put yourself in a great position, and if you can wait another 9 months, you will certainly see prices well below 2006 levels.

Hey, r1, if you do your homework in terms of collecting information on the apartments you are considering, besides distressed sellers you'll also find a huge chunk of guys who bought before 1997 and are asking up to 500% of what they paid, so don't be sorry. There was a bubble, it is now deflating, some people got in and out in time and have become rich, incredibly rich in some cases, others miscalculated and are either not making as much money or losing some... or a lot. What was your problem again?

prices have definitely dropped in the high end market..but in small one bedrooms, studios they haven't dropped very much, if at all. A $2m apart. drops $200k wow but the seller probably paid $500k so the drop means nothing to the seller who will still get a huge payout. Let's see what happens (and I hope) with studios that are still listing over $400k for one room.

julia, i really feel for you. you keep posting the same comment again and again and again and are impervious to the evidence people provide that things are not as you describe them. take heart, my dear, the market is headed down and you will get your wonderful little studio at a price you will be very happy with if you are simply patient. big apartments are struggling more, but don't worry, studios and one bedrooms are down as well and will be down further. try to relax.

I keep posting the same comment to focus on truth and not fiction or wishful thinking. I'm out there looking.

mh23
about 1 hour ago
ignore this person
report abuse Is this a joke. If you truly feel bad for the owner, just pay asking and over pay for the unit, that is an option. If, on the other hand, you are not joking, then please dispense with these ridiculous concerns about "low-ball offers."

Right on mh23. As someone who has created a good number of fake "questions" for discussion topics to bait the usual people here, this is definitely a fake "question," and I give it a 4 out of 10.

ps - I'm not rufus

julia - when in god's name are you going to move out of NY? I thought you were. If not, can you at least move out of Streeteasy and leave the discussion to adults?

Every,time you say "I wish prices would go down but they don't but I wish they would but they don't how come how come how come" I picture you as a 7 year-old with an underdeveloped brain (for that age), sitting in the corner, staring at the wall, hitting yourself. Am I close?

If I give you a cookie, will you leave the room and stay under the porch?

look, at the height of the bubble, sellers would have no problems making unreasonable demands or have their feelings hurt at the drop of the hat. that time is over - the power dynamic has shifted. truth is, it is a Machiavellian kindofworld, real estate. relish the fact that u now have the power. check out RealDeal - buyers are the ones having bidding wars... for the LOWEST price. you are not low-balling; one must be pragmatic and hedge against future drops in pricing, which will likely continue into much of next year. my advice, which does not mean much (though seemingly more sound that julia aka pollyanna) is to hold off if you have cash. market has quite a bit more to fall. if you are reliant on a mortgage, then you will have to weigh the differences between another 10% decrease in price vs a couple more points increase in your mortgage.

"julia - when in god's name are you going to move out of NY? I thought you were. If not, can you at least move out of Streeteasy and leave the discussion to adults?

Every,time you say "I wish prices would go down but they don't but I wish they would but they don't how come how come how come" I picture you as a 7 year-old with an underdeveloped brain (for that age), sitting in the corner, staring at the wall, hitting yourself. Am I close?

If I give you a cookie, will you leave the room and stay under the porch?"

Agree completely. Julia is either a realtor or married to one, or has some other tie to the industry, although she pretends not to. She pretends to be a renter "who just can't buy because those darn prices still just keep going up, up, up". I'm not buying it. She's either a realtor or she's dumber than a box of rocks. I could be persuaded in either direction.

"She's either a realtor or she's dumber than a box of rocks. I could be persuaded in either direction."

or both

r1cekr1sp1es, if I'm right about where the NYC & NY in general economy is headed in the next few years ( the process began a year or so ago), I would HIGHLY suggest you continue to collect interest on your down payment and be extremely patient.

In the post 1988 peak, it took 4-5 years for this market to begin a bottoming process and it wasn't until the arrival of the dot.com boom that it began to recover nicely. This market has historically required a reason to reverse course from a severe bear market and as far as the eye can see (at least to my eyes) all I see is continued economic contraction, much less any reason for it to remotely recover/stabilize.

I'm patiently waiting the sales reports for the 2009 spring selling season and better yet, the same in 2010. They should be a doozy. :)

I don't think the decline will be a gradual process over 4-5 years. the general macro analysis right now is that what happened in NV and FL where they have experienced similar bubbles which deflated over the last year and a half will occur in NY over a compressed time frame. there is much to believe that this is probable - as a city, NYC definitely has a sense of dead man walking in recent couple of months that was absent when the rest of the country was caught in the subprime crisis. given the large gradient between NYC's real estate price and the rest of the country, it stands to reason that the fall would be much faster cf rest of the country. a quick reversal aka a V trend is unlikely as well - factors that drove the bubble specifically the NYC bubble are gone, if not for good, at least in the conceivable future.

>I don't think the decline will be a gradual process over 4-5 years. <

Thantos, I totally agree. In the post 1988 period i referred to, prices basically collapsed in 1990-1993,4. Thereafter it began a period of stability which a buyer could pick and choose easily from the rubble. It wasn't until there was a very powerful economic stimulus to the financial sector (the tech boom which began in 1995-6) that the market began to attract buyers which gradually soaked up the inventory.

IMO, this remains a dangerous RE market that remains in dream land valuation territory (at least with respect to asking prices that aren't worth the paper they are written on) for which there is little economic basis for.

>>But honeslty I feel bad for the owner who has to sell their home, and sell it for a huge loss. I always try to imagine his position and how screwed he/she is, the poor person of family loss his/her job, and now needs to sell their home, which is probably under water, and I am going to go in there and offer them an offer that would probably not even pay off their mortgage.<<

GET OVER IT! How is any of this your problem? You will fail miserably during the negotiation process if you worry about hurting someone else's feelings. A sale is a business transaction and must be handled with indifference to 'feelings'.

And yes, it IS the survival of the fittest - get yourself fit or you will end up on the losing end.

I'm going to wait 9 months.. this is not a joke. I have been shopping and 1 to 2 bedroom apartments in the Brooklyn area are still priced extremely high. And by the way most developers, will ignore my 30% below the asking price. I just feel like everyone assumes the market has dropped already, but that's not the case well at least not yet.

Waiting 9 months is not a bad move at all.

But--you should continue to look and keep abreast of what the market is doing during that time. Continue to educate yourself so you're ready to pull the trigger when the time seems right.

"I give it a 4 out of 10."

mandalay, 3 at best

Bottoming out could take about 5 years. There is historical precedent. Just wait for the reality to hit the sellers.

"given the large gradient between NYC's real estate price and the rest of the country, it stands to reason that the fall would be much faster cf rest of the country. a quick reversal aka a V trend is unlikely as well - factors that drove the bubble specifically the NYC bubble are gone, if not for good, at least in the conceivable future. "

Agree. No V trend. More like an L...it will drop like a rock and stay there for a decade. Eventually, as with all markets, people will forget the last bust cycle and a new boom will begin...for some reason, that seems to avg about 17 yrs in most asset classes. So, maybe instead of an "L", think of it as a "U"...but over 20 yrs!

lol

i think bidding 70% below ask is where you start feeling impolite...otherwise, feels pretty good...

To all those that don't like my comments...just hit the ignore this person...i'm not going away, ever.

All this "bitch-slap/puta" talk is more than a little misogynistic (& no, I'm not a woman). Metaphors matter.

If it makes you feel any better, I am bidding on an apt this week. My bid will be 43% of the current ask. Ask is irrelevant. In this market, there is no word "lowball", doesn't exist. However, I am extraordinarily offended by the "highasks" That is the word of the new year.

"All this "bitch-slap/puta" talk is more than a little misogynistic (& no, I'm not a woman)."

Just slang, not meant to literally refer to women. Got it, chica?

BTW, you sound like Oprah. "We're all victims!". LOL.

"i'm not going away, ever."

Whew, what a relief. In the same way Letterman and Leno were silently relieved when Bush was re-elected in 2004. I'd hate to see my stupidest, best source of material suddenly dissappear.

Julia, if studios and small one beds haven't fallen as much its either because they can't sell whatsoever and make a mark on the data, and/or they haven't risen much since 2004 especially when considered vs larger apartments. It seems like a decent one bed coop has been $600-700k since 2004.... The small ones have been $400-500k and the studios under that.

Does anyone else thing the abundance of data vis a vis the internet can shock us down faster than the 10-15%/yr march of 1990-1994?

Here's a question, 2 bedroom 2 bath apartment two blocks from McCarin Park in Greenpoint, listed by The Developers Group for $610,000. May I add this place has no view of the park or city, just the apartment building next door. And what is up with all these apartment builidings with elevator's opening up into your apartment!! I really dislike that idea, I feel its tacky and they really try to sell you on it. I would consider making a offer on this apartment, but I feel it is highly overpriced what do you guys think is a fair price? $400k? Man it would really be something if I can get it for under $400k!!!!

Rhino86...studios were selling in '04 for $250k...I bought then. Now studios with an alcove in need of complete renovation are selling over $400k..they have risen and have not gone down yet.

Here's a snack, julia. Now go back under the bed.

"they have risen and have not gone down yet"

LOL

You bitter bears sure like to lash out at julia. Sorry her observations on the market don't appeal to you all.

julia's comments are pretty accurate. Under 400k is pretty lousy stuff, still. Sorry, bears.

i think that's right, based on what i can see. maybe what julia is seeing is the same as some of the other posters on curbed too. does anybody also read curbed?

julia, where can you get a studio for less tnan 400000 or are you saying you can't? i think maybe you're right.

liccoment and happyowner - i think maybe prices will keep going up then. do you think prices will keep going up too? i'd like to hear your opinion on prices, for this year. are a lot of people still buying apartments? that would be why, right?

julia and liccoment, i'm thinking of a studio that i saw today which is why i'm asking you. because it's 450000 which they're asking and the broker says i'm going to have to buy it fast and that she thinks the studio will sell for more than 450000. but then some others seem to sya that prices will come down but she says it won't. what's your opinion?

It seems to me Developers Group is living in a dream world with their asking prices in WB and Greenpoint. r1cekr1sp1es the prices in WB and greenpoint have a long way to fall. You owe it to yourself to set the bottom price because no matter what you bid (below asking) DG will come back at you for more. Here is an example listing of what I think will be happening with places the Developers Group is trying to offload now. It is a good comparable because it shows what happens a few years after the "newness" wears off.
Here was the sales listing:
http://www.streeteasy.com/nyc/sale/316479-condo-198-roebling-street-williamsburg-brooklyn

Here is the rental listing:
http://www.streeteasy.com/nyc/rental/412392-condo-198-roebling-street-williamsburg-brooklyn

Hope this helps.

Howie, are you serious? The market is -20% but the idea studios have held up is to be taken seriously? Will a bank even lend on a studio at this point? Its not clear what there is even to argue about when ellimans own report admits that contract prices are down 20% since August. The $250k studio from 2004 that people are suggesting is worth $400k would be lucky to close at the same $250k today. I think the daddys that bought their kids studios and live back home in the midwest are a little removed from the fast changing reality of the manhattan market.

howie,

i have to assume you are joking. a broker told you you have to buy fast and you are taking her advice seriously. no, howie, a lot of people are NOT buying apartments. volume is down between 40-75% and inventory is way up. we don't need to guess about volume, we have the data. prices cannot 'keep going up' because they are already going down. they could 'start going up.' but what would cause that to happen? you need to think things through a little more clearly. and never, ever, ever rely on the person selling an apartment (that would be the broker) to give you an accurate picture of the market.

studios have not come down..401 east 74th street alcove studio...$479k. The alcove studios have not come down...My lease isn't up until October so I'll keep looking or else I'll rent for one more year and then I'm out of here.

I saw something at 200 Chambers had gone for 700 back in 2006 and now for over 1.1 million

happyrenter and rhino86 - thanks for the advise. maybe i'll wait then. but julia and liccoment are saying prices wont come down. maybe their wrong, do you think so?

julia, remind me - you've said before that you're a small business owner. what kind of business is it?

plantar--you are talking about ASKING PRICE. i can ASK 10,000,000 for a piece of bazooka chewing gum. you need to look at what things are actually selling for. that has nothing to do with what it will actually sell for.

and howie, please, do some research. look at what is actually going on in the market. yes, i think they are very, very wrong if they think prices 'won't come down.' prices already have come down and barring something very strange they will come down a lot more.

Farquhar: yes, Julia has claimed in the past to be a business owner. But does collecting cans and redeeming them qualify as a small business?

Howie: please take advise [sp] from Julia, Liccomment and happyowner.

Better yet, take my advice: I think you should buy my apartment. Let me set the price. It will almost definitely go up in value. I'd do it. But I'm an aggressive gambler. Mr. Vegas.

beatyerputz, that's what I thought. Yet on another thread she claims to be collecting unemployment. neat trick, if you're self-employed.

Which means julia is either a fraud/liar, or a fictional character. I recall that West81st also pointed out some massive inconsistencies in her story about moving here/buying/selling/renting. Julia, please tell us how you can collect unemployment as an existing or even former small business owner.

I had a business in south florida and new york...I have closed both. I am currently unemployed and yes collecting unemployment. I paid taxes and yes definitely I can collect...I wasn't sure myself but yes, yes, yes.

I have never posted on a site until streeteasy and am amazed at all the hate out there. Streeteasy is all about real estate and the knowledge i have learned from the majority of posters has been terrific. I will never, ever stop posting..

Julia, why don't you take a couple weeks off from streeteasy. Whether you are telling the truth or lies, just take a break for a bit.

Why should I give in to the haters...what lies???? studio prices have not come down? people can't handle the truth. I'm not some wilting rose...i choose not to respond to the hate...

I read this whole thread and just realized your name is beat yer putz.....very funny!

Julia, No co-op board will approve you if you are unemployed or if you can't show you've had steady income for over a year. You're kinda screwed in that regard, even though prices are going back down to 2004/2004 $600 psf

> You bitter bears sure like to lash out at julia.

Why would a bear be bitter these days?

;-)

Re: Rhino86: "Will a bank even lend on a studio at this point?"

Well, it would seem that studios, being the lowest price point, are a place where an investor would best be able to afford an all cash purchase. That could explain why studios remain more competitive than larger units, at least for now.

Also, there is some sentiment out there that RE is a decent long term investment for parking money (given that Treasury yields are so low). I can't say I agree, but at least an apartment is a real asset that would (tend to) go up with inflation. That may be enough of an advantage for some people to go into it.

That would be a good point if studios had in fact remained more competitive (whatever more competitive means)... Also anyone with cash enough to buy a studio outright wouldn't buy a studio... If by investor you mean buy a condo to rent, the math doesn't work well even all cash. The 'income yield' of rent over cc and tax is tiny. But thanks for playing.

julia, don't mind the sideliners hoping to snatch said studio under $200k. it's not your fault they can't use the search function. don't wet your tampon over it, they're just hoping..hard.

I agree not having a job and being self-employed would hurt with a co-op board but if prices ever come down to $250-300 for a studio I would pay cash...if rents keep coming down I'll be thrilled to get a small one bedroom non-doorman for $1800-$2000 with a two year lease.

Julia,

There are studios like that right now. This took 5 minutes and they are all $299k ask or below:

http://www.streeteasy.com/nyc/sale/373310-coop-205-east-89th-street-apt-2-b-yorkville-new-york

http://www.streeteasy.com/nyc/sale/356139-coop-415-east-80th-street-yorkville-new-york

http://www.streeteasy.com/nyc/sale/359088-coop-435-east-85th-street-yorkville-new-york

What are you not seeing?

I think I looked at one in 205 E 89th in 1996 for $40k. At that time you could rent something like it for about $900 a month. Now that's probably a $1500/month rental. I wonder where it should settle. $150k seems too generous.

I have to say that I don't know the studio market at all, but Julia seems to keep saying that there are no studios for sales for $300k. This is just not accurate, which is shown by these properties (and there were numerous others) that are all at $229k or lower asking price. If you look at studios with asking prices up to $350k or $375k you will get even larger/nicer studios and they are going to sell at a discount from their asking prices.

Its beneath argument that in a market where Elliman admits that contract prices are down 20% that studios, which are always weakest, have held up. If they appear to have held up, its a function of more delusional sellers than average and/or an ever greater dirth of tranactions from which to judge leading edge reality.

first time buyers are coming into the market, hence the stength in entry level apartments

dearth of transactions--ding ding ding. it is difficult to get a definitive read on this market because so little is selling. but just because we don't know exactly where it is doesn't mean we can't say certain things for sure, and one of those things is that studios are selling for a lot less than they were six months ago. most of them aren't selling at all, of course, but believe me, if you want one, you can get one for 20% or 30% below last year's price. doesn't mean it would be a good deal, but it would certainly be a better deal than it was last year.

I think the challenge for studios is that they can only increase so much. You get to a certain point and it makes more sense to buy a 1 BR. But, I am also of the belief that new development condos will be hit the hardest, followed by the ultra-hi-end part of the market. I think 1BR and 2BR coops in good neighborhoods will be hurt the least.

hurt least still means hurt, my friend. sure, i don't expect a 2 bedroom in a nice prewar coop to take the same hit as a dumpy 10 million dollar two bedroom at the plaza. but that doesn't mean it won't be down 20, 30, 40, or 50%. it just probably won't be down over 80% like the plaza crap.

Condos will get hurt more for one reason and one reason only....leverage. They were driven by 10 to 1 leverage whereas coops on average are 5 to 1. The spread blew out on condos and it needs to contract...Add to that a falling market.

Nyccondoowner....shush.

> I think 1BR and 2BR coops in good neighborhoods will be hurt the least.

In bad manhattan markets, 1 bedrooms historically get hurt the most and studios and 2 bedrooms do better.

The logic is that 1 bedrooms are usually bought by people who don't "need" to buy... single folks generally... and in tough economies they're usually not willing to take the risk. Studios, for whatever reason, don't see as big a drop in demand, partially because many are pied a terre. Much of the logic is debatable, but the stats have shown this in multiple downturns.

Alcove studios, Alcove studios are selling for over $400k...waverly, the listings you posted are straight studios in small walk-up bldgs. I just sold my straight studio. I've been posting about the lack of alcove studios in elevator or doorman bldgs for under $400k. 401 east 74th street..$479k. I agree with you that financially one bedrooms have more room for mark-up but I was looking for an alcove studio to live in forever. I would have renovated it into a one bedroom (converting the alcove).

235 east 22nd street great bldg, great layout for a studio $400k just reduced to $395k WOW get out my checkbook!!

Julia instead of prattling on why don't you offer $300k on one of these alcoves supposedly commanding $400k?

Rhino86...shocking to you but I have offered $350 for the place on 22nd street and was rejected immediately. Prattling...you're showing your age I don't know of anyone who uses prattling.

Is prattling a generational word? I am 35. Nothing shocks me, other than the fact you are anxious to buy a studio in a market that only just started rolling over three months and 20% ago after doubling in the last four years, after doubling in the prior four.

I never said I think prices "won't come down." However, I think things will not be as bad as 90% of the bitter commenters on this board think it will be.

Why would the folks who called the market down be bitter?

wait, i thought it was the owners losing their shirts who were bitter. to be a renter flush with cash in this market is not a position that warrants bitterness.

Rhino86...I apologize for being rude..it's been a rough few months. No excuse..

NYC - I have seen those numbers too, but I wonder if in this downturn studios don't suffer more than usual because of their huge increase in price. If they don;t go down significantly, but 1 BR's do, the spread would be too little and a reasonable person would just pay a little bit more money for a lot more space and potential.

Thoughts?

I don't know why they are bitter nyc10022. They just are, in shows in their comments. Maybe because they have been renting all these years, would rather own, think that prices should be much lower than they are now, and are bitter that after all the market problems, they still are renting. That is probably why they come on here and root and hope for a total market crash and get frustrated that we've had a rational downturn rather than a total crash so far.

20% in three months is rational? The bottom line is buying was smart if you bought before 2004 (and moving backward fast), or bought and sold between 2005 and 2008. So no one who has taken a pass in the last four years really feels frustrated at all...The people who bought after 2004 and held are the frustrated ones. -20% is the contracts that have been struck, so arguably -20% is already in the rear view and to strike a contract today would be even lower. No one is frustrated here by not owning a falling asset at a high cost basis. Sure, do I wish I bought in the 1990s? Hell yeah but I didn't have the money. Its all the late hot shit owners who are dying to beleive that -20% is going to hold, but its a pipe dream because thats just not the nature of momentum...and momentum is human nature.

> They just are, in shows in their comments

Perhaps in the past... but looking at the last month or so, its looked like the exact opposite to me... a LOT of bitter from what seems to be current owners defending their buys.

Times have changed.

Hell, there are multiple bulls who are complaining that bears are being gleeful. Can't have it both ways...

LICComment, I respectfully disagree. I purchased in 1996, sold and purchased in 2004 and sold again in 2006. Why, 'cause I've seen enough bubbles to recognize one when I see one. I addition, serious financial storms were developing big time i the west coast. It would be an error to blow off developments of those economies when one considers CA has by far the largest economy in the USA and 7th largest in the planet. NYC may be an island but its economy is far from being the same.

Valuations remain in Disney Land territory and yet rents continue to fall off a rather steep hill. NY commercial RE is in a world of hurt and that situation is far from hitting anything that resembles a wooden floor. These are the facts and no way to sugar coat them. Not bitter at all but the facts are what they are & readily available for anyone see.

I've take a licking in a RE investment before and if one wanted to see bitter, I was there in spades during that time. There were not many pleasant options available. I my view, sellers can get bitter but buyers are in the driver's seat most of the time, unless there is a bubble in the making.

Finally,,,,,I just saw three listings for alcove studios under $400k..is this the beginning? I don't know but I'm feeling more positive and also because rents are coming down.

Julia: "Rhino86...I apologize for being rude..it's been a rough few months. No excuse."

You're goddamn right it's not, sugartits.