Serious Question

they haven't

I've been signed up for a "decreased price >5% >$4m etc" search for at least 6 months in certain areas, I used to get a few per week. Starting about 2 months ago they went up to about 1 per day. Today so far I have received 4.

I have been keeping an eye on the rental market and rents didn't really start falling until the Lehman bankruptcy, but they have fallen significantly since then.

modern....of course the prices are decreasing in the $4m range they're crazy high to begin with. 5% reduction is nothing is the seller paid $500k and will now sell for $3.5m.

Credit availability has s8cked since roughly August 2007. This has led to a buildup in the pipeline, but the stall became complete when Lehman died. Since then, the prices at which *rentals* have closed have dropped significantly -- probably about 10% depending on which submarket you're looking at -- and have arguably dropped more in real terms since broker fees are coming down at the same time.

In terms of *closed sales,* price per square foot is just starting to come down -- down 1% in the recent 4th Q reports -- but some of that reflects new development closings of contracts that could be as much as a year old.

Jonathan Miller of Miller Samuel, an appraiser who puts out a report for Elliman, argues that the prices at which *contracts* are being signed now is roughly 20% lower than peak contracts. In terms of closed sales, this is probably a 7% percent drop in 4Q. These are numbers we're seeing on barely any volume at all, because the sales market died when Lehman did.

The prices that you are seeing are "list" -- which are marketing prices. Their decreases may or may not reflect an attempt to reconcile to real prices. Some list prices reflected reality before, and are following the market down; some were aggressive before, and still aren't anywhere near clearance.

Since sellers are all over the map, I would urge you, as a buyer, not to put too much credence in the list prices that you're seeing, or even their patterns. If an apartment is going to clear at $1MM, a list price drop from $1.8MM to $1.5MM may or may not convey the appropriate information to you.

ali r.
{downtown broker}