WSJ: New York City Real Estate in ‘Dramatic Slowdown

"Many deals negotiated before September have been redone at lower prices,"

I disagree with that. WHen you sign a contract, you cannot "redo" the deal at a lower price. A contract is after all a legally binding document.

alpine,

what are you talking about? the legally binding terms of the contract generally entitle the developer to 10% of the purchase price if the buyer backs out of the contract. it does not bind the buyer to actually complete the purchase. if the developer feels that the market has declined more than 10% he certainly will renegotiate the deal to hold on to his buyer.

But the pasaage did NOT say that buyers have walked away. It said that deals are being "redone" at lower prices. And most developers will not reneogitate prices because then it hurts the buyers who already bought and brings down comps.

And such a practice is not limited to new developments. Co-op buyers have tried the same stunt:

http://www.nytimes.com/2008/12/14/realestate/14deal2.html

I think "redos" are most likely to have occurred on resale deals where the financing contingency kicked in due to tighter credit, giving the buyer an out.

alpine,

please dont try to get caught up in the details. Its the context of the statement that matters not the litteral word by word meaning.

Contracts definitely can get renegotiated. If I was a seller and I wanted to get out of a house and I knew the buyer may walk I to would renegotiate because if I stuck it to the buyer he would say f'off and walk away. You can get the lawyers involved to collect the 10% good luck holding on to the 10% once they are there.

Also - as a person who has recently sold a house financing has become challenging for the buyer. In my case We agreed to a sales price of X. The bank required 3 different appraisers to appraise the property before they gave the buyer that financing. 2 appraisers came in with the number and the 3rd came in at 5k lower then the agreed selling price. I had no choice but to give 5k to the buyer - otherwise the deal would have went through and I would have lost that 5k trying to find someone else.

> But the pasaage did NOT say that buyers have walked away

Yes, but the stats do. The crain's article about 2 weeks ago (posted here) said 10% of condo deposits are being walked away from...

My goodness, how could buyers NOT walk away in this environment?

If the buyer walks, it is usually a given that you get the 10%. As a seller, I would not let the buyer shake me down because I would personally rather NOT sell the house and have an extra $80,000 in my pocket. I'm in no rush to sell.

i guess there could be sellers out there who don't share your perspective alpine292.

> I would personally rather NOT sell the house and have an extra $80,000 in my pocket

Smart move. Lose $200k to put $80k in your pocket.

alpine,

if you are that unmotivated, why are you even listing your house at all? in this market you need to be aggressive to sell anything. just because you would rather sit on a wasting asset than renegotiate a price does not mean that all sellers take this attitude.

Personally, I don't think anyone is that cool with losing that kind of money.

I think he thinks he can keep the market from falling more if he convinces enough people that sellers aren't desperate...

that's possible. but it's also possible that he just doesn't really want or need to sell. which is fine, but it just makes no sense to keep the house on the market if that's the case.

btw, where is bjw to tell us we jumped the gun on our predictions?

Right here nyc10022. Being right at a later date certainly does not justify making conclusions before there's solid evidence.

nyc10022 you hittt the nail on the head, LMBBAO @ bjw2103 you must be a lawyer or flunked out of law school or a disbarred attorney.

> Right here nyc10022. Being right at a later date certainly does not justify making conclusions
> before there's solid evidence.

Amusingly, its the *same evidence* you didn't pay attention to last time either.... contract signings.

And making conclusions about the current market off 6 month old data - as you have done - is certainly no more "solid" than the contract data.

nyc10022, you complain about strawman arguments, but you're making pretty blatant ones here. I don't really like the contract data because there's much less of a historical precedent there, so solid comparisons aren't really there. Does that mean that I'm saying you're necessairly "wrong?" No, but I think you make grand conclusions a bit too carelessly. The market reports lag, there's no question, but they provide some really solid data that we can feel pretty good about comparing over many time periods. The closest thing to that is the collection of market movement threads we've got here, but guess what? Those lag too because we have to go off closings. That's just the nature of real estate. I'm not opposed to conjecturing to get a better feel for what's going on right now - but let's be reasonable and accurate with our statements.

nyc10022, if the comps & data don't benefit bjw2103 he's against it. bjw2103 is now realizing he is priced in forever because RE only appreciates.

> I don't really like the contract data because there's much less of a historical precedent there, so
> solid comparisons aren't really there.

That makes absolutely no sense...

> but let's be reasonable and accurate with our statements.

Working off 6 month old data is neither reasonable nor accurate...

No, I am not desperate to sell. ANd as I said above, if I negotiated a sale with a buyer for $800,000, and they tried to shake me down for $50,000, I would tell them to jump into the river and I would keep the $80,000 deposit if they don't show up at the closing.

"That makes absolutely no sense..."

It does actually - if you can find apples-to-apples historical data on contract prices (NOT sales prices!) then we can talk. Otherwise we should keep using actual, closed sales. That's what the market movement threads have been doing.

"Working off 6 month old data is neither reasonable nor accurate..."

First, it's not all 6 months old. Closings take place at different times. Second, you're going to have to come up with something a bit better than "no" as justification for why it's not "reasonable nor accurate." How is it inaccurate? These are actual sales!

> if you can find apples-to-apples historical data on contract prices (NOT sales prices!) then we can
> talk.

Contract prices become sales prices. And, you certainly can't have a sales price without a contract price.

That being said, the Miller Samuel numbers were contracts signed vs. contracts signed... so you're still grasping at straws.

> First, it's not all 6 months old.

Yes, some is even older.

> Second, you're going to have to come up with something a bit better than "no" as justification for
> why it's not "reasonable nor accurate." How is it inaccurate?

I did, you just keep skipping it.

How about contracts signed before a market meltdown begins are neither reasonable nor accurate measures of what has happened to prices in that meltdown. I'm figuring you understand straightforward logic, no? They covered that in my 8th grade math class.

"Contract prices become sales prices."

Not all of them. Ergo, not really comparable. Sorry.

"Yes, some is even older."

And some of it isn't.

"How about contracts signed before a market meltdown begins are neither reasonable nor accurate measures of what has happened to prices in that meltdown. I'm figuring you understand straightforward logic, no? They covered that in my 8th grade math class."

nyc10022, if you listened to what I said, you wouldn't keep repeating this. I fully acknowledge that there's a lag, but a) until you can find better data (that would include enough historical data), we really have to go with closed sales, and b) there's really no way to quantify how many happened before "a market meltdown." You're also suggesting that there's a concrete date attached to this "meltdown," which I don't think is true. People who signed contracts were not living in a bubble - you were not the only one following the economy, and this did not happen overnight. You're just casually dismissing all this. You know what else they do in 8th grade? Resort to insults when they don't really have a good argument.

> "Contract prices become sales prices."
> Not all of them. Ergo, not really comparable. Sorry.

That is completely illogical. Sorry.

> a) until you can find better data (that would include enough historical data)

already covered, we have it...

> You're also suggesting that there's a concrete date attached to this "meltdown,"
> which I don't think is true.

Stop thinking, start reading then... its October. Take a look at the dow. The clear game changer was October, in MANY ways.

> "Yes, some is even older."
> And some of it isn't.

Great logic. Not all the "accurate" data you are talking about is horribly outdated. Some of it is just fairly outdated. Case solved!

"That is completely illogical. Sorry."

No. This is extremely basic - you're trying to compare two things that are related but not like. You cannot do that.

"already covered, we have it..."

Where? The Fed Beige Book? Please.

"Stop thinking, start reading then... its October. Take a look at the dow. The clear game changer was October, in MANY ways."

So you're saying the DOW is directly correlated to the decline in real estate in this city? This is a MUCH broader economic situation; you cannot isolate a particular date or even a month. Don't be condescending.

> No. This is extremely basic - you're trying to compare two things that are related but not like.

Incorrect. They are not only related, they are exactly the same in many cases.

> You cannot do that.

Sorry to disappoint you, but its already been done. I'll go with the two appraisal firms over the guy on the message board.

> Where? The Fed Beige Book? Please.

Yes, and the second set above.

> So you're saying the DOW is directly correlated to the decline in real estate in this city?

Yes, though not necessarily causational. The RE mindset clearly changed in October, it was the month of brokers screaming "its over" with the crazy lady saying prime apartments had dropped 25%, bla bla. It was the month everything changed. The dow was part of the mix, but not the cause.

It also happens to be the month the contracts hit the floor.

> This is a MUCH broader economic situation; you cannot isolate a particular date or even a month.

We're not talking about the broader economic situation, we're talking about the shift in the NYC RE market. We can absolutley isolate a particular month.

> Don't be condescending.

When you can show me the way, let me know...

"They are not only related, they are exactly the same in many cases."

Ugh. You have either never taken stats or have forgotten much of what you learned. You're essentially telling me that because we have a population with 100 15-year-olds that in 50 years, we'll have 100 65-year-olds. Not true.

"Sorry to disappoint you, but its already been done. I'll go with the two appraisal firms over the guy on the message board."

Which two appraisal firms? Miller Samuel uses sales prices in their reports, not contract prices. You are "the guy on the message board" here.

*we'll have 100 65-year-olds AND we can readily compare current 65-year-olds to 15-year-olds.*

Sorry bout that.

> Ugh. You have either never taken stats or have forgotten much of what you learned. You're
> essentially telling me that because we have a population with 100 15-year-olds that in 50 years,
> we'll have 100 65-year-olds. Not true.

You don't quite have the grasp of logic. The correct parallel would be that in 50 years, the 15 year olds would be dead or 65. Death doesn't change the fact that those alive have aged 50 years, or that 50 years have passed.

You are confusing different sample sets with a corrosion of actual data.

Hence your points being illogical.

> Which two appraisal firms? Miller Samuel uses sales prices in their reports, not contract prices.

And Miller Samuel also did the contract price analysis. I believe Miller Samuel and MMJ are different companies, no?

> You are "the guy on the message board" here.

Who is being childish now?

"The correct parallel would be that in 50 years, the 15 year olds would be dead or 65. Death doesn't change the fact that those alive have aged 50 years, or that 50 years have passed."

Read my last point - in short, you're projecting contracts to sales. The problem is there is no recorded measure of contract prices - we record actual sales prices. They are different things.

"Who is being childish now?"

By quoting something you wrote? Ha!

> By quoting something you wrote? Ha!

"I know you are but what am I" is straight out of the Pee Wee Herman textbook....

bjw2103, does talk like a whinny 24 Y.O.