Apartment Buyers Leave the Money, and Run

Ouch. That had to hurt. I particulary like the broker's conclusion that you won't see that type of value anywhere else downtown. He should have added, "... this month."

well done! better to cut loses as early as possible.

Weird. You don't expect these sorts of stories from the NYT!

Well, Topper, first of all its not in the Sunday RE advertorial section. And second of all the article is just about "those crazy rich people" who have money to burn -- in one case because they decided after putting 10% down that the apartment is too kooky and not reg'lar enough.

it's

It is hard to believe that there are people who would walk on deposits that are my entire housing budget but there it is in black and white. Mind boggling. It makes you wonder about their net worth, what is it, hundreds of millions of dollars?

For most who have ever traded or invested ANYTHING in their adult life, they will ALL tell you that their single greatest trade was the LOSS they took that saved them from an even greater loss.

Yes, sometimes it's better to take a loss and get out before the losses get bigger.

Hard to predict the future, it is. Except that it's yet to come.

No, the people walking probably have net worth under 10 million. It's all about not throwing good money after bad.

In history, have people every walked away from deposits and deposits this great anywhere in USA?

nyc10023, exacty. Better to run away now and live to fight another day than take on a $20,000 mortgage and die the death of 1,000 cuts.

Things were set up differently then - but in the great depression, entire buildings changed hands for less than the cost of construction. Builders of some of the most prestigious buildings today in NYC went bust. If you look at the history of most of the prewar co-ops in Manhattan, there has been at least one distressed sale of the building in the past.

patient09 : you are so right. I sold all the stocks i owned on October 3, and although I took major losses on almost all of them, that was the single greatest trade I have ever done in my life.

That is a very good way to look at things. We have been out of the market since the end of '05 except for minor dabbling and I've never been happier.

read the article...it cites 9 buyers, one of whom is a professional basketball player. so nine individuals make this decision. supposing nine people decided to walk down fifth avenue naked...would that mean there was a trend?

i am not saying that there isn't a major economic collapse..but how do nine obviously high net worth individuals give us any information about the market as a whole?

they don't.

shame on the new york times.

the 9 examples are for this article alone. i can guarantee you a lot more than 9 people have walked away from their deposits lately. talk to any broker who doesn't feel like bs'ing you that day.

how many more? nine? twelve? two hundred?

kind of like the bush administration telling us about how iraq is safer.

almost every new development i have been to an open house for since september has units back on the market from sellers who gave up their deposits. my broker knows of a bunch as well. there was also an article from the real deal in december that mentioned 1 out of every 10 sales not closing. i think its safe to say the number is well into the hundreds.

the data we are getting from our firms (I work for Corcoran) shows that it varies in neighborhood and price range which buyers are walking and or defaulting. The really interesting part is that developers are all taking different approaches on how/when to re-list and resell the units. The smart ones are putting them back on at reduced prices, others are waiting and so it is hard to determine the exact number because they are not declaring it as a default publicly, so it is not very transparent. The overall gist seems to be about ten percent walking, with certain areas and buildings hit much harder than others. The Financial District is harder hit with 20 to 30 percent defaults in some buildings. It also tends to be on the smaller units overall where people are defaulting and walking.
The real issue is that inventory will increase substantially once these developers finally re- release these units for resale publicly, and this is why some are kind of afraid to do it.

I can add one to the list that left $300k on the table for a new loft on Mercer. Another that is desperately trying to find away out of a contract and a current client that signed a contract 9 months ago who probably will walk.

Ah yes those trades you thought you would retire on....then it was "God just let me get back to even".

Pull up the Rushmore and take a look at the apartments listed under sold that are now off market. quite a large number, and as nycbrokerdax pointed out it's also shadow inventory.

I have friends of friends of friends who bought and the Rushmore and now want out or price cuts ala the Brompton buyers. I wonder when they're going to organize...

about ready, I don't quite understand the gist of your comment. Are you saying that even though the list is extensive in "off market" at the Rushmore, it still could mean that they have buyers that will eventually walk away if they don't get a price reduction?

They could, but no this thread is about people who have already left. My post was agreeing with nycbrokerdax's comment that there is alot of inventory out there that has not been reintroduced to the market after people have walked.