My experience with the Greenwich Village real estate market as a new landlord.

wonder if the same applies to buyers, I been looking at some places to buy in the west village and I have to say I am seeing open houses pack with people. Not sure how many are real buyers and how many are just looking but there is traffic out there. I know that SE is all doom and gloom, but I think the Village will hold its value trough this recession.

hey people are buying cars too--ford's sales may be down 50% but they still sell cars every day. and -- at its worst-- 25% of the country thought that George Bush was doing a great job. restauarants are open...they just can't fill the tables anymore.

nice sarcasm columbiacounty, the question that matters for me is at what point all that traffic on the open houses translates into actual offers. I mean weather is nicer now and people hear all this news about deals so why not visit open houses. Not so sure how many of the people just looking are actual buyers. As a buyer I have this bad feeling that maybe I am waiting to long or I should increase some of my offers.

I think the village has a special draw due to nyu and the community feeling. It speaks to Location, location, location....

those shifts are expected. couples renting a studio are now able to rent a 1br for the same price, so they switch places. people that thought they needed to buy in bronx are now looking to buy in upper manhattan. those that were looking there go for the UWS, all that is going on. but, that doesn't mean that prices are not going to keep on falling. people upgrading for the same money doesn't keep prices from falling if new demand doesn't show up for the low end units that are left vacant.

Still SE is all doom and gloom, I think its a bit overdone. I am sure prices will continue falling and I am sure as hell that this economy is still pretty much under water; however I don't believe that Manhattan real state is going to fall smoothly and evenly. I think neighborhoods like the west village will hold value while others will fall more harshly. I also think that by the end of this summer we shall see an eventual decrease in inventory. Simple seasonality on the sales indicate that more buyers will be out there and some will bite. Please feel happy to smack my ideas to the ground as a buyer I would love to hear them, sadly I think all the gloom and doom is a bit overdone.

thanks graziavi for your post - appreciate the input

buyers will bite if prices come down significantly or some outside event (oil discovered in central park!) provides a boost. we are really past doom and gloom and into the stage of seeing what is going to happen.

you should see volume rise dramatically before there are any price rises. none of that has come close to happening yet.

I see so we basically saying that unless we see people lining out outside an apt to see it, we should not care. I think people are filling open houses now and it is great for the seller in theory. However I am not sure how much of it is just people looking vs actual buyers. I see the amount of transactions in the market and it is low, I think for me as a buyer I am seriously considering pulling the trigger now and deal with the consequences later. So I am happy to hear somebody's point and make me feel like an idiot so I don't do it.

santaoct -- inventory will not be down in NYC b/c there is a tremendous amount of new constuction that is wrapping up every day.

Plus, people will continue to die, continue to divorce and continue to have too much debt. Certainly we can expect the number of estate sales to stay constant, I'm not sure if divorce rates go up or down in a recession, and I think there were many, many people who have closed in places like the Orion or the Platinum that cannot cover their monthly payments (b/c they bought these units as investment properties to let out). eventually, they will have to sell as well.

lots of inventory does not mean there are not sales, it just means that there is more supply than demand which econ 101 says pushes down the price.

will not call you an idiot because it is clear that you want to be pulled back from precipice. slow down a bit...you are in the driver's seat...enjoy the research---the looking, thinking & talking...it will only help you when you finally find the right place to know that you have.

but no trigger pulling...not yet.

Sorry, I think the double negative in my last post was confusing -- I meant to say that inventory will certainly continue to go up the next 6-12 months.

> I think for me as a buyer I am seriously considering pulling the trigger now and deal with the consequences later. So I am happy to hear somebody's point and make me feel like an idiot so I don't do it.

Just read some of the thoughtful posts on this board about cap rates, employment trends, the lag vs the rest of the country, income and property taxes, the shadow condo inventory, populist attacks against Wall Street - you want to weigh that against a tertiary indicator at best - open house attendance?

The brokers on this board have absolutely ZERO to go on. They're not even trying to say the market is bottoming soon - they are using the fluffy "own for your emotional well-being" "you'll do fine over 10 years" arguments or the cherry-picked anecdotes ("I have a bunch of rich Siberians and Kenyans looking to plow millions into condos").

It's momentum down until there is a reason otherwise and open house attendance isn't it. Prices fall but on much higher volume is a much better indicator; prices rise is the best indicator.

santaoct-- high value neighborhoods like the village and west village will most likely have less inventory and not quite as drastic price cuts. So if this is where you would like to be keep a close eye on what's going on. Also watch what's happening with interest rates a 1% point increase could be more important than another price cut. I agree with cloumbiacounty. Enjoy the process. But when things start to change it could happen very fast and in the better parts of town.

the one thing that i am sure of is that when it happens it will not happen fast. this is the old broker crap which makes me sick. act now or ...

ignore it.

when it happens, if it happens, it will happen in fits and starts and then if all goes well, sellers will get it and we will have a real market again. beware anyone who says anything that urges speed --- broker talk for pay me.

well thanks guys, but this is my argument. I been bidding on a place on the west village. I still think I am the best offer out there. Simple reason the unit price has come down recently. I think the seller needs to sell for personal reasons that I wont discuss in a public board.

I went to the open house because it's been a month since I put my second offer on the place, and I saw a lot of people on it. Being the village I saw a few rich kids with their rich parents looking at the place. I finally got a minute to talk to the broker and told her that its been a while and that I want to see the place again. She went gang ho on me telling me how this is a complete different market that when I put my offer and that this particular unit is getting lots of attention. My reply was simple has somebody beat my offer yet, she went quiet. I just think they hope that the increased traffic will translate in more offers. And this is where I am feeling trigger happy and thinking in calling the broker and increasing my offer a bit.

no, no , no.....i cannot believe that you have left your offer open for this long.

call her and tell her that you have rescinded the offer based on what she told you about the market change.

than lets see what happens.

Here's the question - what is the downside to you of losing this dream apartment? I've heard there are about 11,000 other ones on this island to choose from.

columbiacountry is, as usual, correct. At best, I would raise it 2-3% to indicate you are serious and put a short time limit on it. They don't bite, tell them to f off and go find another place.

you can always raise it later...just politely take it off the table.

santaoct when you say you've made an offer have you made one in writing? If not you have to make an offer in writing. Verbal means nothing. As far as how fast things will happen no one know's for sure. But things will move faster in the village than in the upper eastside. All I'm saying is just have your ducks in a row so you can move on the place you want. It's simple supply and demand. As people begin to buy and the inventory decreases prices will increase. The broker works for the seller and has a duty to get them the best price. Nothing evil in that it's what sellers expect from the people the pay to sell their homes. You should have a broker who's job it is to get you the best price. A lot of people don't like brokers but that's their problem and not yours. A real estate purchase is one of the most important decisions you will ever make. Do it wisely.

broker alarm....broker alarm...identify yourself...broker alarm...identify yourself....broker....broker

the broker works for the seller?

the broker works for the broker...lets be real clear.

do it wisely....

avoid this broker

this idiot is calling for price increases!

Agree w/ Columbia County. Not sure if the OP is a broke-whore (broker), seller, or what...i'm just saying that my bullshitometer is reading at elevated levels. I've heard the same buzzwords in other cities (like, Miami and So. Cal, just before they crashed 45%!) and these same words were always bandied about: "doom and gloom", "last place to fall", "wishful thinking", etc.

Meanwhile, Wall St. bonuses are at 2001 or 2002 levels, and real estate is headed in that direction too!

My guess is that the OP is a motivated seller trying to talk up the market. Hey Graziavi - if you eally want to sell quickly, how 'bout you simply align your asking price with current market realities??

ok, so here we go. being a first time buyer and new to the big apple I got myself a broker all my offers where on written and formally presented by my broker to the sellers broker. I know that the sellers broker might have been more cooperative with me if I had not brought my own broker (so no need to split commission) but like I said I felt I needed guidance. My broker has facilitated my search and has been of some moderate help. As of now the decision rest on me increasing my offer once more and seeing if they bite or just move and keep looking.

Few things I noticed this time the apt was dirty not as well presented as when I first saw it and lots of stuff all over, not a nice first impression I think.

this is called negotiating against yourself. check it out...don't do it.

I just don't believe this - it's a funny line of posts

Don't apologize for using a broker. I've bought and sold property in several states (not NYC yet) but it is with out a doubt the most difficult process I've ever seen. The cost involved and all the stuff with coops of my god! The fact that you are in a position and have the desire to purchase your own home in one of the most exciting neighborhoods in the most exciting city in the world speaks volumes about your success. I congradulate you and wish you the best. I've owned 3 homes in my life and have never regretted a single purchase. Continue to ask questions and make your broker work you. I'll be glad to answer your questions or share my experiences. Way to go!

thx columbiacounty, I think its time to move on look at other pastures. I guess if somebody else shows a better bid than mine he deserves the place. However I will make sure to formally remove my offer of the table. I am looking at another place in 220 riverside bld condo so no financial voyeurism, same size and actually lower price. Off course not the village and I will still call that place fringe area but well we shall see.

Octavio

> I've owned 3 homes in my life and have never regretted a single purchase.

Irrelevant. Nationwide home prices fell for the first time in history last year and fell a lot. You're trying to argue for a correlation and that last statement is the biggest reason there is none.

santa, you're describing two different situations here. In your microcosm, you may just have to raise your offer to get it done. If you do, does it mean the market bottoms here and rises immediately? No way. You'll lose money near-term if your raised offer is accepted. You may not care. That's up to you.

columbiacounty,

why do you post so much on SE? Do you live in NYC or in Columbia County?

ha point taken guys thanks a lot, hand off the trigger.

new2ny is a broker. I have no problems with brokers, but I hate when they impersonate a buyer or an innocent passer-by. Take a theater lesson and then post.

both

thanks for the interesting market intelligence graziavi. but it is amazing to me that you think a one year 20% decline in same-unit rental price is not already drastic. that is simply an enormous, perhaps even unprecedented, decline in new york city. sure, there will always be tons of people who want to live in the village, but clearly they didn't want to live in the village enough to pay the $1800 fee or the $2800 you could have gotten last year.

this is nothing short of a collapse in real estate values, given that even with rental prices significantly higher last year the cost of owning was already far out of proportion to the cost of renting. if rents are really down 20-40% as you claim, purchase prices will have to come down 50-75%. it's just a bloodbath.

If the west village is more popular than other areas, which I do not doubt, wasn't that already priced into peak prices, so I don't necessarily follow that it will decline substantially less than other areas: if it declines at the same rate then the w v premium will remain the same in relative terms, while if it declines at a lesser rate the premium will increase even more, which makes questionable sense (is there something about the crisis that will cause the w v premium to increase even more).

santaoct best of luck. High inventory, falling prices, lowest interest rates in decades and $8,000.00 tax credit for new buyers. Ownning your own home priceless!

jimstreeteasy -- the argument that brokers have made is that the premium areas are safer from the downturn than new(er) hoods like HK or LES or Harlem. So people will be afraid of buying in the gentrifying areas, pushing prices down faster (larger percentage) than places like West Village and UES. there is also the "crime" will return argument b/c of the crisis, impacting Hell's Kitchen or Harlem or LES more.

that's the agument, not saying I buy it.

Jmkennan: Yeah, I've seen that, and it is almost assumed "wisdom". I think if Chelsea generic falls 40% then WV ordinary will fall something like that...while wmburg or harlem or les could be hit worse. BUT there are some very hyped parts of the wv that might fall even more, if things really return to sanity ( a friend has made a fortune on paper in a nice loft on Perry St and I wonder if that amazing runup will just disapear now that sanity is coming). I don't know..I'd put it like this: if an area has increased in recent years more than the average, it may well fall more than the average.

in terms of rents, argument is that if rents fall, say, 20% in the west village, people who had wanted to live in the west village but couldn't afford it will move in from, say, the lower east side.

"and have never regretted a single purchase"

As crescent said, completely irrelevent! The psych wards of the world are FULL of people who never regret their decisions either.

Yes, that was what my observation was from the interest I had in my apartment. People were jumping ship from places like hell's kitchen and the financial district to try to take advantage of the lower rents and move to the village. I think the net effect of this will be much more drastic declines in the less desirable neighborhoods. I don't see why above posters are saying this is just a broker's tale. It follows the most important rule of real estate, location. If you look up how much prices declined in the last NYC real estate downturns, 1988-1991 the prices in Greenwich Village were by far the most resilient. It just seems like common sense.

Also to happyrenter above, as a single unit owner who has never rented before I do see your point about 20% decline being drastic. I suspect though if I was more aggressive, given the high level of interest I had, I definitely could have gotten more and/or had the renter pay the fee. Still, no way I was getting 2800-3000 like I could have last year.

By the way, I had an agent come by and look at the place when I had it for sale (tried to sell first but realized it was not going to happen). He told me he would gladly rent it for me. When I asked how much he would list the apt for he told me 1700-1800. No offense to any agents on this board, but you can understand why many of us don't have any trust. Of course he told me that price. This way he could move the apt in two days and collect a 15% fee. Unbelievable.

up to last year equity investors got paid/were trained to buy any dip
now they are down by 40%

graziavi location sells a place for sure. I think young people are moving into other areas to save money so they can buy, When I was renting an apartment that's what a young couple told me and I believe them. Or people just want to cur down on costs where they can. People are nervous for sure. I always made money in real estate and I'll make money in this one. I have faith in NYC. It does seem from some of the post that some brokers (not all) are very aggressive. Maybe because it's so hard to make it here and cost of living is high. Funny thing in Colorado the landlord allows paid the brokers fee.

"It follows the most important rule of real estate, location. If you look up how much prices declined in the last NYC real estate downturns, 1988-1991 the prices in Greenwich Village were by far the most resilient. It just seems like common sense."

Hmmmm. There is goes again. Person says he's just a "small time landlord" (heard that one on this board before? LOL), but my bullshitometer is reading "realt-whore".

Look,maybe you're not a broker, perhaps you're just a bumpkin: Cite me some data that shows that the village did not get creamed in the real estate correction of the early 90's. The hapless slogan "Location! Location! Location!" that brokers unthinkingly ape has some merit, but on a relative-value basis you are STILL going to take a huge hit, yes, even in your prescious village. I've said it before, I'll say it again: Investors, do NOT try to "catch a falling knife". Wait until real estate rebounds a little, then jump in. We ain't there yet.

"that's what a young couple told me and I believe them". My GF and I are a young couple, so believe this: You are an idiot.

"I always made money in real estate and I'll make money in this one."

- You may, if you hold onto it long enough. But that doesn't mean you'll get an acceptable return (hold onto it 20 yrs when it finally pops its head above what you paid for it if bought last year, and you might eek out a 2% avg rate of return. Good for you!

Let me offer a contrarian take. We have a place in prime WV that is more than 2x the size of Graziavi's and priced only slightly higher. In past years we have approached the LL a couple of months before and they raised the rent reasonably. This year LL sent us a renewal several months in advance at the same price. We could try to negotiate them down but very likely we will move to one of those less desirable neighborhoods mentioned above because we want more space and the disparities in price have increased so much that it makes living in those places more appealing. Will our LL get the same price with a new tenant? Maybe. But the market will eliminate those price differentials over time and you will come back to a similar neighborhood spread, which will have been averaged down overall. Bottom line is all neighborhoods are going down. Don't take my word for it. Look at the rental listings on street easy.

I wonder, some of the co-ops of the west village are the crappy post-war types.
Frankly, the west village has some great places, but it also has some really lousy ones, the post-war co-ops are tacky but there's much worse too, the tenements, the slumlord rent regulated places, etc. I wonder if the original poster could tell us just a bit more about this apartment he is renting out.
Thanks

malthus your point is well taken. It's always about what's most important. Location or space etc. But I would talk to your landlord if you really like your place and want to stay. You have nothing to lose. As a former landlord (not in NYC) keeping a good tenant was number one on my list. Of course he has a bottom line on what he can rent it for but he knows how tight the market is and if he's a resonable buiness person I'm sure he would be open to talking with you about your rent. Good luck.

santaoct, PLEASE stop being your own worst enemy. Don't raise your bid but tell the seller & the broker that they have until 4PM on Wednesday to accept or reject your offer then let the chips fall where they may. You can't afford to fall in love with this place until after you own it so "This or something better".

Well said. Put another way - it is a very good idea to fall in love with more than 1 place. It gives you leverage against the seller(s) and prevents you from falling into that abyss known as "I have to bid higher."

new2ny=notnew2bs