Blogging For Transparency: NYC Heats Up
A: Many of my colleagues just couldn't understand my passion for blogging and taking 2 steps back in my own business to put the time into what I consider making Manhattan real estate more transparent! That is why I do it; to bring to you street level information on what is going on right now in New York City real estate. Is it a buyers market, a sellers market, who has control, etc..Hopefully, I've gained a level of trust with my readers after 20 months of doing this and the thousands of hours I put into my content to try to educate you on investing in this marketplace. But if didn't, perhaps the NY Times Page one article from 2 days ago will help.
Thanks to Jonathan Miller for pointing this one out as I actually missed the article.
HOUSING MARKET HEATS UP AGAIN IN NEW YORK CITY
Although this article came out on February, 19th it was probably being worked on during January to get the facts right before publishing. Hence the lag!
Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges -- from tiny studios in the East Village to red-brick mansions on the Upper East Side -- in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.
For those of you who read UrbanDigs daily you would have known this street level observation since January 10th, and hopefully heeded my advice:
January 10th, 2007 - Market Report: Buyers Out in Full Force
AS A BUYER - Don't try to low-ball or wait out a housing downturn if you plan on signing a contract in the next 1-3 months! If you do, you will NOT get the response you hope for as the seller's broker most definitely is reporting the rise in activity to their client. If you choose to wait until March or so you may not find the inventory as attractive as it is today. If all this buyer activity results in what I expect it to, you will later on see sales volume come in very strong during the months of January & February, removing a lot of unsold inventory that has built up over the past few months.AS A SELLER - No one can tell you when to sell your home. That is your call. But, if you have been planning on selling your home in the next 3-6 months, it might be worthwhile to get it ACTIVE NOW and get in on some of this action! You may even be able to price slightly higher than you were original thinking to test out the market, as it is times like these (that is, a surge in buyer demand) where sellers get their price or more a good percentage of the time. Don't overprice tremendously unless you have a huge terrace, incredible views, or an unbelievable renovation (although the first two are the best reasons for pricing higher as I'm not convinced buyers will pay top dollar for a very high end renovation job).
February 12th, 2007 - Market Update: Very Active Buyer Pool
February 16th, 2007 - NYC Housing Defies Odds
Even Peter Comitini reported on this surge in activity in early January as well!
January 9th, 2007 - Open House Attendance Soars
But the most useful report was the first one from January, 10th! It's now 6 weeks later and if you didn't take that advice, especially if you were a buyer with a time pressure, you are kicking yourself with the strong competition and lack of inventory to choose from right now. Hopefully, you aren't in that situation though.
UrbanDigs Says: I hope I don't need to prove myself anymore to my readers! I'm an honest, ethical, and passionate blogger who just gets a high out of innovative ways to make real estate more transparent and to discuss tips to best profit from it! The internet is a great thing and for those seeking to profit on New York City real estate, the blogosphere offers you real time opinions and observations about the market that you are considering investing in. Times are changing and you should change with them! In the end, a more transparent real estate market will only help you make more educated and timely decisions! Blog on!!
Comments (3)
Urbandigs, what are your thoughts on the likelihood that this current surge in activity is just a "dead cat bounce", a phenomenon which seems to accompany most deflating bubbles?
Posted by John | February 22, 2007 8:03 PM
John - I do think it is a dead cat bounce and I dont expect this frenzy to last any longer than 3 more months, end of May the most.
I think the summer months will be slow as usual and that tighter lending standards and a lag affect spillover from the national housing market slowdown will eventually hit NYC.
Its just naive to think that the boom will last forever, especially the surge in activity that we are seeing right now. No way that lasts the entire year! Ive seen it over and over again. NYC is seasonal and JAN-MARCH are always the most active months in real estate.
Posted by Noah | February 23, 2007 8:05 AM
Dead cat bounces, in my mind at least (I doubt theres an official definition), are when an asset falls so far people think it cant possibly be appropriately valued. They buy it up, only to realize how much it actually does suck, and it falls once again.
More likely we are seeing the result of bonuses seeping into the NYC RE market, and a year from now we will see this as a short lived upswing in an otherwise downward trending market. Just as MoM prices can fall in an accellerating market, MoM prices can rise in an otherwise decellerating market.
Remember, NODs are up, forclosures are up, and credit standards are tightening at the same time subprime lenders are dying faster than plague victims. The first two indicate pressured sellers listing in 4-6 months, and the last two lead to a forced reduction of demand as people are unable to secure loans for the sums NYC RE goes for these days. NYC RE might be different, but its still a market. What does higher inventory + lower demand equal?
The main problem vis a vis the housing market is that prices have risen to points that the average home buyer can no longer safely afford. Prices have not fallen at all/enough to alleviate this problem, so we will continue to see price fluctuations above and below a declining moving average.
Posted by drtomaso | February 26, 2007 4:32 PM