Light Week

Being busy is a good thing! Just hope that you're not seeing yourself put in a lot more hours per closed deal compared to last year.
Not to be a pain in the hoo-ha market timer again, but I think this down turn will only recover in the begining of 2010 and next spring, when the really crappy Wall St. bonuses come out, will be the true test for Manhattan real estate. I just don't think its prudent to buy now, knowing that we're in a recession.
Even if real estate here doesn't fall that much or stays flat, better to lose being out than lose being in.

Well its still a very individual decision for some, and I think buyers are pricing this potential into their bids. My clients already know they will buy, and decided NOT to rent and wait another year before buying. No one has crystal ball, but your comment I think is consistent with many buyers out there, some just choose to price the risk into a bid.

Certainly I do not see aggressive bids.

Also, very important to note that ONE BROKERS OBSERVATION MAY NOT BE INDICATIVE OF AN ENTIRE MARKET! So take my comments with grain of salt. Ill always try to tell you what I see on front lines.

Thx for comment!

How much of a risk discount are people pricing in?

varies, but 5-7% is not uncommon...all depends on how the unit is priced, condition, light/views, comps and in building trades, etc...higher quality product, less risk discount.

But in general, I find buyers cautious with bids and that is one reason why. In other words, if market is to fall 5%, they already price that in to their bid. However, if a situation unfolds that they need to give up a few % points to get the deal, they usually will go for it.

Its as if the risk discount is the initial motivator behind the bidding, and how much they will bend depends on how quality the product is to meet their needs, compared with rest of market.

yeah, but I still don't see the ny re market in recession mode. I think it will take two consecutive bad years for sellers to get a push towards seriously lowering ask.

We are still below 8k inventory. Its going to take a bit to get it over 10k.

I still want to wait until after the Olympics and after the elections to get a serious gauge on what actual distress the economy is in.

Being in an hyperinflationary environment doesn't help anyone.

Jose R: Olympics? That's a new one for me. What on earth will the Olympics (which are talking place half-a-world away) have anything to do with NYC RE? I don't think I've ever heard of ANY Olympic games EVER having an impact of NY RE prices. I have to admit I chuckled when I read your post. Olympics? Give me a break.

It wasn't in reference NYC RE. It was a general reference to the economy, not specific to NY but to China and US.

It wasn't in reference NYC RE. It was a general reference to the economy, not specific to NY but to China and US.

Hi Noah:

I have been following the listings for a while, and I have to now admit that I am somewhat bearish on Manhattan real estate. I did not, and do not, believe that the rise in prices over the past few years were as a result of the same "bubble" like factors that drove up prices around the country. Rather, there were a set of fundamentals that were functioning at a high level. However, I now believe that those fundamentals have changed, and will result in lowered prices. They are:

1) Strong Local Economy- Obviously Wall Street has gotten hammered. I believe it will take years for the financial sector to recover, whether we go into a recession or not.

2) Low mortgages/easily available- Mortgage rates are higher, and they are tougher to get. While subprime was never an issue here, the fact is that low rates with low money down did help to drive up prices.

3) Multiple streams of demand- I believe that foreign buyers were a bit of hype to begin with, but that sector has surely fallen off, as have purchaser from around the country who have adopted a wait and see attitude.

4) Low Inventory- Inventory has been steadily increasing and I suspect it will remain above 8000 for the foreseeable future. If it gets to 9000 we will start to see seller competition, particularly if the seller has lost their job and can't afford to pay the carrying costs any more.

5) Strong leadership in the mayor's office- Bllomberg is out at the end of 09 and is a lame duck. Whoever replaces him will be vastly inferior to him and rudy, this could lead to an erosion in the quality of life.

I was bullish for a long time, but when factors change, you must be willing and able to asses the situation and adapt.
However, in the long terms, it is hard to go wrong with Manhattan real estate, and with rents as high as they are, if you are a user with a long time window, buying is always a good bet.

I don't know how quickly inventory moves in NY, but down here in FL we're showing four times the quantity of homes per closing. I think I'm averaging about 35 showings per client before an offer is accepted. Right now, qualifying my buyers well and determining who is an A buyer is the best use of my time. There is no shortage of buyers out there, just as there is no shortage of tire kickers that have just come out of foreclosure seminars or who are unaware they have been priced out of the market with new lending restrictions and credit requirements.

I think that over the next couple of years you WILL see what the bubble means to NYC. It takes longer to get things done here, and there seems to be quite a bit of condo product available now, and a significant amount becoming available in the next couple of years (still an incredible amount of building to beat the 421a abatement deadline). Add to that a major contraction in the banking community, and a potential disaster due to the Fed's and the gov's budget's overspending (good God, I hate to think of our debt repayment rates if and when the Fed sees fit to FINALLY do something about the dollar). Very few people seem to be talking about the costs of our borrowing. Nasty.