Supply starting to turn up

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I would say yes! The next 1-3 months will show a wave of listigs to hit the market. This will create a natural downward force on the pulse as first the stuff comes, and then the stuff goes to contract at a lag. Buyers would be keep to wait a bit for mid-feb and on as right now leverage is firmly on sell side - Remember, this is liquidity we are looking and talking about here, NOT price action

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David Goldsmith

All Powerful Moderator
Staff member
We still have tremendous amounts of units which have gone Off Market over the last 5 years which will come back at some point. The problem is that many still can't get the price they wanted when they were last on the market. Perhaps there will be enough demand and not enough supply that some aspirationally priced units will start getting their numbers with huge bonuses about to get handed out.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
We still have tremendous amounts of units which have gone Off Market over the last 5 years which will come back at some point. The problem is that many still can't get the price they wanted when they were last on the market. Perhaps there will be enough demand and not enough supply that some aspirationally priced units will start getting their numbers with huge bonuses about to get handed out.
I agree withe second part but Im wondering if these will come back in a meaningful way? Ifeel like its just naturally inflating with time as the universe of listed units grows over time. Interesting dynamic. I wonder if we can measure it any way
 

nicolebeauchamp

Well-known member
I think one of the biggest threats to those aspirationally priced resale units is new construction inventory. I think the coops with the aspirational pricing have the most to lose in this scenario for a variety of reasons , pricing, disclosure, length of process etc etc
 

David Goldsmith

All Powerful Moderator
Staff member
I think one of the biggest threats to those aspirationally priced resale units is new construction inventory. I think the coops with the aspirational pricing have the most to lose in this scenario for a variety of reasons , pricing, disclosure, length of process etc etc
I agree. Even with the booming sale of New Dev last year there's still tons of inventory (although I'm guessing pricing is going to be less attractive). I think in a lot of areas certain prejudices regarding location don't apply like they used to (for example look at all the people who would have been "West of 3rd only" on the UES buying in the new Naftali buildings) and those are also the ones who's alternatives would probably be Coops with "friction" (down payment, post closing liquidity, "process issues", etc).

But I also think a big threat to aspirationally priced units is non-aspirationally priced units. I keep saying that 2021 is not only notable for liquidity on the the buyer's end, but also I think many sellers also coming to grips and meeting the market where it is. We haven't seen what happens if/when a very liquid buyer pool meets a tight inventory/aspirationally priced inventory (yet, anyway) this go round.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I think one of the biggest threats to those aspirationally priced resale units is new construction inventory. I think the coops with the aspirational pricing have the most to lose in this scenario for a variety of reasons , pricing, disclosure, length of process etc etc
Very good point Nikki! Agree for now, not so sure when looking farther down the timeline, say 2024-2025, wondering if that inventory gets cleared by then and we have a shortage due to the cycle it takes to go from permit to approval to build to sale..etc
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I agree. Even with the booming sale of New Dev last year there's still tons of inventory (although I'm guessing pricing is going to be less attractive). I think in a lot of areas certain prejudices regarding location don't apply like they used to (for example look at all the people who would have been "West of 3rd only" on the UES buying in the new Naftali buildings) and those are also the ones who's alternatives would probably be Coops with "friction" (down payment, post closing liquidity, "process issues", etc).

But I also think a big threat to aspirationally priced units is non-aspirationally priced units. I keep saying that 2021 is not only notable for liquidity on the the buyer's end, but also I think many sellers also coming to grips and meeting the market where it is. We haven't seen what happens if/when a very liquid buyer pool meets a tight inventory/aspirationally priced inventory (yet, anyway) this go round.
"But I also think a big threat to aspirationally priced units is non-aspirationally priced units. " -- yes! And one cure for high unrealistic prices, is that high price itself. The market will just ignore and the seller likely will come to terms with it over time. Not all sellers, especially not those that want a # that makes their trade make sense
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
But if supply shortage is going to lead to a spike in prices wouldn't you want to wait until after the spike?
doesnt really work like wiht prices validated at a 3-4+ mth lag. Sellers should utilize the low inventory high demand environment now before the 1000s ofnew listings hit the market by April
 

David Goldsmith

All Powerful Moderator
Staff member
While closing prices get validated on a 3 or 4 month lag brokers become aware, and inform sellers, on a much more expedited basis. If something comes on the market tomorrow and goes to contract in a week, the next sale in the building gets priced on that, not the last closing.

NB that is predicted on the "if" prices are rapidly rising. So far what I think we have mostly seen is product moving because of seller capitulation. In fact when we are now seeing statements from brokers about "short supply," there really isn't a short supply based on historical norms. But what we do have is a bifurcated supply of sellers who have priced below what they were previously at and sellers who are still aspirational. The first group are selling extremely quickly in this hyperliquid market and the second group by and large aren't. So we do have a shortage of low hanging fruit. Example: https://streeteasy.com/building/the-twenty-1/4th-floor
From what I understand the strategy used worked well any the unit is supposed to be in contract over $4M. But that was predicated on the "WAS $6.4M, NOW ASKING $3.75M. FULL SERVICE CONDO, 4 BEDROOMS WITH DEEDED PARKING!

BEST AND FINAL BIDS DUE MONDAY, 1/17 BY 5PM."
aspect, not at higher prices.
 

David Goldsmith

All Powerful Moderator
Staff member
And BTW I personally would be more worried about rising rates than trying to squeeze to last dollar out of this market. I still think prices are more likely to crash than boom. If we've seen the outrageous amount of liquidity in the last year and prices spiking just about everywhere else but here...

So my inclination personally would be to list now and get out of Dodge.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Sellers are you listening? The listing wave is upon us and is likely to increase until April. Sellers should expect fresh listings to compete with over the next 2-3 months.

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