Interesting. The come to jesus meeting after a month is something I am hearing more and more lately, anecdotally. I would think 2019 pricing would get it done, unless its in a smaller size sector or sector with a lot of sell side competition. Then again, I know of a seller trying to get 2019/late 2018 pricing in a solid nhood with little to no inventory, and seeing some resistanceI think the market is currently split into 2 camps: those who are willing to sell now at whatever price the market will bring and those who are hearing tales of how hot the market is and think that means they can get the aspirational prices they failed at over the past 5 years. That's why I think I'm seeing lots of stuff come on the market either at substantially below prior asking prices, or quickly being reduced substantially, and then going to contract quickly. The other side is those that aren't doing either of those and then going off market (we are still seeing huge numbers go off market compared to historical).
I am guessing what is happening is that plenty of agents are still "taking a shot" putting units back on the market at aspirational prices figuring they will have their "come to Jesus" meeting with the sellers after a month on the market and then tell them if the don't want to reduce the price they may as well take it off the market because everything which is priced correctly is selling quickly. The difference between the 2 flavors being whether that conversation occurs before or after the unit gets relisted.
This is a contrast to what was happening in 2013-14 where agents were taking aspirationally priced listings and waiting for the market to grow into them.
My evidence of this is that I'm still seeing plenty of stuff which was on the market in the last 5 years and taken off coming back on at 2013 prices (and some at 2008 prices) and selling, as well as plenty of stuff coming back on at 2019 prices and not selling.
) ty so much! i lost the last few hairs i had on me head over last 4 months over this. emotional roller coaster, as recently as few weeks ago thought we may not pull it out. Cant wait to release and incorporate in our reports. More cool charts comning, and your rental ticker request too Im told, yay!Awesome, Noah!
Your information and the Forum discussions are very insightful and helpful. It helps us all qualify and quantify what we experience in the market and need to impart to our sellers and buyers. There continues to be a disconnect with buyers (through they seem to be catching on) that although we experienced a very unique and disruptive market event, it did not translate into the discount they expect.
Thanks so much Sharon, love hearing this!! I agree, buyers expectations for a steep covid discount far exceeded what the market actually provided. The data shows we fell like 8-12% or thereabouts for broader resale market. Ofc luxury and new dev had their hits, and commercial,rental etc, the best deals were had during the shutdown last year when fear was highest and vol lowestYour information and the Forum discussions are very insightful and helpful. It helps us all qualify and quantify what we experience in the market and need to impart to our sellers and buyers. There continues to be a disconnect with buyers (through they seem to be catching on) that although we experienced a very unique and disruptive market event, it did not translate into the discount they expect.
Love the observation David. I wonder, are there always these 2 sets of buyers, in all markets? its just that both sets are swelling and contracting at all times and we dont have the means to truly measure it?If you look at my posts #2 and #4 in this thread, there is also the buyer's side cohort. For the almost forty years I've been doing this there are always buyers who think the market is going down, but want to buy anyway. So they want to buy at tomorrow's lower prices. But no matter what prices are you only get to buy in today's market - your only choice is not to buy or pay today's prices.
So you've got 2 sets of buyers: the one's who were/are willing to trade at whatever it takes to transact today (i.e. over the last 11 months) and those who want/wanted further discounts. Just like sellers a significant number left the market either because they bought something or gave up because they realized the market wasn't going to hit their price, and some are still around either hoping to find the impossible or doing price discovery as to where they can get a deal done.
Agreed. I would add, I think the pandemic acted as an accelerant on so many levels for this market. Anyone looking for a reason to sell, has one. Or had one. Many chose to wait it out last year and pull the trigger this year, so many anectdotal stories cross my way I sometimes forget I need to focus on the #s more, not the stories, even tho the stories is what the #s are missing )David, I like your observation in post #4 that some sellers needed something to blame for taking a loss. I also get a sense that the pandemic marked an end to many a NYC RE investors’ adventures. After 5 years of price drops driven by nothing other than overpricing & massive development supply looking to profit on it, the pandemic was the nail in the coffin for them to give up hope and get out.
right right...rates, man, im so divided. I kind of think 10yr rises to 2%+ before year end, but then policy errors by fed (tightening) will trigger a reset in equities and cause a bit of an issue. Timing always tricky on these things (remember Alan G irrational exuberance speech a few years before the bust). Then I think rates get close to zero again for a while only to march up for the remainder of the decade. Some argue we could see our first real bouts of sustainably rising inflation since 40+years. Been in disinflationary environment since.It does feel like the start of a mini bull run, spurred by:
Also feels like a temporary overreaction of supply/demand because:
- The return to the city
- The desire for more space
- Low interest rates
So it kinda feels like a redux of the 2010-2020 sideways decade. Up a little, flat a little, down a little. Maybe it keeps up with inflation this round. Maybe not.
- The return surge will abate, and the permanent exodus of otherwise Manhattanites is real.
- Developers will develop. Current prices are profitable enough. They will get excited by the activity & mini run as signs of life. Besides, what else can they do: close shop? Some will continue chasing there shiny dollars of ultra-luxury, but I’d expect more targeting of mass-affluent price points.
- Fed will take the punch bowl of QE & 0% away as inflation heats up. The 2% Fed special interest rates spurred a lot of demand, as intended, with buyers paying little heed about what would happen if/when this goes away and becomes *gasp* 3% or 4%. Buyers seem to think rates will never move off 0%, mortgages will forever remain 2%, and no one ever actually needs to pay principal for the actual goods.
cool thx, will check it outIf you haven’t otherwise read it, you might find this thread interesting:
The denizens of SE opine about how mortgage rates play into their decisions about purchase, whether they pay down the debt vs lever up to deploy money elsewhere, etc.