Buyers ‘Waiting For Prices To Go Down’ In New York
The Times Union has this update from New York. “For-sale signs are sprouting in front of more homes, and staying longer, as the Capital Region’s fiery-hot real estate market cools. Sales dropped 4 percent in June, and the association predicts 2006 sales will eventually fall 7 percent below 2005’s record mark.”
“‘I see fewer buyers now than I have in months past,’ said Karen Thomas, in Saratoga Springs. Buyers who are out shopping have more breathing room, there are fewer bidding wars and some prices have come down, real estate agents said.”
“More sellers are jumping in, too, trying to get a piece of the market before it loses more sizzle. The number of new listings jumped 20 percent in June, and was up 15 percent for the first half of the year. The conditions make for the closest thing to a buyer’s market in years.”
“Greater Capital Region Association of Realtors, which tracks sales over an 11-county region, was careful not to spook anyone. In a statement, the association’s president, John McNamara, said both buyers and sellers would be busy. And he said houses in every price range are on the market.’
The Poughkeepsie Journal. “New-home construction is showing some softness lately compared with the last few banner years in the mid-Hudson Valley. One-family homes contracted for in the first half of this year in Dutchess County, (were) down 20 percent from last year’s pace. June had 42 deals, down 41.6 percent from last June’s 72.”
“‘Our traffic is not great but the people who are out there are more serious,’ (realtor) said Tom LaPerch. ‘You’ve got to position yourself correctly in terms of spec homes,’ LaPerch said. ‘Do we have the same pace we had three years ago? Absolutely not,’ LaPerch said.”
“LaPerch said some builders may have paid too much for vacant land they bought during the boom. ‘That’s where the difficulty lies. If you overpaid for land, you’re having a tough time selling right now,’ he said.”
The New York Daily News. “Those fat Wall Street bonuses haven’t found their way to the Hamptons. The number of homes sold in the recreation zone of the rich and famous fell to 958 during the first half of the year, down 21%, according to a report.”
“All the talk of the bubble bursting, coupled with rising interest rates, had Wall Streeters sitting on the sidelines waiting for prices to go down. But sellers are continuing to hold firm on price. Instead of buying homes, the big-money guys decided to take some of their bonus bonanza and plow it into rentals.”
“‘We’ve seen the best rental market in five years,’ said Rick Hoffman, regional vice president of Corcoran’s East End offices.”
“Broker Lawrence Porter said investment bankers are putting their money elsewhere. ‘This is a correction,’ Porter said.”
“He noted ‘a record number of houses on the market in the outer hamlets and north of the highway’ areas farther away from the multimillion-dollar oceanfront properties. ‘We used to have 15 houses on the market,’ Porter said. ‘Now we have 65 to 70.’”
“Hoffman is seeing a glut of homes priced between $1 million to $3 million, with inventory up 60%.”
This also in from appraisal firm Miller Samuel:
‘Manhattan Market Overview 2Q 06 prepared by Miller Samuel. The phenomenon of rising prices and declining sales is a classic sign of a market in transition. The market has entered a period where the sellers no longer have a clear advantage in the typical sales transaction. Buyers were expecting a deep discount on all transactions while sellers remained fairly firm in their pricing. As a result, the number of sales dropped as the buyers who were resistant to rising prices simply chose not to participate.’
‘While inventory levels are the highest they have been in ten years, the selection for buyers has not improved as much as the inventory numbers would suggest as sellers have not yet responded to the weaker demand. There is still a substantial portion of listings that are priced as if the market was seeing double-digit annual appreciation that occurred over the past several years. As a result, it is taking longer to sell an apartment and there is generally more negotiability.’
In seaford, long island not only are houses staying on the market for much longer but houses that had”in contract signs on them in the beginning of the summer, are available again.The only thing is the prices haven’t budged.
can’t wait for the big drop…
Some prospective Greater Fools escaped financial disaster just in time.
I’ve seen this several times as well. Didn’t see it much last year, but have seen it 4-5 times i nthe past 3 months.
I want to see the “real” numbers from NAR. The numbers are so bogus right now you might as well wipe your @ss with the data. If you take out all the incentives, money paid toward cc’s you will find substantial declines. Unfortunately they are able to brainwash the lay consumer with the bogus data.
Local realtors also publish bogus data. A house is on the market for 200 days, drops the price 5 times, relists again as a 6th price reduction, and sells in a few days. Realrors say: “Sold in a few days for 99% of asking price!”
NOT.
My aunt just barely survived the hurricane of ‘38. Since the very presence of houses on the beaches defies logic I would hesitate to make any predictions about the higher end of that market.
“I want to see the “real” numbers from NAR.”
Nice comment Arizonadude. What ticks me off is the market time. I submit to you that it is probably triple what they are reporting, 65 days or something like that. Just looked at a house and the market time shows 30 days because the six month listing just rolled over a month ago due to overpricing. Realtors are relisting the same properties more frequent then that to make them appear fresh, it’s all a game, condoned by the oversight. Did I say oversight?
MBA’s #’s are just out ,and new mortgages are at 4 year lows…..
The NAR is like the weather man…..they lie everyday and people simply come back the next day believing whatever is lied about again. ‘It is always sunny’.
You do a great disservice to weather men - the weather is a complex beast - a 10 year old with basic math skills could see where this RE market is going……
Gosh, I’d sure hate to see any of these “investors” lose any money on these rock-solid purchases in NY. Looks like those flim-flammers on Wall St. are now buying rentals instead of real estate. For a second I was worried.
The Wall Street types know more about money and markets than the average person. While even a sharp Wall Streeter could do stupid things with real estate, they are obviously keeping their distance from today’s RE market. They know the market has turned and they are not jumping back in anytime soon.
The garden variety 30 year old DINKS making $2 million a year were buying homes well upwards of $3.0 million a year ago. They’re out of the market now, and look for them to come back in when prices fall 20%, which has been predicted in this price range.
The real pain will be in the under $2 million range. This includes many homes in the outlying cimmunities such as Shinnecock Hills and Noyac. These communities were the homes of lower rung blue collar workers five years ago and many such types still live there. While many sold their homes in the past five years for high prices, many have steadfastly held out for yet higher prices. So what you have now in these communities are homes bought by Manhattanites for say $900,000 in the past few years right next to homes owned and occupied by janitors and night watchmen since 1975 when they paid $25,000. In fact these homes sold for less than $200,000 five years ago.
Now that the market has turned, the lower rung blue collars who were holding out for even higher prices will flood the market in hopes of becoming equity nomads headed for less expensive parts. Also, because valuations have skyrocketed, they HAVE to move as they can no longer afford the taxes.
At the same time, many mid-level Manhattan DINKS who bought second homes in the Hamptons for iboth nvestment purposes and weekend recreating will begin to panic as their ARM’s reset and they see gravity summoning prices downwards.
When night watchman Norm and middle managment DINK’s Ross and Rochelle put their homes on the market, we will be seeing a perfect storm - a confluence of greed gone bad that will leave these parts of the Hamptons reeling for the next 10-15 years.
The Hamptons are one of America’s epicenters of excess, soon to be abscess. The rise in values was spectacular, and so will be the fall.
Meanwhile, the REAL smart money has been quietly exiting the Hamptons for the past year and a half or more. These are the folks who laugh when they hear that farflung hamlets such as Shinnecock Hills are even tring to pass themselves off as the true Hamptons. The smart money has sold right at the peak and is off to greener pastures.
This may be the story in many vacation meccas of the bourgeois bohemians. But few places will witness the size of the plummet in store for the Hamptons.
This is an interesting market to watch, considering so much of Wall Street lives there. If Wall Streeters are buying rentals, this might be an indicator of things to come.
Wallstreeters are renting in the Hamptons for the summer. They are not “buying rentals”
why don’t I ever see inventory numbers north of the NYC area?
“why don’t I ever see inventory numbers north of the NYC area?”
In other words for the entire rest of the state? Thank you for posting Albany and Poughkeepsie numbers but geographically they’re still the southern region of the state.
I’ve found looking for numbers for the hinterlands are like looking into a black hole. Perhaps it has have something to do with the fact that we don’t even have cell or cable service in much of Upstate.
I was wearing a smirk when a 10 year old friend of my son told me not to bother googling aerials of our town. They were too out of focus to see anything, he exclaimed……if he only knew, I thought.
…Local NAR - “was careful not to spook anyone. In a statement, the association’s president, John McNamara, said both buyers and sellers would be busy. And he said houses in every price range are on the market.”
He also said, the sun would come up in the morning and would set at night.
Will he bet his bottom dollar on his predictions?
“All the talk of the bubble bursting, coupled with rising interest rates, had Wall Streeters sitting on the sidelines waiting for prices to go down.”
Bernanke’s conundrum: Now that savvy Wall Streeters have adopted deflation psychology, it might be time for helicopter drops to stave off deflation risk. But core inflation is running at its highest level in nine years, increasing the pressure for tighter Fed policy in order to maintain a credible commitment to price stability. Decisions, decisions…
“‘I see fewer buyers now than I have in months past,’ said Karen Thomas, in Saratoga Springs. Buyers who are out shopping have more breathing room, there are fewer bidding wars and some prices have come down, real estate agents said.”
These comments are so late 2005. C’mon people clap,clap get with the program!
Hrm, anyone have any good sources to aid me in a battle? Someone here at my place of employment is voicing a stern disagreement with my belief that the 900K condos on the Jersey City waterfront will have their price lowered for initial sales (from the developer to the populace). There is a massive, massive amount of inventory coming online, on or near the waterfront. I haven’t heard of them selling, heck they’ve turned to advertising on the PATH in order to sell these things. The only selling point they have is a view of NYC and you’re only 30 minutes via PATH to NYC. Yes, nice things, but 900K for a tiny little condo with HOA of 600 a month when you can rent something next door for 1K without a water view, 2K for something much nicer with a view? These things aren’t selling at all to the best of my investigation.
it’s already happening on the manhattan side of the river. just check the nytimes r.e. listings for $800K new/pre-construction. inventory’s exploding. the developers can take the hit without missing a meal. and then it’s ‘look out below.’
the PANCAKE effect! developers can afford to — and do — make the deep and fast discounts, leading the market down. a definite housing bubble phenomenon.
Jersey City has a great view of the City. Too bad it’s a boring, nasty sh*thole that has but one good mile of decent homes. Go two miles from the waterfront in Jersey City and you better have a kevlar vest and an uzi. The bagholders are in for some real pain. They thought they were Hobokken. They are not.
I’m in Hoboken but the Paulus Hook apts you are speaking of are plummeting-just go to Craigslist and look.
and as a note
Hoboken is a tiny little hamlet of mostly up and comers where Jersey City is a thin strip of money surrounded by a serious ghetto.
I was in the Albany last year when prices were shooting up. Friends who had bought rentals at the top of the last bubble there were desperate to unload their properties after holding a depreciating asset for years.
If Saratoga Springs, (far and away the most economically viable and least “deserted” town in the area) is hurting, that whole area’s going to drop like a rock.
Re. NYC: A good friend of mine is a realtor for tony Manhattan properties. She said the market is “absolutely flat flat flat to (here’s her concession) softening”.
She still thinks only the recently gentrified areas will crash outright.
Her husband, a bank analyst, thinks the whole island will crash outright, as do all their friends.
My realtor friend and her banker husband bought their great Upper East Side apt. at the bottom of the last Manhattan crash. Guess my friend thinks it’ll be “different this time”!!!
We saw 700k lofts they were building in Williamsburg, Brooklyn. They were located right next to a housing project. I thought, “oh my god. I can’t have my wife walking around here after dark.” I guess the FBs don’t mind if their wives are safe or not.
The Hamptons are dead.
WannabeeWorld is in for a real bloodbath.
The number of boats for sale is way up. Toys are some of the first things to go. And most of the homes out there are toys too.
what’s the difference between a hummer and a mcmansion?
affordable heating and air conditioning!