State Of The Market

This market is one of the most fascinating I've seen since I started in 2001:

* A very small percentage of apartments are closing significantly below peak values - more like 2004 prices.

* An even smaller % are closing above peak values - levels higher than 2006/2007.

* There's a healthy chunk of closing prices also off peak but more like 2005-2006 - about 15% of the number closed.

The volume of closings is definitely way up during the summer because it's compared to virually none in the previous 5 months. In some categories there's a backing up of inventory reducing it's price now. These owners have watched their neighbors close at what may be the new norms and understand conditions right now are better but are not guaranteed to stay that way.

Advertising Review

In this segment of "Inside New York Real Estate" we show some of the more interesting aspects of ads. What does and does not work and why?



I really like the presentation of this new one bedroom Condop in the Village, particularly the picture of the living room. I don't know if they added that rug just to sell the apartment or not but it works extremely well. The room has some interest because of the shadows and bookcase but the addition of this rug adds texture and depth in ways not usually seen - a master stroke. Their ask price is $825K (and maint $1,234) - now the lowest asking one bedroom in the building probably because of the lower floor. They reference "West Exposure" and "Full skyline view..." but my only questions are 1) why not show a picture of the view if it's so great? and 2) why not show photos of the lobby and more critically of one of the best roof decks in the city?

"...By preparing studies and reports the realtor educates...himself."

Market Reports

A Real Estate agent's grasp of market values is intuitively based both on current asking prices and what's been observed in the past. In today's inconsistent climate it is more important than ever to study different sectors and try to understand not only where prices have been but where they're likely to go in the near future. Currently available reports are:

40s East One Bedrooms
30s East One Bedrooms
Greenwich Village Studios
Greenwich Village One Bedrooms

Why would the seller of a 2 bedroom apartment on the Upper East Side be remotely interested in prices of Greenwich Village Studios? The goal is to try to provide some idea of market conditions in Manhattan. This is more concrete than the usual quotes such as "The average price of an apartment is $1,000,000" as many in the industry have relied on in recent years.

Along the way we'll also point out some of the more interesting specifics. The Manhattan market today includes apartments that are closing for below peak prices, significantly far below peak and in a smaller percentage even far, far above peak prices.

Please feel free to email us at mark.neuwirth@gmail.com with any questions you might have.

Greenwich Village $300K-$600K

Click here for our updated market study of Greenwich Village walk up apartments currently available asking from $300K-$600K. This report provides a higher level overview of the bigger picture as of August 6th, 2009. Please let us know if you have any questions.

We respect your right to privacy. To be removed from this list please email mark.neuwirth@gmail.com.

Lowballing Turns Predatory - The Real Deal Magazine

The Real Deal is one of our more widely read trade magazines. The recent article "Lowballing Turns Predatory" paints a picture of buyers being in control at all times. This piece talks about offers being made 40% below the ask price and buyers making offers on multiple properties. How accurate is this picture?

Generalizing can obscure the facts. As a downtown specialist under $1M I can safely say the reality is much closer to the following:

1) Inventory has remained somewhat stable, particularly in the sub $500K range. We have not seen the normal influx of new apartments on the market at the beginning of the year. This doesn't mean the existing inventory is moving, just that the number of new properties coming on the market is less than the average for this time of year.

2) Interest rates have moved much lower in the past few weeks - as of this writing below 5%. Several buyers I've been working with have noticed how much more they can afford now per month, and of course this makes a big difference.

3) Sellers have begun to realize they really can't ask any price they want and hope to get traffic, let alone bids. There have been some significant price reductions and some apartments must be considered fairly priced.

4) There are some buyers out there. These are generally people who have not been directly effected by Wall Street's meltdown, both because they didn't work in a bank and also because they haven't lost significant money in the stock market.

5) As the weather improves more people decide to look for apartments. During the colder months of the year less buyers are inclined to shlep out in the snow to look.

The other important point the article makes is about how 'trigger-shy' buyer are even after an offer has been accepted. Reports of people walking away from deposits or simply not signing contracts are common. This piece also doesn't mention the ever growing challenges even qualified buyers can face in getting a mortgage or gaining board approval.

It would seem the stage has been set for some activity in the next several months. What is completely clear is that the seller's margin for error has never narrower. There simply isn't room for bad marketing, incorrect pricing or other various mistakes far to numerous to mention.

What's The Message?

What is the person who took this picture trying to say about this apartment? Does it make you feel anything? Is there anything we can learn about what this place is like?

Advertising in Real Estate is always about sending a message - regardless of the sender's intentions. In this case we can see light but little else. How many times have you seen ads for apartments with very dark rooms? How about blurry pictures?

What about this one? Which picture is more likely to make you pick up the phone and call someone to take a look?

Every ad is an important opportunity to make a first impression on a buyer.

Here are some of their possible thoughts:

1) "I don't get it. Next!".

2) "I'm looking for a good amount of space and this looks very small. Next!".

3) "Wow, this looks great! Let me check out the other info."

Scenarios 1 and 2 are obviously bad for sellers but there may actually be a good side to having bad marketing. Savy buyers and agents can see this weakness and may be more motivated to view and bid on the apartment.

20s East One Bedroom Report

While the average price of an apartment is reported to be over $1,000,000 this probably has little to do with homeowners under $1,000,000. Somewhat more applicable is this report 'East 20s One Bdrm Current Market Study'. This spreadsheet depicts current and closed sales of typical Coop one bedrooms in postwar buildings with a doorman and elevator. These prices are somewhat stable and comparably easier to measure than some products with more variance. It can give pointers to the overall monthly performance of the market in this price range.