At the risk of sounding like a real estate salesman, let me say that I am confounded by the sensationalism of headlines trumpeting “sharp price drops” for Manhattan apartments, as the New York Times blared today. The drops were reported by various brokerages for the second quarter.
Indeed, prices fell over the last year in a range from 13% to 23%, according to the firms and Streeteasy. Mind you, the market was still booming a year ago, long before the Lehman debacle in December and the Big Apple’s deflated.
If prices dropped in a year by only, say, 20%, that should be cause for celebration. In much of the rest of the country, prices fell months ago by at least twice that percentage. To me, 20% is a great relief, though the percentage is greater going back to 2007.
Also falling were sales, which appraisal firm Miller-Samuel pegged at 1,532 – half of the total in the second quarter of 2008. At the same time, Streeteasy documented what clearly is a seasonal boost in sales, a phenomenon that I and other brokers have detected. (The Observer summarizes the findings crisply.)
Yet many sellers are clinging to unrealistic prices while many buyers are insisting on lowball offers.
Call me a salesman (though readers of my biweekly newsletter and of this blog know full well that I am determinedly straightforward and cynical in my views), but I’m relieved at the numbers reported this week. To me the sky is not falling at all. In fact, I believe there is reason to think that the dark clouds will dissipate starting after Labor Day.
Am I wrong?
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022