How on earth do i hear that the market is down and it doesn't reflect on asking price?

Asked by Alex-brooklyn, Brooklyn, NY Wed Feb 4, 2009

Honestly, among the 25/30 properties in Crown Heights i've been searching infos about via Accris/Trulia/property shark.... almost , and i'm saying it again, almost all of them that were purchased between 2005/2007 are now marked up at a coefficient of 1.7 or more !!!!
Example: A dwelling on Eastern prkway purchased for $350K in 09/06 is now offered for $680K, and a Multi family on Dean purchased for $470K in 2006 now offered for $830K...
What are they smoking?

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19
Bill Eckler, Agent, Venice, FL
Mon Feb 9, 2009
BEST ANSWER
Alex,

This is strictly speculation.........
If these homes are over prices and it appears they are, an experienced agent would not accept the the listing because of the cost involved and the extremely low percentage chance of successfully selling the home.

It then would be fair to assume we are dealing with inexperienced or out of touch agents.
1 vote
Phil, Home Buyer, Philwold
Mon Feb 9, 2009
No offense to Bill, but I don't believe that he gave the best answer. Out of state and in a transparent market like Florida he may be right; unfortunately, there is no transparent market here in Brooklyn, NY. There is no Multiple Listing Service and there is very little co-operation between listing agents. I believe that this is the number one reason that NYC is not responding to the reality of the economy. Can you imagine what it would be like if you tried to buy stock if the stock exchange didn't exist? Just look at the market 20 minutes outside of Manhattan in Westchester county where there is a sophisticated MLS and a powerful real estate regulatory body . The real estate reality out there is terrifying.

NYC has had an exaggerated and prolonged high and I believe that it will have an exaggerated and prolonged low. Only a very very informed buyer who has done months of searching in a specific area should even consider making any kind of offer and that offer should be at least 30% below the market average for the type of property being considered.

Why are you even considering buying in this market when the president of the united states claims that this is the worst economy since the Great Depression?

By the way... any broker or agent who claims to know what the market will be like in 2015 should be immediately challenged. Predicting future performance is borderline unethical and any representation claiming future performance should cause you to immediately ignore their advice.
3 votes
BE1006, Agent, Brooklyn, NY
Tue Feb 10, 2009
The current market determines the price of a property. The right price is what someone is willing to pay for it today. What the price was 2 years ago does not matter. If potential buyers in 2004 look back and compared 2007 prices, they certainly would have prefered 2004 prices, but it was too late because prices are based on todays offers.

As most experienced agents know, there are many variables that determine the right price. Seller's motivation for selling, location-- near transportation, good schools, etc.,, property condition and the neighborhood. In this 2009 real estate market, properties that are over-priced do not sell and banks are now more strigent in giving mortgages for properties that do not appraise. I am an independent broker who sells in the Bed-stuy, Clinton Hill and Fort Greene areas; prices are down and properties are on the market longer becuase there are more choices available. But, for someone who is looking for a deal--defined as lower prices than in 2006-2008, now is a great time to get more for your money.
1 vote
Phil, Home Buyer, Philwold
Mon Feb 9, 2009
When you meet an agent for a property for the first time you have to let them know that you know the facts.

Fact: there will be 2000 brand new condos coming on the market in prime Williamsburg off of the Brdford L in this year.

Fact: Toll Brothers on the river on North 10th in Williamsburg just dropped their prices by about $100,000.

Fact: $1,000,000 buys a lot and a new 2 family prefab on North 1st and Bedford.

Fact: $650,000 buys a run down 2 family on North 1st and Bedford

Fact: $400,000 buys a very nice 2 bedroom duplex on Metropolitian off Driggs

In my opinion, if you buy anything there should be a minimum total of 2 floors and 2 bathrooms and 2 entrances - $425,000 will get you exactly this on Metropolitan off of Driggs in a brand new co-op... with a garage space! If you lose your job you need to be able to cram a 20 year old into every spare 10x12 foot space and charge them between $500 to $1000 a month. As long as there are collage and grad students getting degrees in Manhattan there will be a market for a chopped up space that can be rented to kids on Craigslist.
1 vote
Dana Schuster, Agent, Slidell, LA
Wed Feb 4, 2009
A lot of sellers aree still in a state of denial. As realtors,we can do our best to bring them down to earth,but in the end,the seller is the only one who can determine the final asking price. In my area (suburb of New Orleans) i have seen a FSBO (this is a cookie cutter,basically pre-fab) listed for 500K. In this area,that amount will get you a beautiful custom home in one of the best neighborhoods(gated,waterfront,deep water if you want ) but this seller has overinflated ideas of the value of his home. And denial is a river in Egypt.
1 vote
Everett Perry, Agent, Fresh Meadows, NY
Thu Feb 19, 2009
Phil,

If a property is affordable to an individual then that person should buy now. Its better than renting in every way. Unless your plan to flip a property, you should buy when you are ready and can afford it.
0 votes
Rhonda Holt, Agent, New York, NY
Wed Feb 18, 2009
Hello, the prices have dipped in Brooklyn not dived, especially in the more high valued areas. New York has not suffered like other states. When you look at the news most of the time they never specify which states have the largest depreciation, usually the news is making a national report.

Study the market where you live by visiting sites like these and speaking to experienced full time realtors.

I hope I answered your question.

Rhonda Holt
Licensed Agent - Specializing in Co-op & Home Sales
Awarded 1st Place in Sales for 2008 and 2009
Weichert Realtors, H.P Greenfield
Web Reference:  http://www.KandHhomes.com
0 votes
Heather, Home Buyer, 11217
Wed Feb 11, 2009
Heather here.
I really found Phil's answer, and all of Alex's comments to be very helpful if depressing. I am looking in Brooklyn cus the only one of us who has a job at the mo works for Transit out of Coney Island yards., the other is a Great Depression Veteran (come to think of it, she is also a military Vet- WWII) who needs to have a pleasant safe walk to the train and no elevated platforms with billions of stairs. SO it has got to be Brooklyn for us.
I have found almost no co-operation anong the brokers I have spoken with. A friend of mine from FLA who is a realtor there made some calls for me about a house she thought was a good deal for me. The agent snapped " IT'S AN EXCLUSIVE!" Like a loyal friend she told the woman I would like to see it. She was hung up on.
I see a LOT of this squabbling over pieces of the shrinking pie, but sitll home prices are high in this town.

New York RE industry thinks that the only industry of the three "FIRE INDUSTRIES" (Finance, Insurance, Real Estate) left standing is the RE industry. What I see is that it is really just as wobbly as the stock market about now.

Sure, my property will increase in value over time IF I ever get one, but the banks are not lending even to qualified buyers like me. Thank goodness for Credit Unions!

So I will follow Phil's advice about bidding 30% under, because due to a death in the family, I am now sitting on enough money - more than I am likely to have at one time until I sell the house- to buy a house outright in most of the country, but it is _not_ enough to get me into the neighborhood I want because prices are _still _too _high.
What ARE they smoking? I think I could use some!

Now, to add insult to injury, interest rates have inched up.
0 votes
Rick Meyer, Agent, Colts Neck, NJ
Wed Feb 11, 2009
Hi Alex,
As a REALTOR professional, todays Market is very complicated. There is an old saying, "don't believe everything you read, or hear". Although the Market is down, there are pockets activity that are up.
The old saying, "Location, Location, Location", is true, and always will be...........
I am involved in transactions that are getting Multiple Offers!
Just remember, the Asking Price is just that, and in todays Market, any offer is a good offer.
My advice is to sit down with a REALTOR that specializes in the area you are interested in and find out the truth about that Market.
It does not cost you anything, except your time.
Best regards,
Rick
0 votes
Ben, , New York
Wed Feb 11, 2009
http://www.dqnews.com/Charts/Quarterly-Charts/NYC-Charts/ZIP…

The data is a bit behind, 3Q 2008. But note some areas of Brooklyn like Downtown, sales volume is down 70% from previous year. And this is the pre-Lehman collapse market. The post-Lehman market should be even worst.
0 votes
Alex-brooklyn, Home Buyer, Brooklyn, NY
Wed Feb 11, 2009
You NY Real estate people have to start using common sense. The time of flipping properties is over, toxic loans have demonstrated it's not a viable option. Banks are tight on the money, and most families are unsecure about their job security.
What does that mean?
That potential buyers from now on are people who intend to leave in their property for several years, and not speculate over it. Prices are still incredibly high. They were high in 2006, 2007 and 2008 but they were also high in 2005, 2004 and 2003. No family who make an average of $100K a year is feeling secure anymore to spend more that 1/2 their salary/year to pay their mortgage on a 2 or 3 bedroom in New York.
It's unbelievable that the smartest advces or answers i read on this site seems to come from local home buyers and not local RE brokers to my disappointment.
Are home buyers the only grounded people around here?
Why do you still make your client (sellers) have high expectations from them properties? You're position is to make them understand the points i have listed above, and even if that means fopr them selling 40% cheaper and lose money, well, that is the sad reality and nothing can change it. Until you do that, the market will not improve and you won't close any deal!
One thing you gotta stop doing is trying to convince people that now is the time to buy. You know it's wrong.
Trying to drag people into a bad investment now is just selfish & immoral!
0 votes
Anthony T.Cr…, , 11217
Mon Feb 9, 2009
Well in response to Phil and a few of my great colleagues . Lets look at the numbers in the years that i spoke about its easy to do since we all have such easy access to a computer. I have over 17 years in the business and I work off results.You ask any real estate pro, historian ,mathematician etc. they all will tell you that real estate goes in cycles. I will repeat see me in 2015. as the cycle continues.these aren't my numbers or gu -estimates. Phil seems like the guy that won't buy in any market because you're watching instead of buying. There are plenty of short sales and foreclosures to buy right now . Any buyers out there give me a call. but please never question my ethics unless you've read the code of ethics which agents our bound by. I stay true and dear to them as all agents should.Good night All!!
0 votes
Dana Schuster, Agent, Slidell, LA
Mon Feb 9, 2009
Thumbs up,Phil. I really like your answer.
0 votes
Alex-brooklyn, Home Buyer, Brooklyn, NY
Mon Feb 9, 2009
Hey Bill, Finally a smart guy is speaking up.
I totally agree w/ you. What bothers me is when i shared my input w/ the RE agent , he insisted that the property was valued at market price, defending his point by mentioning 2 properties on the same street that sold for the same price.
I tried to convince him that he cannot expect to drag people into the same kind of bad investment that the 2 other buyers on the street made and that from now on, speculation over Real estate is OVER and potential buyers are approaching a property purchase to live in it, not to flip it in 6 month.
What most brokers don't understand is that when the market was good, people knew they were overpaying a property but it didn't matter because still they could make money after they flipped it a few month after, but now this won't be happening anymore. To many approached the RE market like the stock market, and that's were they were wrong. Like the stock market, the RE market is plunging, therefore, buyers should accept the fact that they lost money on their investment , the same way people who lost money on their stocks, just have to swallow the pill. It hurts, yes, but you took a risk, and the person buying you off shall not be paying the price for your bad investment.
I
0 votes
Anthony T.Cr…, , 11217
Mon Feb 9, 2009
What we all have to understand ,agents as well as buyers and seller is this.... A quality property is a quality property, and will be sought after in any neighborhood. We all have that house that we would love to have in a particular neighborhood This is what will always keep buyers interests high.Real Estate goes in cycles.down in the mid 80's" on the rise from th mid to late "90 and surging through about 2006. Now in 2009 prices are down overall. But sales are still high. This is the result of foreclosures and short sales . So my point is see me in about 2015 and we will have forgotten about 2008 and 2009 because prices will be up and profits will be high.
0 votes
Everett Perry, Agent, Fresh Meadows, NY
Thu Feb 5, 2009
Cobble Hill, Park slope, Fort Greene (18 offers on a 995 listing 2 weeks ago), Brooklyn Heights, Clinton Hills, Boerum Hills.
0 votes
Heather, Home Buyer, 11217
Thu Feb 5, 2009
I have a question for Everett, who replied to Alex:
Is Eastern Parkway "downtown?" ( where there are still bidding wars,according to your post)
Is Crown Heights? The same thing that Alex mentioned is happening in Sheepshead Bay, Kensington, Midwood, and Bensonhurst, and is even worse in Bay Ridge. None of these nabes are downtown Bklyn.
0 votes
Everett Perry, Agent, Fresh Meadows, NY
Wed Feb 4, 2009
Get ready for this........sit down..

In downtown Brooklyn they still haev bidding wars on good properties. Dont ask me why or how but Downtown Brooklyn is not very affectted as of yet. I dont get it.
0 votes
Linda Bagley, Agent, Seattle, WA
Wed Feb 4, 2009
Alex,

Keep in mind many sellers have financed most of the equity out of their homes and can not sell for less.
They have to seel for enough to cover the closing costs.

Obviously this is not the case always, however when I see a listing that is way over priced, it is typically that they owe so much they are stuck. Can't sell for less unless the ask their lender to approve a "Short Sale".
0 votes
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