True Gotham

The current Manhattan residential real estate market couldn't possibly be more confusing.  I'm not just talking about buyers either.  All the players in the game are trying to make some sense of the market as a whole.  Here's what I'm seeing that is making the heads spin of buyers, sellers, bankers, appraisers, real estate agents, and attorneys:

• No rhyme or reason to pricing:  It has become increasingly more difficult to compare properties in today's market place as sellers and their agents all have different perspectives of where the market is and where it is going.  Prices are all over the map with some properties priced higher than they would have been last summer and others priced as much as 40% below last summer's values.
• Perception of "value" varies:  Each buyer is coming to the table with their own perception of what value would be in today's market. Some appreciate a well priced home and others continue to shake their heads with confusion not being able to make sense of  or compare the 10 or so properties that they have viewed.
• Uncertainty over market direction:  No one can deny that the market has declined significantly and it remains challenging at best to determine if and how much further prices will drop before we see a stabilization. 
• Confused agents unintentionally hindering the transaction process:  There is no doubt that real estate agents want to sell the property that they represent.  That said, in trying to make sense of current market conditions, the advice to be patient can often bite us in the behind later in the process.  It is a fact that more often than not, the best offers come early in the marketing process so when an agent advises a seller to not counter an offer in an effort to keep dialogue going, they could very well be doing that seller a major disservice. If an asking price is off the charts, an offer of 20-30% below should be countered IMHO.
• Seller motivation varies:  We still have sellers out there who insist they "don't have to move" and are willing to be patient in waiting for "their price."  The problem is that the buyers are also waiting for "their price" which is causing a bit of a stalemate in many cases.  No seller wants to be perceived as desperate and no buyer wants to feel that they have over-paid in a soft market.

These are just some of the factors that are contributing to the confusion that is today's Manhattan real estate market.  Making sense of it is no easy task and requires a greater commitment to diligence and research than I have seen in my 17 years selling Manhattan real estate.

I'm house-hunting near Boston right now, and that's a pretty accurate description of what I'm seeing here, too. It's crazy! I'd guess it's happening to some degree or another in all the markets that have not yet fully corrected from the bubble. One wants to believe that the congested cities of the northeast won't be wiped out as badly as the overbuilt speculator havens of Vegas, Phoenix, Florida, SoCal, etc., but the truth is no one knows. We've got massive government intervention trying to keep things propped up; what happens when that ends?

The Problem is that brokers are still using the same old, say anything to get the listing method. Sellers don't realize the broker is not the buyer. Listings are sitting for months. Sellers think even though stock equity went down and stocks are sold at a loss, somehow you are never supposed to sell a home for less than you paid. It's time for people to wake up. Everything, including your own home or investment property is worth far, far less than you think. So, please do not go with brokers who have pie-in-the-sky pricing dreams. And brokers with tons of listings have tons of listings because they can't sell any of them. It might be better to go with a broker who has less listings is far, far hungrier.

Thanks for the insight Moopheus. So true that no one knows where things are going in any markets including our big northeast cities. only time will tell.

Alex,

I partially agree with you but would also say that not ALL brokers are serving the Kool-Aid and many of us have multiple listings because our sellers are listening to us and pricing very aggressively. The biggest problem in today's market is that buyers can't make heads or tails of the prices that are all over the place. Some agents as you say will tell a seller whatever they want to hear to get the listing and others are pricing as much as 40% below prices of last summer. Hard to decipher what's going on in that environment.

I disagree about hiring an agent with fewer listings because they are "hungrier." My experience has been that a "hungry" agent is exactly the one who more frequently serves the Kool-Aid and tells a seller whatever they want to hear in an attempt to generate business often times without the seller's best interest in mind. Some even take listings just to generate buyers for other properties all the while knowing that they will never sell the over-priced property once they obtain the exclusive.

Lastly, properties are spending more time on the market these days despite price as buyers have more inventory to peruse and a level of apprehension that is only overcome with time.

Doug, If todays DE real estate report doesn't convince sellers that there is a new reality in Manhattan's real estate market, I don't what will!!!