Cheap Today, Cheaper Tomorrow?

Well this just confirms what I (and other market bears) have been saying. Nice to hear it confirmed by a real estate pro. The question I have is whether sellers will want to take a rip-the-bandaid aproach and just cut their prices a lot now (unleashing pent up demand) or hold out with prices that, even with a slight discount off of peak, are ridiculous in this climate, will lead to lingering, and eventual steep price-cutting.

Posted by: Miss Muffett at November 18, 2008 1:13 PM

z - Nope. Not as long as sellers keep insisting their sky-high prices are rational. I will happily repeat what I think is inevitable since I am stunned by the continuing denial among some sellers. Did owners ever get tired of saying over and over that values only go up during the boom years? Not from what I read on this blog.

Posted by: Miss Muffett at November 18, 2008 1:46 PM

I disagree - well, thank you. But actually, there are a bunch of other schools we like! And contrary to your post, we are not expecting a hand over, just a rational price.

Posted by: Miss Muffett at November 18, 2008 1:57 PM

I disagree - I, and many others, suffered through plenty of owners'/sellers' repetitive gloating since this blog began, and endured ever climbing definitions of what was a "rational" price. Shoe's on the other foot.

Posted by: Miss Muffett at November 18, 2008 2:09 PM

Wasder - I've said this before, but will say it again. We priced conservatively when we sold and both parties got a good deal. Am I an altruist who will give things away way below market value? No, but I was realistic to price low-ish when the market was starting to turn - in other words, I *was* aiming to choose a rational price given the changing market conditions. Were I selling today, I would have priced *much* lower since the market has changed so much. And you know what? I still would have done just fine since I am trying to trade up, and the market we are now trying to trade up has gone done too (though at the time I sold, I was trying to secure enough money to trade up in *that* market). I've also said before that the buyers of my place, whom I stay in touch with, remain happy with their purchase since it was still lower priced than anything comparable at the time, and they intend to stay long term. I'm not pretending to be the arbiter of what is rational - the market is telling all of us that, every day that passes. But certain sellers are clearly not listening.

Posted by: Miss Muffett at November 18, 2008 2:19 PM

Z - I cannot tell you how many times we were told that our house budget just didn't cut it when we were looking pre-crash, and had that confirmed repeatedly on this blog - if I so much as suggested that prices could come down, many people disdained such comments as ridiculous wishful thinking. The difference now is that, up until pretty recently, users on this blog were not required to adopt a handle so there is really no way to know if the users insisting prices could only go up were the same small group of gloaters or not.

Posted by: Miss Muffett at November 18, 2008 2:28 PM

BrooklynGreene - much as we love Fort Greene and Prospect Heights, we have not looked very seriously at those neighborhoods since good public schools are one of our key criteria - private school is not an option for us. While it's true the schools in those areas are starting to change, we fear it would not be quickly enough for us given ages of our kids. What I did notice (since we've literally been looking for many years, and started before we even had kids) is that prices in those neighborhoods rose even more quickly than Park Slope and thus, I don't know if they are more vulnerable to a steeper decline. On the other hand, they were also probably significantly under-valued for many years.

Posted by: Miss Muffett at November 18, 2008 2:35 PM

Re: my school research - I did do tons of research already (I visited more than a dozen schools and read/discussed many more) but admittedly I limited it somewhat since there were other reasons I wanted to stay in District 15 beyond just school zone. One school I visited outside District 15 was the Community Roots Charter School, which is amazing. Anyway, I have indeed been hearing good things about PS11, I know PS9 has been getting better, etc. etc. and I certainly agree that there are a lot of up and coming schools that parents can get involved in to make even better. I did not in any way mean to pass judgment on other hoods, simply to say that, at the time we started our search, we limited it for various reasons, including school, and now that one child is already in public school, we don't want to live incredibly far away especially since we want our other child to either attend same school or one nearby. To the person who says I can better afford private school by renting, we very deliberately are seeking to keep our mortgage in line with our rental costs (we are lucky to have trade up cash in hand to do so) so this comment makes no sense. And besides, private school tuition is too expensive for us no matter what, but even if we could afford it, I believe in the principle of public school and am glad to be an active member of my community by being very involved in my local school. Anyway, enough about schools - we can stick to real estate.

Posted by: Miss Muffett at November 18, 2008 7:05 PM