Last Week's Biggest Sales

MFN:
but remember buyers can only buy a house a seller is willing to sell….
not all sellers HAVE to sell as I feel we are seeing here in Prime Brownstone BK with people delisting….

“many sellers ain’t agreeing to the “low ball offers” buyers are submitting”

Posted by: gemini10 at August 18, 2009 3:59 PM

Buyers are the only people who determine the price of a property. Plain and simple.

If they are not willing to pay ask, and sellers are unwilling to accept the offers they are getting, then there are no buyers. Illiquid market. Delistings. Etc. And THIS is what we are seeing.

That’s the big fallacy. That because you own a property, as a seller you somehow control the market. Buyers determine what they feel is fair value based on a lot of factors. A few years ago, they determined the price was way higher than it should be due to cheap credit and no money down. Now, well quite a different set of circumstances.

So, if indeed the prices are low-ball as you’re saying, then that’s what the market will bear. Because if they were getting better offers, theyd sell. It’s the disconnect between the ask/bid spread.

Sellers, however, and there’s AMPLE evidence and studies to support this, are deluding themselves. They believed their places were worth more than they are then, and are psychologically attached to them as we are to all things we own.

Now, if you believe that delisting, and sitting on a property for 6 months is somehow going to elevate the offer price when you come back this winter, or next spring, I say good ‘effin luck with that.

We are in a secular bear market in real estate (and probably a secular bear financial market with one spectactular cyclical bear market rally). Prices ain’t goin up anytime soon. Where are the tailwinds? Where? You think rising interest rates, an inevitability, are going to HELP property prices?

So those people are going to get burned.

If you can wait 5-7 years to sell, yeah, you might make more than if you sold right now. But that’s an awful lot of time/market risk to price into holding a 1+ million dollar asset IMHO, when you could have the cash in hand now and deploy it elsewhere.

Look at how it turned out for those folks on Park Place in this thread. Or Fort Greene. Bad move.

We are in a massive deleveraging of the consumer—saving and shedding debt. not overspending on real estate. And psychologically, across the country, people have been scarred by the idea that real estate is a no-brainer investment. It is not. It’s consumption. Beautiful consumption, but unless there’s a rent roll bringing you income, it’s consumption and a liability that must be paid monthly.

Buyers control the market.

Without them, what you have a lot of people, sitting on homes they have to continue to make payments on. Some are in the black, some are in the red with adjustable rate mortgages and about to get effed in the A. But they’re all just homeowners of varying levels of financial strength with an illiquid asset until they find a buyer willing to pay a certain price.

Moneyfornothing:
you have valid points, but I feel that especially in prime brownstone areas:
buyers ain’t buying because many sellers ain’t agreeing to the “low ball offers” buyers are submitting
so you have a stale RE market…

IB-
i never said it couldn’t happen; my view is that it is unlikely. your view is that it will probably happen.

and i don’t object to someone taking that view, at all. it’s more the tiring hyperbole that comes with everyone’s justification for what amount to opinions. and the stongest opinions are the most tiresome of all. can you say, ad nauseum?

all we know is the trading prices of a very small subset of houses on the market, which itself is a tiny subset of the entire real estate stock. These prices reflect the balance today; everything else is an opinion about the future.