Record drop on Wall Street gives shoppers reason to pause

By Adam Pincus | September 30, 2008 10:12PM

The historic swings on Wall Street this week are likely to further depress residential sales velocity, experts said, but even with such gyrations, house hunters have continued to browse.

Jonathan Miller, president and CEO of residential appraisal firm Miller Samuel, said Monday’s fall in share prices will likely further cool the real estate market.

“The impact is that there is more confusion and more information to process, and when that happens, when there is this sort of negative swirl … it is not unusual for them to pull back and wait,” he said. “The key is how long is the pause.”

The Dow Jones industrial average fell 777 points, or nearly 7 percent, on Monday, the largest point drop ever. Then yesterday it rebounded 485 points.

Elizabeth Sample, a senior vice president and managing director at Brown Harris Stevens, said the market turmoil made a hedge fund executive looking to buy in the Time Warner Center area rethink the deal on Monday.

“We were in the middle of a $20 million condo negotiation and had come to an accepted offer. But her buyer said “he wanted to wait and see,” she noted. “Not that he was not going to buy, but that he might reduce the offer.”

Despite delays, Sample said the environment is not as bad as it was when she started out in the real estate business in 1987, the year the stock market fell 22 percent.

“That was much worse than this,” she said.

Some house hunters are hoping to use the stock market woes as leverage.

“If I was a buyer I would use it to my advantage,” said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

She said a potential buyer on the Upper West side was doing just that. Braddock received a call from a broker whose client called Monday after the market closed.

“With the Dow down 777 points, what do you think the seller wants to do?” the client told the broker, Braddock said.

Despite the record drop, house hunters continued to look for properties.

Leonard Steinberg, an executive vice president at Prudential Douglas Elliman, said he was showing a couple a Chelsea apartment for the second time.

“They didn’t seem to be focused on the market, they seemed to be focused on their lives,” he said.