The market is stagnant in parts as the value of properties gets
lost in translation between buyers and sellers. But no matter how slow
it gets, brokers agree that those who need to sell — or at least think
they do — can get it done.
In some cases the need to sell is tangible: a seller who has
overextended his investments and needs to unload one property to pay
off debt; financial sector employees who need to change locations as
companies restructure; or those who have to sell a nice new condo when
they find themselves out of a job.
“Those who need to sell — be it because of the volatility of the
stock market or lack of job security — are selling,” said Dr. Jeff
Tanenbaum, vice president of BARAK Realty. “If they’re serious, and
they need cash … people are dropping their prices.”
Brokers also report, however, that they are seeing a whole other
demographic of seller that is pricing to sell with speed. These are
nervous sellers who simply anticipate a job loss, or the drop in value
of a recently purchased investment property. Whether their fear is
warranted or not, brokers say that the mere jitters that follow the
words “credit crunch” are bringing prices down.
“A lot of people pricing at the lower end are panicking, [as units
are] now taking longer than 14 to 16 weeks to sell,” said Stacy Wilson,
a broker at Bond New York. “And even though they know Manhattan is
different, owners are getting nervous and cutting prices.”
Wilson believes that many sellers, affected by the “gloom and doom”
media reports about price drops across the country, anticipate a price
drop here and rush to get rid of their properties. In this way, a
“domino effect” is bringing the wave of price reductions to Manhattan.
“These owners know just enough to get themselves in trouble sometimes,”
she said. “Real estate is a long-term investment, not a liquid asset.”
Terrence Harding, vice president and associate broker at Corcoran,
agrees that some of the most eager sellers right now are unloading
extra investments or are in a financial situation where they can no
longer afford what they once could. “But then there were people who
just got a little nervous when the whole credit crunch hit,” he said.
Others believe that the price slippages are not unwarranted, but in
fact are overdue, and will be necessary to lubricate the market over
the next few months.
Jeff Sidney, vice president of Halstead Property, believes that
after Labor Day sellers will begin to realize that if they really need
to sell their home, they will have to “take a hit.” And if they don’t
absolutely need to, they may take their units off the market for a
while.
“I think that sellers who really have to sell their apartments are
going to be pushing hard … and there’s going to be a lot of low-balling
going on,” he said. “The only way that people are even going to get
[their asking price] is if there are multiple bids.”
Sidney predicts that after the annual summer lull in sales traffic
passes, sellers will become more realistic and a shift to a buyer’s
market will become apparent.
“It’s kind of a reality check for a lot of owners,” Harding noted.
“People will say, ‘We wanted to get such and such a price,’ but if they
really need to sell it, they won’t.”