Property Grunt

Wednesday, April 25, 2007

Random thoughts.

The last couple of days have been quite strange. The national housing markett is continuing its meltdown with a drop in sales not seen since 1989, yet according the great Jonathan Miller, Manhattan is pulling a rocky of sorts as once rising inventories have begun to subside and sales have begin to kick in. And rental inventories have dropped to an all time low in Manhattan. To make things more interesting the Dow has broke 13,000.

How it usually works is that when the stock market goes up, the real estate market goes down and vice versa. And it appears this is what is occurring right now. Nationally, real estate is getting clobbered. But as we see right now, there are holdouts, particularly the Manhattan market.

So what does this mean? Are we still experiencing a dead cat bounce? Or is this something else entirely different? Has Manhattan jumped the shark on real estate bubbles? Or is it wishful thinking that the best is yet to come?

Manhattan has all the making of pulling a hat trick; Wall Street is having a banner year so far, especially with those hedge funds and with rental inventories at all time low, landlords are sitting on the catbird seat. Also commercial leases are being signed hand over fist. It appears the residential market is following suit.

What will probably be a decisive factor are the emotional states of buyers and sellers. Buyers for the last couple of years have been getting the crapped kicked out of them because of the high prices and lack of inventory. Sellers have also been licking their wounds seeing apartments remain on the market for what seems like an eternity without getting an offer or one worth responding to.

Manhattan has still a lot of offer for residents with a strong market and an economy that is still running on cylinders. Or course the brand itself has never been better. Thank you Mayor Bloomberg.

With those attributes in mind, buyers are going to take advantage of this second wind and a market that is now plush with fresh inventory. Sellers might also be more apt to negotiate with their asking prices and will be open to sensible yet profitable offers.

Or maybe this is as good as it gets and the next quarter is when the Manhattan real estate market gets dragged under by the undertow of the national landscape.

I don’t know. What I do know is that a lot can happen in the next couple of months.

You have to figure out what is best for you. If you are a buyer, can you afford the payments? Is this where you want to live? Are you willing to make the commitment? Sellers, what is the right price for your property? Is it realistic? Are you willing to take the risk of losing money if your demands are not met? Are you willing to be flexible and to be able to get out of the market?

Let's be careful out there.