Property Grunt

Tuesday, April 04, 2006

A game of telephone

Do you remember playing the telephone game? The game works like this. You get a group of people in line, one person at one end whispers a sentence and from that pint the message is whispered down the line. The hilarity ensues when last person states the message and it turns out is completely different from what the person said. In my communciation classes, my teachers often employed the telephone game to show information gets changes through multiple parties.

This is how I feel when I read the reaction about Jonathan Miller's recent report on the housing market. One media outlet says that the market is that this is evidence that the market is still cooling off, another perspective is that happy days are here again.

I predict the following will occur.

1. REBNY, mortgage and real estate brokers will send a blast email of the NYT article or any other articlethat presents a positive perspective on the market to every real estate agent in Manhattan and tell them to spread the word that Manhattan has missed the bubble, ad nauseum.

2. Real estate agents will be carpet bombed with even more questions about whether the bubble has burst.

3. Barbara Corcoran will use this as an excuse to hit GMA to show off her cute thin, tight, little body and rave how the New York market is bubble proof and that you better buy now since prices are just going up and she is so much more fabulous than you are.

4. Sellers will demand more money and may delude themselves that the bidding war era has returned and more screaming matches will occur which will bring more material for Curbed.

What do I make of all of this? I do concur with Jonathan, that the market is flat. HoweverI think that sales will go up a bit in the spring since that is the start of the season. But please be aware that there are some monkey wrenches that could be thrown in the works. Besides higher interest rates and the oil market, there is also the inventory question.

This is from the NYT.

Yet there were some signs of caution in the figures released yesterday. Although prices were up 7 percent to 8 percent from figures reported a year ago, depending on the report, they remained below the spikes in prices reported last spring. And the inventories of unsold apartments also rose significantly, with a rising supply of new condominiums coming to the market. Hundreds of additional new or newly converted condominium apartments are due to come on the market this year.

Manhattan isn't alone. Brooklyn, particularly in the area of Williamsburg and Greenpoint is expecting more new arrivals onto their market. If there is a glut of inventory, then forget anything about a resurgence. Alot of buyers may simply withdraw from a safe distance to wait for prices to drop.