On the Walk-Through, Damon Darlin reiterates a good point:
Columnist Carol Lloyd notes that even if prices drop significantly, they have appreciated so much over the past few years that the people who couldn’t afford a house in 1997 won’t suddenly be able to afford one in 2007.
Read Carol Lloyd’s original post.
I couldn’t agree more. If you’re waiting for a rock-bottom moment, when all of the appreciation of the last decade has evaporated, you could be waiting for a very long time indeed. In the interim, deals are being made in the middle–at prices below the peak of last year, but well above the prices at which most people bought their current homes.
I am already seeing more sellers realizing that some of their “paper gains” from last spring have past, but they can still reap huge profits selling in the current market when they price appropriately, and below last year’s levels. Buyers are also realizing that the negotiability factor has increased and opportunities are again presenting themselves. Minds, it appears, are beginning to meet.
There are buyers who scoffed at prices several years ago, then got nervous as prices only went higher. Will Manhattan property prices come down enough to please them this time? I wouldn’t hold my breath. Mortgage rates are headed in the wrong direction, and the reality is that relative to some global markets, like London and Paris, New York still looks cheap. However, if you’re determined to get into the Manhattan market, the opportunity to get in before they next round of insanity is in sight.
Photo: Jennifer Breu