One of the weirder things about writing for an outside publication is that the Headlines to your articles are typically written by someone else.
Whether its a bored, detached editor, or just the opposite — someone trolling for salacious spin to capture page views — very often the title slants the point of the article. Sometimes, it misses it entirely.
Such is the case in a Sunday NYT Real Estate article about apartment sales in New York City: Bidding Wars Resume.
Had the editors paid closer attention, they might have picked up the more nuanced story within the story. Following a few anecdotal examples 0f dubious value, they actually get to the meat of the article:
“In many cases, the jousting buyers start and end below the asking price. But in others, multiple bidders are pushing prices well above list price. To add a confounding twist, many of the bids are being made by buyers willing and able to pay all cash.
Brokers say that bidding wars are almost always set up by listings that are “priced well,” and by that they mean 20 to 30 percent below the high-water marks of early 2008.
Jonathan J. Miller, the president of the appraisal firm Miller Samuel, estimated that two-thirds of the roughly 4,000 apartments for sale in Manhattan are priced too high for the current market.
“So,” Mr. Miller said, “you have this weird situation right now where you have above-average inventory, but people are fighting over the ones that are priced correctly.”
Our man Jonathan Miller drops the truth bomb, and to make sure no one will miss it, I shall repeat it here in bold print: Two-thirds of inventory is priced too high for the current market.
That is the key lesson that I have been hammering on for nigh over 3 years now; it is why the big 4 foreclosure states (CA, NV, AZ, FL) have seen a huge surge in activity, why foreclosure moratoriums are counter-productive, and why most mortgage mods are doomed to failure: PRICES REMAIN TOO HIGH.
Residential Real Estate Price Freefall (January 27th, 2009)
Homes: Still Too Pricey to Stabilize (February 18th, 2009)
No Housing Recovery Before Further Price Declines (February 21st, 2009)
The Elusive Housing “Fair Value” (April 24th, 2009)
Median Income vs Median Home Price (April 23rd, 2009)
Updated: Case-Shiller 100-Year Chart (July 1st, 2009)
Bidding Wars Resume
VIVIAN S. TOY
NYT, November 13, 2009