Sales may be down, but interest in the real estate market is far from waning.
More than 40 people recently paid the price of admission at the 92nd Street Y in Manhattan to attend a seminar by one of the city's most successful brokers, Jacky Teplitzky of Prudential Douglas Elliman. The audience of renters, homeowners, investors and brokers shared one common question -- how low will prices go?
"We get the sense from reading articles that the market is dropping but we don't think it's hit any kind of a bottom so we're hoping she gives us a forecast as to whether it's going to bottom further," said Rashmi Nehra, a renter on the Upper West Side.
Teplitzky said that kind of mentality is permeating the market.
"Everybody is afraid to be the last fool to pay high because everybody is telling them more bad news is coming and prices are going to go down," said Teplitzky.
Broker Donata Marcus took fastidious notes during Teplitzky's speech. She said buyers need to be coaxed past the fear factor.
"There's good value, there's money out there to be borrowed. People need to move forward and not be terrified that they haven't picked the very bottom of the market," said Marcus.
Teplitzky said part of the pause in transactions is the sudden shift of power from seller to buyer that took place toward the end of '08.
"Everybody is smelling the blood on the street and everybody for the first time is saying 'I have the power. And if I have the power I'm going to use it'," said Teplitzky.
That sense of entitlement has led to some big gaps between asking price and offer price, like a recent offer of $2 million on a condo listed at $3 million. Teplitzky said this is particularly bad news for sellers who bought new construction in the past two years.
"Chances are they will have to bite the bullet and lose money. If they don't want to lose money they will have to stay put for at least two years if they want top break even or make a little money," said Teplitzky.
Teplitzky advises investors to hold off as well, sensing developers will begin making concessions during 2009. But to buyers who have good credit and a down payment she said to get out there and look. Also, make a wish list, because with interest rates low and inventory high, Teplitzky said chances are you can get what you wish for.
"In my opinion, if you're going to live in it and you're going to be there for five to seven years and your gut is telling you 'this is my home', and you love it, buy it," said Teplitzky.