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Real Estate Fears in NYC

By Lois DeSocio, Jacqueline Linge, Maureen Sullivan, and Brian Winkowski.

The New York City real estate market is no longer immune to the real estate drop that is hitting the rest of the country. Home values and sales have decreased throughout the metropolitan area, according to the Real Estate Board of New York. As a result, there is increasing anxiety among buyers and sellers, who are forced to navigate through news about plunging financial markets and shady mortgage lenders.

Jenny Laden is one of those sellers who is feeling the collective anxiety. She’s a single mom and an artist in Brooklyn who has lived in a Park Slope co-op in for ten years.

“All bets are off in this market and that’s very destabilizing and nerve-wrecking,” says Laden, whose home has been on the market for months. She has lowered the price twice already, and expects to have to lower it even more.

Home sales in Park Slope have decreased by 2.9 percent in the last year, with the average price per square foot for a co-op decreasing by 5.1 percent. And as noted above, it’s not just Park Slope that’s being hit with lower sales and home values – all of New York is feeling the effects of a declining real estate market, including Manhattan, Brooklyn, Bronx, Queens, and Staten Island.

Okay – so while the reasons for fear and anxiety among sellers is real and palpable, what about the buyers? How could they possibly have anxiety when the market is in their favor?

“The anxiety with the buyer right now is very different than it used to be,” says Michael Palka, the president and COO of White Cat Media, an online media company which owns SheFinds.com and MomFinds.com. Palka owns an apartment in Manhattan and is currently looking for a bigger place.

“It used to be I’m going to get priced out and shut out of the market place and I’m going to have to move somewhere that I don’t want to move to,” continued Palka. He states that now the anxiety stems from buying an apartment prematurely, before the market bottoms out.

“I’ve seen several things already that, you know, if I would seen these a year ago, I would of jumped on them. Now it feels just the opposite. We shouldn’t go for it, because we can do even better in another six months,” says Palka.

Real estate agents are well aware of buyers freezing with indecision. There’s even a new catchphrase among some realtors—analysis paralysis. Clients get lost in the numbers and can’t make a decision. This “anxiety overload,” according to a recent study published in Realtor Magazine Online, by the National Board of Realtors, has given realtors much to fret about. They have fewer clients, so their incomes are shrinking. Many clients hesitate to drop their prices, so homes don’t sell and buyers aren’t buying in the hopes that prices will drop even more.

Christopher Ressa is a sales associate for the Corcoran Group in Manhattan. He says while it took a little longer for the recession to impact real estate in New York City, the effects are now being felt. Housing prices have fallen by 20 percent and will most likely keep falling. And despite the lowering numbers, buyers are still holding out for those bottom numbers. However, Ressa sees a silver lining behind the dark real estate clouds. He believes the declining trend will not last for long, as interest rates for home mortgages are at an all time low.

“It’s never been so cheap to borrow money,” says Ressa. “People need to readjust the way they think about lending and borrowing… if you can do it now, and still get a really good deal, the housing market in NYC, I believe, will bounce back fairly quickly.”

Posted in Manhattan, Multimedia, Video