It's still $ per sq ft stupid!

Only RE prices can do the real work in reducing inventory and getting sales going again. Homebuilders and owners will realize this as we get to the end of the rope. There is nothing else left for the feds to poke at!

Buying down mortgages will complement today's action but affordability is a multi-edged sword and financing terms are only one part of the new era in home ownership affordability.

Note that the W Hotel is beginning to show the cracks discussed before. Fortress in trouble, Applied caught in the downdraft, Hoboken city taxes making up the gap and Wall Street bleeding quietly but hard.

1125MP is going on sale as fast as it closes. Sounds like too many decided to hang on rather than walk away! The more stories like this appear, the longer this RE depression will linger - 2010 or more.

The feds are scared by the new mortgage onslaught at the doorstep. And these are decent credit borrowers!

NY Times: A $152,000 Change of Heart

As difficult as it is to do, this buyer removed the emotion and made an economic decision that will turn out for the better within two years - much better!


The New York Times
December 14, 2008

Big Deal

A $152,000 Change of Heart

By JOSH BARBANEL

CATHERINE HOLMES, a senior vice president at Barak Realty, thought she had found the perfect urban pied-à-terre for a suburban couple looking for a big-city view, a touch of the dramatic or a glimpse of the water.

But in this uncertain market, even perfection does not guarantee that a done deal stays done.

After trudging through eight or nine apartments one day last summer, the buyers found exactly what they wanted: a fourth-floor apartment on the East River, at 45 Sutton Place South, a 20-story white-brick co-op built in the 1950s.

“Feel like you are on board a yacht living over the water in a unique apartment,” gushed the listing by Joan Sacks, an agent at Stribling & Associates who has several listings in the building and happens to live there as well.

The apartment had a large master bedroom, a dining room that could be turned into a second bedroom, two bathrooms and a maintenance fee of just under $1,600 a month. It was listed last spring for $1.775 million, but as the market slowed, the price had been cut to just under $1.6 million.

By the end of that long day of apartment hunting, the buyers made an offer, and the sellers agreed to accept about $1.52 million.

In late August, the buyers paid a deposit of $152,000, 10 percent of the purchase price. But by the time the board had approved the transaction, in mid-October, the market had slowed further, and calls to the buyers’ lawyers about a closing date were not immediately returned.

It turned out that the buyers had “lost confidence in the market and wanted a significant price reduction, $150,000,” Ms. Holmes said.

But with no contingency clause in the contract, the seller held firm, triggering a contest of wills. Lawyers for the seller set a closing for early December.

But the buyer did not show up to close and the seller kept the deposit — a first for both the seller’s broker, Ms. Sacks, and the buyer’s broker, Ms. Holmes.

“They are going to wait the market out and see what happens,” Ms. Holmes said. “Their prognosis is that a year from now they will be able to get something like this for $1 million.”

Last week, the apartment came off the market. The seller plans to spend some of the $152,000 to update the bathrooms to increase its appeal. And the brokers will receive a small consolation prize, a commission on the forfeited deposit.

E-mail: bigdeal@nytimes.com