Home Sellers Cutting Prices Like It’s 2009

During a single week earlier this month, sellers cut their asking price for 774 homes in Manhattan, Brooklyn, and Queens – breaking the single-week record set in 2009, when the global recession was punishing New York City real estate, the listings website StreetEasy reports. 

As New Yorkers returned from their summer vacations, sellers hoping to catch their attention created a surge in new listings, which only added to the glut of for-sale inventory resulting from an earlier listing spike this spring. The listings surge and ensuing price cuts served to buttress the findings of an earlier StreetEasy study, which noted that while New York City housing prices have risen nearly 30 percent since the market hit bottom in 2011, the return on investments in the galloping stock market has been five times greater. 

The headline on the StreetEasy study spoke of “false optimism” in the city’s housing market. "While New York City has come a long way in the decade since the financial crisis, the city's residential market dynamics seem to indicate that faith in ever-increasing real estate prices is once again unshakable," Grant Long, StreetEasy's senior economist, wrote in the earlier report. The recent round of price cuts seems to indicate that the faith in ever-increasing prices is finally being shaken. 

All is not gloom and doom. “Homes – particularly those at relatively affordable prices – remain in high demand in many areas of the city,” according to StreetEasy. “Without a sharper, more broadly based economic downturn, the current buyer’s market represents a healthy adjustment of asking prices to more realistic levels – and an excellent opportunity for shoppers to negotiate for the right home at the right price.” 

“It’s a big gut-check for sellers,” Long says. “We’re at a period in the sales market where sellers have been incredibly ambitious with the prices they’re asking. They’re having to come down and bring prices to where demand actually exists.”