This isn't Kansas; and when bad news is actually good news

There seems to be a strange doubleness here.
--Neil Hertz, Professor of English, Johns Hopkins University

Well, I woke up this morning feeling a bit bi-polar myself, so what better time to discuss two real estate dichotomies:
Manhattan v. Other Parts of the United States, and Housing Starts as Bad News v. Housing Starts as Good News.

In a survey by Candace Taylor of The Real Deal (see previous post
"Springing forward, or falling back") we were asked what brokers were saying to each other about the market. Our answer was "The most common conversations revolve around the need to properly determine value, [and] find the most palatable way to deliver that information to the sellers...Buyers, too, are viewed as needing help to properly quantify the new values. Once sellers, buyers and brokers are on the same page, or at least within the same chapter, the foundation for a healthy, functioning market will return".

That was 3 months ago and clearly most buyers and sellers have now resolved it's a buyer's market and prices have dropped, but to what extent?...there's the rub, and a lead-in to the
Manhattan v. Other Parts of the United States dichotomy.

As was our hope, most buyers and sellers have properly qualified the present market, but when quantify the new pricing most buyers are consulting the change in certain national real estate values to formulate their offers. The result is lost opportunities to benefit from the favorable discounts that do exist. What's happening on a national level and what's happening in Manhattan recalls the old idiom of comparing apples and oranges or perhaps more suitably, apples and radios. Manhattan has experienced a drop in values but not on the same scale as other parts of the country. This truth is hard to deliver because as brokers--and like Cassandra in Greek mythology--we seem doomed to have our words go unbelieved. All we can suggest to the skeptics is do your research using local figures; and the best, and universally accepted source for that information can be found at

The second dichotomy,
Housing Starts as Bad News v. Housing Starts as Good News, seems unexplored by many. For some peculiar reason only negative meaning is being assigned to reductions in housing starts. These figures are constantly being delivered as bad news and cause for alarm. If we can assume most of us are not in construction or its ancillary industries, this news is actually favorable and helps bolster the value of our homes. These reductions also reinforce the probability of owners remaining "above water" as far as their mortgages are concerned and buoy their chances of weathering the storm. One of the many reasons the Manhattan real estate market has remained more stable than other parts of the nation is future housing starts were already being affected starting last July when changes in the structure of real estate tax abatements made building less attractive to developers. Since this crisis began the listing inventory in Manhattan has not had the level of increases we would have experienced if housing starts continued to expand as before. Again, we see this as good news, not bad.

To review another reason we've seen slower increases in inventory than original expected, please see our previous post
"Not Drowning, but Wavering".

--Leigh Zaph. (any comments can be emailed to us at, thanks).