disconnect / sellers struggle to find The Market

The Miller graphs it
Interesting graph on yesterday’s Curbed contribution from The Miller, Three Cents Worth: Listing Discount A Spiked Punch . Bottom Line is that what The Miller calls Listing Discount (the gaps between the last listing price and the contract price) was 7.3% in 4Q08 and 8.9% in January for closed Manhattan coop and condo transactions — twice as high as in any quarter going back through 2004. In response to my question in the comments,The Miller cited (further down the thread) to one of his earlier charts that shows listing discount by quarter going back to 1997, showing that the 4Q08 listing discount barely exceeds those of the first two quarters of 1997 and that listing discount has not touched even 5% in any quarter but one in the last ten years.

It has been a long time (and we’ve been through some very different markets) since there has been as large a gap between seller expectations and hard-nosed buyer negotiating as in the last quarter. And the data for January 2009 trends still higher … to 8.9%.

is this about seller behavior or buyer behavior?
My first thought was that this (previously unheard of) gap in January reflects sellers being unable to figure out where The Market is, then negotiating on the fly. But I wonder if the gap is more about buyers adjusting to The Market by making low-ball bids more often than in past times, and then sticking to lower numbers when sellers actually negotiate off the low-ball bids. (Or maybe it does not matter what it means?)

arrggghhhh … it means something; I’m just not sure what.

© Sandy Mattingly 2009