From the NY Times:
FOR more than a year, home buyers who have been looking in the suburbs of Manhattan have struggled to reconcile market rhetoric with metro-area reality. Technically, the overstocked and sluggish market gave them the upper hand. But when it came to actual negotiations, sellers were clinging tightly to the past, and many scoffed at price reductions of more than a few percentage points.
Now, after a nearly nonexistent spring selling season and a summer marred by stock-market jitters, buyers and sellers are closer to a meeting of the minds. Real estate agents and market watchers throughout the region report that houses are selling at prices 5 to 18 percent lower than a year ago. When a property draws multiple bids these days, agents say, it’s usually because it’s in fantastic condition and priced for the current market.
“Homes that have come on the market in the last two or three months have started at prices that are more conservative,” said Savo Fries, manager of the Houlihan Lawrence offices in Yorktown and Croton-on-Hudson, both in Westchester County. “Sellers are finally more willing to listen.”
Even in the most exclusive enclaves, like Greenwich, Conn., where the median sale price has remained relatively flat this year at around $2 million, sellers impatient with the market are entertaining lower offers.
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Bargain hunters are likely to find sellers far more receptive elsewhere in the metropolitan area — but not everywhere. Prices in some towns are falling more steeply than in others. While it’s difficult to generalize across such a broad market, one overriding factor appears to be driving the differences: the proximity to Manhattan.Jeffrey G. Otteau, president of the Otteau Appraisal Group in East Brunswick, N.J., picked out the pattern while analyzing the unsold housing inventory in towns on and around the commuter rail lines into New Jersey. Communities directly on the rail lines and fairly close to the city, like Maplewood, Montclair and Chatham, tend to have less than six months’ worth of inventory, a level more characteristic of a rising market than a falling one. Some towns still on rail lines but farther out have slightly higher levels, and those off the rail lines altogether, including Caldwell, Belleville and Harding, more consistently show 6 to 12 months of inventory, an indicator of a downward market.
Mr. Otteau surmises that metro-area suburbs are reverting to their pre-1980 dependence upon Manhattan for high-paying jobs. Since 2000, he noted, rising housing costs in the suburbs coupled with the slow rate of job growth outside the city, particularly in high-salaried occupations, have contributed significantly to a trend: more residents who are United States citizens left New York, New Jersey and Connecticut than moved in.
In New Jersey from 2000 to 2006, for example, the number leaving the state exceeded the number who moved in by nearly 278,000, according to census data.
Because the Manhattan economy remains strong and its roaring housing market has yet to slow, housing demand is being driven outward along the rail lines. The towns least accessible to the city, however, are more vulnerable.
“We’ve returned to a market where Manhattan is once again king,” Mr. Otteau said.
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Not all sellers have come around to the new reality. “We have homes overpriced by $300,000 or $400,000 out of just pure insistence,” she said.