The economy has made it difficult for buyers to know if they're getting a fair price for what they're bidding on, or if they should wait for prices to drop a bit more. It's a good question, but there is a logical way to approach pricing, even in this unsteady market.
It's times like this that we have to remember that real estate has always been considered a long term investment, not something that you can cash out on in a year or two. A typical apartment in Manhattan appreciates anywhere between 3% and 7% a year, as is shown by the orange and green lines above.
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When you read sensational headlines about housing prices sinking 20% to 30%, keep in mind that they're sinking from an artificial high, as shown by the blue line. What may seem like a bargain basement price now, compared to two or three years ago, is actually the natural appreciation of the unit.
Prices of closed deals on condos and co-ops city-wide in the first quarter of 2009 can be found here.
Chart above courtesy of the Vanderbilt Appraisal Company.
