Who Determines the Price of an Apartment?

I am willing to bet that most of you will agree that its the seller or the seller's broker that determines the price of an apartment. Well, if you did answer that way, you were wrong. Its actually "The Market" that determines the price of an apartment. A seller can ask any price they want but if they actually want to sell they will have to listen to what the buyers are saying.

In the 4th Quarter of 2009 the average apartment in NYC sold in 204 days. Fast forward to the 2nd Quarter of 2010 and apartments are selling in only 105 days, just about twice as fast. There are a lot of factors that explain this but the biggest one is price. Sellers have brought the price of their apartments down to a level at which buyers now feel there is value.

During the recession and the months of slow recovery that followed, buyers were hesitant to buy. They tested the waters, they stuck their toes in but few actually jumped in. Now its different, now they see value, now they see competition and realize that if they find a property that meets their needs and is priced properly that they can not hesitate, they need to buy.

The real estate market, just like any other financial market, is cyclical and right now we are in a very healthy place. Sellers are allowing "The Market" to determine the price.