Time of the Season

As we move into May, the enormous demand for New York properties has not abated. Prospective buyers queue up outside Park Slope floor-through apartments, and two bedroom apartments on the Upper West Side create the same excitement which used to be reserved for celebrity sightings. But one thing has changed since the first quarter: there is actually more inventory in the marketplace.

An analysis of our own exclusives shows that we now have twice the volume of property (and dollar value) for sale than we had at March 31. Looking at our competitors indicates that they too have more inventory than they were offering six weeks ago. I think a series of interlocking factors account for this.

First, of course, listings are still seasonal. More property hits the market in April than in February in any year. And THIS year, with its endless winter and knee deep snowstorms, just getting out to view properties during the winter months required a real commitment. Sellers intuited this and waited for more clement weather. We are also seeing a gradual acceptance of the new tax structure. While many prospective sellers with large embedded capital gains are choosing to remain in their homes regardless of size, an increasing number have decided to accept the tax consequences and make lifestyle-driven decisions. The strength of the stock market has also created a greater sense of financial optimism, as it always does; this optimism then drives people on both sides of the real estate equation to greater flexibility and mobility. Simply put, people buy and sell more when they are optimistic about their own prospects. And somehow, despite its huge fluctuations and hair trigger reactivity, a strong stock market does that for people.

Of course, there is not more availability in every property category. Two bedrooms are still an ultra-hot commodity: two of our classic sixes, one Upper East and one Upper West, both priced in the mid $2 million range, went considerably over their asking prices in competitive bidding after only a week or ten days on the market. We are seeing the same phenomenon with our inventory on Central Park West, even in the higher price ranges – there has been such a dearth of availability in recent months that good six to ten room properties between $4 and $9 million are attracting attention and offers within a few weeks. This is particularly true of those properties which are already renovated.

In fact, one of the biggest challenges for sellers in this environment can be knowing that the best offers are likely to come early, from buyers who have been waiting months for the right thing to come along. A lot of interest does NOT mean your agent has underpriced the property. More likely a lack of offers in the first couple of weeks means the property is priced wrong.

But inventory has grown at the margins: in the studio and one bedroom category and with the more expensive units, those over $10 million. At both ends of this spectrum buyers tend to take a little more time, although for different reasons. First time buyers are anxious, while high end buyers usually don’t need to move. And in every price category ambitious pricing is keeping many properties on the market longer, thus swelling the number of available units.

It’s still a tough market for buyers. New properties do appear with more frequency than they did a few months ago, but the good ones don’t last. Nonetheless, more availability does mean more chances to win, and a better chance that the right thing will come along (or come along again if someone else nabbed the last one.) And the next great listing is always right around the corner.