Seasonal No More
July has been a hot month in every way at Warburg Realty. We have had some extremely high temperatures in New York City, but that has not inhibited an overheated real estate market. Earlier this year our first quarter, burdened by equally inclement weather at the other temperature extreme (ie it was freezing and snowy almost every day for months!), was unusually slow. Not too much inventory reached the market and that which did, unless priced exactly right, remained available. Deals came together slowly, and many of them fell apart. Agents, buyers, and sellers alike looked forward to the beginning of the spring market, which everyone assumed would usher in both a deeper inventory pool and a more active buyer population.
Neither really occurred. The market warmed up, but not in the way of spring markets past. And then, mid-May, just at the time when in each of the last few years our marketplace has slowed in anticipation of Memorial Day and the summer, activity took off.
Our exclusives, in price ranges from below $1 million to above $20 million, have largely been sold in the past six weeks, including many which spent six months or more on the market. Several factors seem to be at play here: a number of these properties took substantial price reductions during this period, which galvanized circling buyers. Some were re-staged to better present their innate qualities. But for many they just benefit from a greater sense of buyer urgency, perhaps accompanied by a sense of impatience about getting settled and moving on. As I have said for years, New Yorkers have a limited tolerance for delayed gratification!
This high level of activity looks to continue into August, with perhaps a slowdown in the last two weeks of the month, when people really are out of town until Labor Day. But the conventional wisdom in our business, that summer markets are tepid while spring markets are hot, has been stood on its head this year. And this is not the first time.
Like so much conventional wisdom, this notion emerges from an out-of-date paradigm. In the old days, Mom took the kids to the beach for the summer while Dad stayed in the city, ensconced in the Upper East Side co-op from which he commuted to his law or finance job further downtown. Today’s buyers look very different. Whether single or coupled, almost everyone works. And they are searching the Internet wherever they may go, in Provence or the Vineyard, in the Hamptons or the subway en route to the office, to see if anything new has come up for them. They are just as likely to make a buying decision in July, or December, as they are in April, or January.
Years ago, we always advised our sellers that once the July 4th week-end had passed, they should consider holding their properties off the market till September. We no longer give that advice. Just this week I suggested to several of my agents that they list properties now. Inventory is scarce and the market is at least as active as it has been at any time this year. July and August are no longer the dead zones of New York real estate. The Internet and the two income family have stripped the seasonality from our business.