Bulletin From The Front
The New York spring market! This year, amidst the oil price crisis and the China slowdown and the negative interest rates in Europe, I thought there might not be a spring market. But then, the last week in March, inventory began to appear and buyers were ready for it. The past three weeks have been extremely active.
Throughout the first quarter, only smaller units sold quickly. In recent weeks that popularity and competitiveness have surged into our mid-market as well. Many of our new exclusives in the $3 million to $6 million range are selling during their first or second week, some with multiple bids driving the prices above asking. We are also seeing more activity with higher priced listings in excess of $6 million; that market still moves slowly but the absorption rate has accelerated.
What changed? I think a number of factors coalesced during March. First, the stock market rebounded, moving, albeit jaggedly, into positive territory for the first time this year. Overall U.S. economic indicators remain good. And perhaps most significantly, sellers of New York properties have begun to descend from the pricing stratosphere. More apartments are being cleaned out and staged in neutral colors with comfortable contemporary furniture. When buyers have the opportunity to view properly priced units into which they can visually project their own lives, the sales curve moves up.
While the rise and fall of the $50 million condominium boom may make for entertaining, prurient reading, the substantial majority of homes sold in Manhattan, Brooklyn and Queens are still co-ops or single family homes. And the vast majority of THOSE is bought by local residents. It is in this category, the local purchaser seeking a home, that the market has reawakened. But even here, amidst a real increase in demand, market exuberance is absent.
Multiple global economic pressure points have dampened possible excesses in our markets. Buyers bid, but they bid with caution and after doing their homework. More than anything, mint condition inspires buyers to step up to the plate. Few people want to add renovation to their to-do list in our already high-pressure environment, so unrenovated properties must be inexpensively priced for their markets to receive attention. Even then they are likely to be a slower sell. And without a staging which cleans and updates their look, such properties can linger for a year or more.
So what’s the takeaway? Sellers: price it properly and clean it out. If it is tired, work with a professional stager; the investment will return to you multi-fold in both price achieved and time on the market saved. Buyers: while more has come onto the market, inventory is still tight. If you find what you want, go after it. Make sure you know exactly what you are getting into and have a bid ceiling above which you will not go. That keeps it rational. And rational, for both sides of the transaction today, is the name of the game!