Every week, in the course of managing day to day life at Warburg Realty, I speak to our agents about the marketplace and their current experience. As the professionals with boots on the ground 24/7, they always give me the most up-to-date and concise information about how the market behaves in real time. Here are some of their observations from the front:
- Everyone agrees that the market has picked up speed again in the past few weeks after a bit of a lull in early February. A number of our agents have seen their well-priced apartments in the million to million and a half category go to multiple bids and settle 5% or 10% above the asking price. And we are seeing our higher priced exclusives go into contract as well, although above $5 million there are rarely multiple bids or even multiple prospective buyers. Traffic for the expensive units is thin, but the buyers are serious. They want to buy, and buy now. They also expect value for their dollar.
- Contracts get signed more slowly. A three-week due diligence period before contract completion no longer seems unusual. Both sides of the transaction feel less of a sense of urgency than they did a year ago.
- Locations off the beaten path provide terrific buyer opportunities. The market has not yet fully priced the value of the Second Avenue subway into our offerings east of Third Avenue, so that creates value possibilities. The grand old prewar buildings of East End Avenue and Sutton Place contain large listings which combine beauty, light, and remarkable value.
- The clean look sells. Like it or not, buyers expect the product they see to have a mid-century modern sensibility. Light and neutral furniture colors, white or off white walls, and less is more décor help buyers focus on the space rather than the stuff. As one of my top agents said to me last week, we try to get our sellers to understand that putting their home on the market changes it from a place which expresses their individual taste into a product which must compete in a complex marketplace. An empty apartment, or conversely one crammed with personal items or painted in highly particular colors, makes too specialized a statement or requires too much vision from the buyer. Mostly, buyers see what is, not what could be. So “what is” needs to be as broadly appealing as possible to make sure the unit sells.
- Buyers don’t want to deal with unanswered questions. Did the seller combine apartments but never amend the C of O? Is that greenhouse room on the terrace approved by the Department of Buildings? Is every room in the apartment air conditioned? These are just a few examples of issues we have faced recently which have created complicated transactions for us. All the ducks need to be in a row.
- The large, expensive townhouse market is extremely slow. The supply of buyers for these properties remains limited and deals tend to get negotiated at a snail’s pace. Correct pricing and a willingness to negotiate in earnest, and agents with a high level of expertise about the issues and process of selling real properties with a long history of alterations and renovations, are all required for bringing these deals to fruition.
- For the Brooklyn market I quote directly from my Warburg Brooklyn maven, Jamie Fedorko: “In Brooklyn, the market remains competitive. Across the board, well-priced, properly positioned product continues to trade quickly, sometimes, although far less frequently than before, via competitive bidding. Unlike in recent years, however, overpriced or poorly marketed product now lingers on the market for weeks or month. Supply, while not overflowing, is significantly improved from the halcyon days of 2014, 2015 and early 2016; buyers now have options aplenty. In Prospect Heights, Boerum Hill, North Park Slope and Downtown Brooklyn, luxurious new development projects like 550 Vanderbilt, The Hendrik and Baltic Park Slope surround the newly-formed Brooklyn Cultural District anchored by BAM. They have changed the face of these neighborhoods in real time and suddenly rendered resale product priced at $1100 per square foot a value play.”
I have always liked to say that New Yorkers have a limited tolerance for delayed gratification. Today’s market demonstrates that, when they perceive opportunity in the marketplace, our buyers and sellers don’t hesitate to act. Sellers can still get strong prices and move on with their lives. Buyers have negotiating opportunities and with a little more inventory, enjoy more choice than they did a year ago. That’s why we are busy!