Give and Take
The climate in which New York City residential real estate changes hands morphs from year to year, from season to season, sometimes even from month to month. The buyer and seller experience of today differs considerably from that of this time in 2016; it also differs from that of the summer months of this year. As activity in the market has accelerated during October, new standards govern the successful behaviors which bring deals to fruition. Below are a few of my observations about the temperature of our market and what is required to move deals along today:
For Buyers:
• Don’t mistake the softening in the market over the past year as license to bid 25% under the asking price. Pricing this fall hews much closer to market value than it has during the past 12 to 18 months. Between multiple price reductions across the full spectrum of properties and the heightened focus by agents on working with sellers to bring properties to market with correct pricing, differences between asking and selling prices are shrinking in the resale marketplace. In the new development marketplace, where sponsors are usually both less eager to adjust asking prices and more eager to make deals, lower opening offers can still sometimes bear fruit for the determined buyer.
• Be ready. The decline in prices over the past year has generated considerable seller anxiety. Now the market is picking up steam again (in transaction volume, not in price appreciation.) Don’t make the anxiety worse by not having quick access to your financial information, or your attorney, or your financing. In markets like this one, in which neither buyer nor seller has the clear upper hand, deals stand or fall more from each party’s confidence in the other than other more material reasons. The seller has to have confidence in you if the deal is going to work.
• It won’t all go your way. Today we have what I like to call a broker’s market: one in which each side has to be persuaded, often with some reluctance, to make a final concession or two to bring the deal together. This can’t happen if you really believe you control the conversation. Be willing to make reasonable concessions, sometimes maybe even a little beyond your comfort zone. I promise you, when you are living in your new home a year from now, you won’t even remember it!
For Sellers:
• Your price remains the key to a prompt and profitable deal. Marketing counts. De-cluttering counts. Staging counts (a lot, in fact – probably more than anything else except price.) But in the end properly priced properties sell and improperly priced properties do not. While pricing is not an exact science, it does depend on a realistic appraisal of one’s own property. As my agent Joel Moss tells her sellers, ”When you list your property for sale you have to stop thinking of it as a home and start thinking of it as a product.” That product does have a market value, which cannot be changed by your expectations, needs, or wishes.
• First impressions are worth a million words. No matter how you love your collection of knick knacks, or that cute mauve ceiling you painted in the dining room, the buyer doesn’t love them. She finds them distracting; they interfere with her ability to clearly see the space and how it could work with HER aesthetic. Effective marketing will bring eyes to the property, and a strong agent will emphasize its good points and its value. But in the end every property has to sell itself. So make your property the best product it can be. Clean it up, strip it down, paint it Antique White, price it right, and see how the offers come in both higher and faster.
• It won’t all go your way. In the end, just like the buyer, you will have to compromise. And just like the buyer, the issues about which you gave in will almost certainly not matter to you a year later in your new home.
The market will remain active between now and the end of the year. Whichever side of the equation you are on (and many of you will be on both!) find a good broker and then be firm but reasonable. Between reasonable people almost any deal is possible.