Is Time On My Side?
Overheard on the street, at Open Houses, on the phone with their agents – anywhere that buyers congregate or discuss real estate: ”I know this is a buyer’s market, but when will be the best time to buy?” “Do you think the market is going lower?” “Maybe I should wait three months and see if I can pick this up for 5% or 10% less.” And maybe these buyers can. But just as likely, maybe they can’t. One thing my (almost) 40 years in the brokerage business has taught me – you only see the bottom of any market in the rear view mirror.
When you are a buyer, it’s natural to want to make the best deal you can. And sometimes the economic climate is such that buyers know when their moment is upon them. Those who bought in 2009 and 2010 made great investments which have appreciated very substantially in value over the past decade. But indicators rarely present as clearly as they did in the years right after the recession. In today’s market, no one knows what is coming next. The economy seems strong, and unemployment has hit record lows. But the populace as a whole remains unsettled and uncertain as to what will happen next. Buyers are coming back into the market as they see prices decline, but they cannot tell when to bid.
Each month, we see increasing numbers of sellers get into line with market realities. As that occurs, those properties attract more interest and begin to go into contract. And as THAT happens, we begin to see frustration emerge in the eyes of the buyers who have waited too long, who were sure that the market for this property (whatever it might be) had lower to go. Past a certain point, trying to time the market can leave a buyer exposed and disappointed.
For years I have listened to buyers tell me that they plan to wait, that the market will surely drop within the next six to twelve months (a disproportionate number of these buyers, I have to admit, are investment bankers.) Frequently these buyers end up priced out, or buying near the top, because they have waited so long. Honestly no one ever knows when the peak occurs, nor do they know when the nadir occurs. As either a buyer or a seller, you just have to hope to be more or less on the right side of history.
This environment presents both an opportunity and a challenge for agents. Because of our reputation in the world as “aggressive,” agents must always be careful not to push buyers too hard. That said, moments like this one do create real buyer opportunities. By presenting buyers with current opportunities AND historical data demonstrating the value in today’s marketplace compared to that of a few years ago, we can help them to understand the value which current market conditions can offer them.
Properties across Manhattan are trading at prices we have not seen for years. Savvy buyers don’t outsmart themselves. They recognize value, and they negotiate towards it. Buyer opportunity abounds in the current environment, in which price reductions are a daily, across-the-boards occurrence, and many asking prices remain available to further negotiation. But there is always some danger in waiting too long or pushing a price negotiation too hard. Because sometimes, timing ISN’T everything!