Warburg Blog

Every month or so I ask my agents what they are seeing in the marketplace. Here is what they told me this week:
* In general Open House traffic is way up and exclusives are being shown far more frequently than in recent months. Many buyers who sidelined themselves in the winter are now back in the market. 
* Buyers feel more urgency as they read that the market is near or at bottom. They are also concerned that interest rates might float up, thus increasing the monthly cost of their purchase
* There is an increase in multiple bid or best and final situations, with some properties going at or over ask. In general those properties which had a lot of interest were either very well priced or in mint condition.
* In spite of the increase in activity, most buyers still want deals, and still expect to bid substantially below most asking prices
* Every part of the deal process takes longer. Negotiations are more drawn out, getting a mortgage takes twice as long as it used to, and even when  a buyer gets  a commitment the bank continues to do due diligence and create issues in buildings where tthe lender feels there is too little reserve or inadequate insurance. Many closings have been postponed for these reasons; in some situations banks have even withdrawn at the last minute because they were unsatisfied with the building’s situation.
* Sellers are still frequently unresponsive. Reasonable offers don’t receive counters.
* Many buyers  will make one offer and just sit on it for weeks.
* While some buyers, especially foreigners, still think the market will fall apart further, some sellers are taking the rising stock market as a sign that they should RAISE their prices, or bring their properties to the market higher. They don’t understand that it is precisely the current pricing which has brought buyers back into the marketplace.
* Almost every contract today below $2M is contingent.
* Use of on-line tools continues to mean that many buyers come to Open Houses unrepresented. They feel knowledgeable and empowered; they don’ t think they need a buyer’s agent in spite of evidence that buyers represented by agents often make better deals for themselves.

I assured my daughter that she and her husband  would not have much trouble finding a good place to buy at a good price when they moved to London last month. London, I figured, was like New York: beginning to rebound but still basically a buyer’s market. I was wrong. The flat she found, in a great area between the two big parks in Battersea, seems to be the hottest ticket in town. Everything she has seen and liked has already sold, but this one has six offers in the eight days since it has been on the market and is now going to sealed bids.

So I wondered, am I misperceiving my own market as well? Is it even more active than I believed? Maybe so. The evidence is quite solid that when properties are well priced and well located, they are are receiving a lot of interest. And a number of bids. And sometimes higher bids after an offer is accepted.

Now all this interest is dependent on one thing: price. The most desirable property, in the most desirable location, will still not sell if it isn’t priced right. But if it IS priced right, it can move fast.  A lot of buyers have moved back into the market who want to take advantage of lower prices and low interest rates. Hence eight buyers for the the well located flat in Battersea, or on West End, or in the West Village. Apparently it’s an international phenomenon.