Spring Forward

As we move into the middle of April, many of us in the business are wondering, will there be the traditional spring market? Usually at about this time there is an uptick in inventory, prices begin to ascend (especially with help such as Vivian Toy’s upbeat article about real estate sales in the Sunday New York Times) and deals begin to flow fast and strong. So is it happening in 2012?

Let’s start by acknowledging that the market is already strong. We have seen plenty of deals so far this year, especially, as I noted in my first quarter market report two weeks ago, in the upper and lower echelons of the market rather than the middle. At Warburg we expect the market to remain on track, maybe even accelerate a little, but we don’t anticipate a big jump in prices and certainly not one in inventory. Here’s how I predict spring will come to real estate in New York:

* Over all, the market will remain strong. This is particularly true in the new condominium market, to which foreign money flocks; the small apartment market, which every day embraces more refugees from the overheated rental market; the major co-op market, which is never long on inventory but is currently long on demand; and everything in northern Brooklyn, which seems to be in an ongoing best and final offer situation for property after property.

* If it is going to sell fast and well, it will have to be priced right. We have noticed that almost all of our new listings have the same experience in the market: 25 showings the first week, 12 the second week, 4 the third week, and if you don’t have an offer by Week Four then you have to settle in for a while. So, this spring, pricing right at the get-go is vitally important. The units which are still on the market after six months have one thing in common: they were not priced right at first and did not sell during the early days of excitement and pent up demand. Our market is efficient that way.

* Buyers are going to be choosing from limited options. There are not going to be a lot of inventory alternatives for most buyers. Much of what is available has been around a long time, for the reasons described above.  And not much new is coming on, even though it is April. So once they have seen what is out there, buyers will not have a lot more options in the weeks and months ahead. 

* First impressions will matter more than ever. Sellers hate it when we bring up staging. But every property needs to be staged. Less clutter, a clean paint job, shiny floors, edited furniture – very few properties, even those in excellent condition, don’t need one of the above. And each year, buyers have less patience. They don’t revisit and generally they don’t reconsider. So sellers: don’t wait to stage. Make it part of your initial plan. Since the recession staging has taken on critical importance. Buyers just expect that properties they view will look nice.

Principals and brokers all fare well in a market like this one. Prices (except in the aforementioned Brooklyn) are not runaway, negotiations are expected (caveat: see Brooklyn, above, where all the negotiating is up!), and most deals are struck at a point of acceptable discomfort for both sides. We might wish for a little more inventory, but we cannot have everything. The weather is beautiful, Central Park and the planters on a thousand terraces and balconies are in bloom, and the dream is just waiting for us to live it.