February 1st 2011
Mann Report Residential
On December 24th as 2010 was drawing to a close, a front page New York Times headline reported “Experts Citing Rising Hopes for Economy.” Heralding a “new optimism” and quoting forecasters and policy makers who were revising earlier predictions, the Times journalist declared that our recovery “will gain substantial momentum in 2011.”
The key word above is “substantial” and to that we add the Yiddish word “halevai.” Pronounced phonetically in three syllables, sometimes dropping the initial “H,” ha-le-vai is a wonderfully expressive sentiment. From the Hebrew meaning “would that,” it has come to mean “it should only be so.”
Less than six months ago, another lead Times story—“Existing Home Sales Hit 15-Year Low”—informed us that these sales were at their lowest level since 1995. Less than six months later, the trend had reversed itself and by December, National Association of Realtors’ Chief Economist Lawrence Yu observed that after bottoming out in July, residential sales nationwide had regained traction in November with stabilizing prices. Despite an expected slight rise in mortgage interest rates, Yu predicts a year of growth for 2011 with modest appreciation.
As I write this column, days before the New Year, numerous economic factors are contributing to a renewed optimism. Retail sales have been improving steadily, rising 5.5% in year-end spending with a gain of 8.4% in jewelry purchases; large corporations are reporting strong profits; both the Dow and S&P 500 reached a two year high Christmas week; and new claims for unemployment benefits declined this December.
We’re on significantly firmer ground than we were three years ago as we begin 2011 and move from a stalled to an improving economy. As our jobless recovery continues to gain strength, consumer confidence is growing. We’ve definitely turned the corner, but as the European debt crisis spreads and as U.S. unemployment statistics hover at 9% levels, we remain vulnerable. Thus the reason for the refrain “Halevai.”
A short primer for buyers and sellers
For buyers: If you’ve been thinking about buying, now is the best time to take action. Hire a broker to help you to navigate open houses and to evaluate purchase opportunities. You won’t be saving money by going it alone. On the contrary, you’re more likely to lose the property you want because you lack broker representation. In point of fact, in today’s challenging market, although a direct deal means more dollars to the seller’s broker, by and large experienced agents prefer to do a deal with another experienced broker representing a buyer than dealing directly with the buyer because of inherent conflicts of interests.
For sellers: If you’re thinking of selling, now is the time to prepare your home for showing. Consult with your broker and staging professionals, strip the place of clutter and scrub everywhere. Sales activity is increasing steadily, and quality inventory is still lacking. Interview several agents before hiring an exclusive broker. Resist the temptation to choose the one who tries to win your business with a high but unachievable price. When you price above the market, valuable time is lost, and subsequent price reductions serve only to devalue the property by raising buyer doubts—why has the property been on so long, what’s wrong with it? Rather than test the waters with an unrealistic number, it’s advisable to set a price that is close enough to the target to generate interest and stimulate bids while still leaving room to negotiate.
The best bet for buyers and sellers alike is to enlist the services of an NYRS certified agent. New York Residential Specialists comprise a new breed of top brokers from the city’s leading brokerage firms. Dedicated to providing the finest customer service, they are experienced, skillful negotiators, committed to ethical behavior, and understand the highs and lows of real estate cycles.
First awarded in 2007 by the Real Estate Board of New York—REBNY—the NYRS designation identifies those Associate Brokers with a minimum of 5 years experience and $50M in sales who have successfully completed an advanced graduate program designed specifically for the nuances of the New York City market. Created by brokers for brokers, these courses are taught by industry leaders and cover real estate law, macro-economics, commercial real estate, ethics, negotiation, marketing and technology. For a complete list of NYRS certified agents, see the Leadership Directory at https://members.rebny.com/nyrs_why_hire.jsp.
As our recovery gains momentum, the balance between buyers and sellers is being restored. Halevai. May it be so.