The residential sales market traditionally heats up after Labor Day, and because this year our Summer selling season was just as active as Fall usually is, firms are gearing up for a wild ride.
We interviewed four NYC real estate experts to get the lowdown on what buyers, sellers and agents can expect.
- Michael Signet, Executive Director of Sales, BOND New York
- Susan Abrams, Senior Managing Director, Warburg Realty
- Edan Pinkas , Friedberg Pinkas PLLC
- Douglas Heddings, President, Heddings Property Group
What should an agent, buyer and seller be doing to prep for Fall?
Signet: Fall is typically the busiest time of year. Agent preparation would include doing extra networking and more marketing, such as soliciting buildings they’ve done business in before and sending out line letters for the buyers that have not found their dream home yet. Sellers should take some time this summer to stage their apartment, put a fresh coat of paint on the walls and get rid of any clutter they may have.
Abrams: Sellers should use the summer to wash windows and make any necessary repairs to their property and they should also have a conversation with their accountant and attorney about closing costs and taxes incurred in connection with a sale. Buyers should interview and select a buyer’s broker. A good broker will help a buyer navigate the process, understand the nuances in neighborhoods, price ranges, pre-wars, post-wars, co-ops and condominiums and prepare a buyer for the condo or co-op board application process. A buyer should also pre-qualify for a loan and have their financial information in order. Agents should be thinking about what properties will be coming on the market in the Fall, what new developments are coming to market and what properties that have lingered on the market may be ripe for negotiations and price reductions.
Heddings: My best advice to everyone regarding the early fall market is that it is never as active as people anticipate it to be. In NYC, summer continues through September and combined with the Jewish holidays it generally means that inventory doesn’t pick up until mid-October. Likewise, the number of buyers doesn’t increase until about the same time.
What do you expect for Fall in terms of sales?
Signet: We normally expect the Fall season to be the busiest of the year. As sellers return from summer vacation, more inventory comes to market, which in turn brings out more buyers that have run out of things to see and have been waiting. This year I expect the Fall selling season to be all of this but on steroids. We have predicted that there are currently six real buyers for every property and the multiple bid scenarios that have become common place prove this prediction. So, as more and more home owners that have been watching prices rise decide that now is a good time to cash out, more inventory will appear and more deals will get done.
Pinkas: I expect all facets of the real estate market (both the high-end market and regular market) to pick up where it left off in July and to really pick up steam. This will lead to many people trying to close before year end.
Abrams: Inventory is at historic lows, especially in the two and three bedroom markets. As such prices will continue to be steady and may even rise due to low inventory in many sub markets. Properties that are priced right will experience competitive bidding.
Heddings: The Fall should be interesting based on what the economy is looking like and where mortgage rates are at the time. Any significant pop in rates will create even more of a buying frenzy (it always does) and with inventory still low we could see further price appreciation. If there is no viable threat of rates rising, the market will remain on an upward trajectory due to the continued inventory shortage.
What factors are coming into play when getting sales done this autumn?
Signet: The rules and procedures don’t change from season to season. Buyers need to have their pre- approval letters ready, their financial statements filled out and their real estate attorney in place.
Sellers, on the other hand, need to price their property correctly. Even though the market is hot, buyers are more educated now than ever and overpriced property will just sit and get stale.
Pinkas: Now that summer is over and people are back from vacation I expect contracts and closing to start happening at a faster clip.
Abrams: The biggest challenge in the fall will be inventory, especially in certain markets. Most of the new construction coming to market is serving the very high-end of the market. The very wealthy seeking new construction will have more options. It will continue to be a challenge to find properties in the $1-4 million dollar range that meet buyers’ requirements.
Heddings: DUCKS IN A ROW! To compete in the Fall market, buyers will have to make sure that they can present a clear, accurate and positive picture of their finances including pre-approval for a mortgage when submitting a bid. Sellers need to work with someone who has a reputation for solid and accurate pricing strategy.
What neighborhoods may have the most and least sales traffic and why?
Signet: The most sales happen where there is the most inventory, so right now: Upper East Side, Midtown East, Midtown West and Chelsea. Trendier neighborhoods such as Soho, Tribeca and the West Village where there is very limited inventory will see the biggest spike in prices, but the fewest number of transactions.
Pinkas: I think areas that do not have much new development or conversion going on will stall slightly in sales traffic and one such neighborhood is the East Village.
Abrams: Today almost all neighborhoods are desirable. Traffic is strong on the Upper East Side, Upper West Side, all over downtown, Harlem, prime Brownstone Brooklyn and Williamsburg. The fact that homes are priced at $1.5 million in Bedford Stuyvesant is proof that neighborhood boundaries have virtually disappeared.
Due to the construction of the Second Avenue Subway, sales traffic is not as brisk along York, First and Second Avenue. However, the neighborhood is changing. The Second Avenue subway is bringing transportation and an influx of new and interesting retail to the area. This location is one to watch and I predict home prices will increase.
Heddings: The Upper West Side should remain consistently sought-after because of the demographics, proximity to parks, schools and transportation. I doubt we will see any immediate stalls in sales anywhere barring a spike in interest rates or a major political or world event.