Frederick Peters, president of Warburg Realty, provides an up to the minute report on our market.
I polled my agents this week-end for their insights into the market and here is what they told me:
· Overall, there is a lot of showing going on. Open Houses are packed week-end after week-end in most locations. Buyers are frustrated at the rate with which new inventory is appearing on the market. Some have even ended up befriending other home shoppers they are encountering at Open Houses week-end after week-end!
· Showing these apartments is one thing, but selling them is another. There is a consensus among Warburg agents that the strong sellers in this environment are mint condition and price. Well priced mint apartments don’t stay on the market long, in any category, and they are frequently selling with multiple offers. Interestingly, the multiple offer phenomenon has spread downward into the 1- and 2-bedroom market, especially where these units are scarce. Several of our buyers have lost 1,000 or 1,500 square foot properties in competitive bidding in Chelsea, Flatiron, the West and Central Village, and the Upper West Side. These are all markets with big demand and little inventory in this size range.
· As a corollary, we are seeing an influx of renters into the first time buyer market at price levels from $500,000 into the multiple millions (although not so much above $5,000,000.) The record low vacancy rates and associated record high prices for rentals make buying, especially with today’s low interest rates, an increasingly attractive alternative.
· Those apartments which are NOT in mint condition or very well priced tend to linger on the market, be they big or small. We see a number of such listings which have been on the market for 45, 50, or even 75 weeks. Buyers tend to offer low these days on anything needing work, no matter how good the bones of these apartments are. And many sellers of these units came onto the market during the mini-boom of April and May of last year, when it seemed, briefly, as if prices were skyrocketing again. Then after Memorial Day they fell rudely back to earth, and for many it has been hard to catch up.
· At the top end of the market trading is brisk. There is VERY little inventory above $6 or $7 million, Nonetheless, the rules of price and condition still apply.
· In general, my agents believe that if a property doesn’t sell in the first month, the most successful strategy is to surgically lower the price. If the market has not responded during those first four critical weeks, it signals a price problem.
· The new condo market moves faster in every way than the co-op market, as foreign buyers compete with new West Coast Google and Facebook millionaires to buy luxurious pied-a-terres here in New York.
· Finally, throughout the marketplace, financing from the Bank of Mom and Dad is ubiquitous. We see more guarantor and co-purchaser situations (not to mention a year or two of maintenance in escrow) than ever before. And in spite of that, and the difficult economy, and the longer sale times, co-op Board turndowns are more frequent and, often, more inexplicable than ever.
The market has never been more nuanced than it is today. Each property type has its own metric and pressure points, as does each neighborhood, and each property size. Navigating these complexities is, more than ever, a full time job.