If you’re one of the few sellers out there who has such a uniquely special (is that redundant?) property to bring to market, then this post isn’t for you because "special" properties that are priced right continue to be snapped up as quickly as they hit the market. But for the rest of you, patience is perhaps the most important quality that you must exhibit in today’s bizarre Manhattan real estate marketplace. There are several factors that have changed the pace of transactions today:
- Mortgage Market has Thinned Buying Pool-Many who believe that they are perfectly well qualified for a mortgage are in for a rude awakening. Tightened lending standards are effecting many who would have easily afforded a home this time last year. We recently had a established and respected reconstructive plastic surgeon denied for a mortgage on a sub-$1M property based on his student loan debt and credit score in the mid 600’s…last year he could have gotten 90% financing…NOT NOW.
- Market Analysis is More Sophisticated- Each micro-market behaves differently and I have said it a multitude of times before but now more than ever do I see very distinct differences in the behavior of Manhattan’s micro-markets. Apartment size, style, and geographical location serve to divide Manhattan real estate into markets that shift and act independently of one another. When pricing, don’t compare your Upper West Side Classic 7 on a price per sf basis to post war 3BR apartments…they are different markets.
- Your Market Determines Movement in Inventory-The owner of a 4BR condo with spectacular views on the Upper West Side is much more in the cat-bird seat than the owner of the cookie cutter 1BR on the Upper East Side. Overall inventory numbers are meaningless…if you own a Prewar 2BR in a specific area, ask your agent to track inventory specifically with those parameters.
- Buyers are Both Anxious and Cautious-No one wants to think that they are buying at the absolute peak of the market and at the same time they are reading daily media reports of how awful the "housing market" is performing. The mixed messages that buyers are receiving are confusing and make the decision of whether or not to buy a home much more challenging than in the recent past. Sellers should expect buyers with cold feet these days and deals to dissipate during the process before finding the ‘right" buyer.
- Sellers are Nervous-Trust your real estate agent regarding price. Many sellers are eager to reduce prices these days because they haven’t yet received a bid. When I started in this business in 1992, properties were often on the market for 2 years or more (we’re not there) and if price reductions were the only answer, we would have been giving places away. That said, often times, a price adjustment is necessary. if so, make it count. Reduce the price significantly enough (10% or more if possible) to resuscitate the property.
Overall, the Manhattan real estate market has changed drastically from the days of multiple bids on every property that hit the market. That said, those properties with incredible views, layouts, outdoor space or other unique features are still garnering a plethora of interest. The rest will also sell…it may just take longer than you had planned.