The current Manhattan residential real estate market couldn’t possibly be more confusing. I’m not just talking about buyers either. All the players in the game are trying to make some sense of the market as a whole. Here’s what I’m seeing that is making the heads spin of buyers, sellers, bankers, appraisers, real estate agents, and attorneys:
- No rhyme or reason to pricing: It has become increasingly more difficult to compare properties in today’s market place as sellers and their agents all have different perspectives of where the market is and where it is going. Prices are all over the map with some properties priced higher than they would have been last summer and others priced as much as 40% below last summer’s values.
- Perception of "value" varies: Each buyer is coming to the table with their own perception of what value would be in today’s market. Some appreciate a well priced home and others continue to shake their heads with confusion not being able to make sense of or compare the 10 or so properties that they have viewed.
- Uncertainty over market direction: No one can deny that the market has declined significantly and it remains challenging at best to determine if and how much further prices will drop before we see a stabilization.
- Confused agents unintentionally hindering the transaction process: There is no doubt that real estate agents want to sell the property that they represent. That said, in trying to make sense of current market conditions, the advice to be patient can often bite us in the behind later in the process. It is a fact that more often than not, the best offers come early in the marketing process so when an agent advises a seller to not counter an offer in an effort to keep dialogue going, they could very well be doing that seller a major disservice. If an asking price is off the charts, an offer of 20-30% below should be countered IMHO.
- Seller motivation varies: We still have sellers out there who insist they "don’t have to move" and are willing to be patient in waiting for "their price." The problem is that the buyers are also waiting for "their price" which is causing a bit of a stalemate in many cases. No seller wants to be perceived as desperate and no buyer wants to feel that they have over-paid in a soft market.
These are just some of the factors that are contributing to the confusion that is today’s Manhattan real estate market. Making sense of it is no easy task and requires a greater commitment to diligence and research than I have seen in my 17 years selling Manhattan real estate.