As debates take place among the nation’s leading economists as to the health of our economy and the housing markets (plural because they are local), the anxiety here in Manhattan continues to rear its ugly head. All parties involved in the residential real estate transaction are experiencing a greater level of anxiety than I have seen in my 16 years in the industry. This is a huge change from the Manhattan housing market of the past decade where most anxiety was felt exclusively by buyers and their agents with the occasional seller frazzled with the decision as to which prospective purchaser they should choose. Times they are a changin’!
Of course most of what I share here on TrueGotham is anecdotal but I also make every effort to garner feedback from friends, family and colleagues regarding their personal experiences in the housing market. Here is what I’m seeing in today’s ultra anxious and confusing housing market and exactly how it is frustrating and confusing each party in the real estate transaction:
- Almost overnight and due to tighter lending standards, many buyers have decided that a mortgage contingency is a must in any sales contract. A 14 day contingency as opposed to the standard 30 days seems to be becoming the norm.
- Media reports of low-ball offers paired with those of multiple bids are making this market as confusing as ever and feeding the anxiety that often comes along with bidding on a home.
- Many buyers haven’t spoken with a bank or mortgage professional before bidding on property only to find out that they aren’t as qualified to purchase a home as they once were.
- Unless they are fortunate enough to have multiple bidders for their property, which is still happening quite a bit in Manhattan, sellers are being asked to consider financing contingencies in contracts.
- Some sellers have even been asked to accept contingencies on the sale of a purchaser’s current apartment. ATTN BUYERS: This isn’t happening…yet.
- Many buyers are getting cold feet and changing their minds in the 11th hour when it comes time to sign a contract.
- Many attorneys for buyers are advising clients against signing contracts without financing contingencies.
- Many attorneys for sellers are finding themselves sending out multiple contracts as fewer deals make it to the signing table.
- As Manhattan buyers believe they have more leverage than in the past (not necessarily true), both buyer’s and seller’s attorneys are working more diligently in negotiating contracts to balance the give and take that is more frequent in today’s market.
- AGENTS: (I know many of you out there love to hear about real estate agent grief…so here ya go!)
- No deal seems easy. A quote from one of the most successful agents in Manhattan, "It’s really hard out there right now!"
- Some properties sell quickly and others languish…we actually have to work to make money…go figure.
- Navigating inventory and making sense of pricing has been incredibly challenging as struggling and desperate agents tell sellers what they want to hear in an effort to procure the exclusive right to sell their property.
- The number of agents has risen to astronomical numbers while inventory remains ridiculously low…something has to give and I suspect we will see a thinning of the ranks in the near future…I can hope can’t I?
And that’s what I’m seeing. Need to get back to the trenches, it’s brutal out there.