Well I knew that the day would come when a voice on the other end of the phone would say, "We’re in a holding pattern because my bonus wasn’t anything like I thought it would be." That day has indeed arrived as one of my team members informed me that he received just that phone call last week from one of his buyers who was in line to purchase a $2,900,000 property at The Rushmore. This particular buyer was looking at a $2.2M property and based on his bonus expectations increased his budget more than 30%. His expectations were not in line with those of his bank and he and his wife have now decided that 2008 may not be the year for them to buy their dream apartment.
The question that lingers in many of our minds is how many "casualties" like this will we see in 2008? On the flip side of this story are buyers who have received record bonuses but wait patiently to see how the market shakes out in the coming weeks instead of jumping on whatever inventory exists at whatever price. The psychology seems to have shifted significantly from the same period last year when money seemed to be burning holes in people’s pockets and they just couldn’t wait to snap up whatever suitable inventory they could find. This year is different. Although inventory remains incredibly low, buyers are exercising more patience. There are still a plethora of buyers ready, willing and able to purchase a new home but there are many fewer who will settle for simply "suitable" as they appear ready, willing, and able to wait for the "right" home that more completely suits their needs.
For sellers of special properties (ex. Prewar Classic 6, 7, 8, and 9’s), don’t worry! Your homes are exactly those for which these patient buyers wait. Just be smart when you bring them to market and price them attractively to appeal to the broadest pool of buyers. For these sellers and those in the ultra luxury market ($5M+), 2008 should be another solid year for Manhattan real estate.