If you’re a seller with a property currently on the market or you’re thinking of selling anytime soon, it’s imperative that you listen to the market and pay close attention to current buyer psychology.
This morning I received an email from one of my Wall Street buying couples with a subject line that read, "hopefully this will help us negotiate!" The article from this morning’s Wall Street Journal titled They’ll Take Manhattan — For Less-No Longer Immune, Sales and Prices Slip; Waiting for Bonus Time is just the type of press that is fueling buyer anxiety and adding to a market that is already seeing multiple stalemates between unrealistic sellers and overly pessimistic buyers.
This is just the type of press that most sellers will choose to ignore and most buyers will over analyze in their own favor. But even this article has some contradictions (see the bold points) For example, here are some comments/quotes taking directly from this piece:
- Fewer apartments are being sold — 858 went into contract in September, a 9.9% drop from a year ago and the lowest total in two years, according to brokerage Corcoran Group
- inventory of unsold apartments is increasing.
- Prices are also leveling off. The median price of a Manhattan apartment fell 3.4% in the third quarter from the previous one, according to the research firm Radar Logic.
- The firm says properties are sitting on the market longer, too, an average of 123 days, up from 94 days at the peak of the market in 2005.
- Developers used to seeing yet-to-be-built apartments get snapped up sight-unseen are increasingly offering incentives, from help with closing costs to museum memberships, to jump-start sales.
- "Buyers are more hesitant," says Hall Willkie, president of brokerage Brown Harris Stevens.
- Trouble in the financial sector will hurt home sales, says Nouriel Roubini.
- Christopher Mayer, a Columbia University professor and director of the school’s Paul Milstein Center for Real Estate, says the idea that Manhattan will continue to boom amid a nationwide housing bust is "wishful thinking."
- Some buyers are already finding bargains.
- "We’re getting this apartment for probably 2004 pricing"
- …some New York brokers and potential sellers are growing nervous. So far this quarter, 1,473 sales have been recorded in Manhattan compared with 4,337 for the entire quarter last year, according to Gregory Heym, chief economist for Terra Holdings, which owns brokerages Brown Harris Stevens and Halstead Property. Many sales negotiated earlier in the quarter haven’t closed yet, but with December usually a slow month, Mr. Heym says there will almost certainly be fewer sales this quarter than last.
- In October, the Office of Management and Budget cut its projected revenue from property transfers by $82 million, a 5.9% drop from its original forecast. (The figure includes revenue from both commercial and residential sales.)
- Supply, however, is increasing.
- New developments have begun to offer incentives to attract buyers .
- The number of price cuts, at all levels of the market, is also growing.
- The average sales price of a co-op fell 2.8% to $1.12 million in third quarter of 2007, compared with the second quarter, according to Radar Logic.
- …but prices downtown have fallen 18%, to $1.1 million, according to Terra Holdings.
- In recent months, the continuing strength of its (Manhattan) real-estate market has drawn even more attention, and led many local real-estate professionals to contend that Manhattan is immune to the forces that have battered much of the rest of the country.
- Prices remain near record levels.
- The median price of a Manhattan apartment is $864,397, up 2.3% from a year ago.
- The weak dollar has led to increased interest from abroad.
- Some brokers say they haven’t seen a drop-off at all. Pamela Liebman, chief executive of Corcoran Group, says the brokerage is on pace for a record year and says that after a September slowdown, October showed an increase in sales. Jacqueline Urgo, president of the national real-estate firm The Marketing Directors, says sales in most of the company’s Manhattan properties improved in mid-September after a brief lull. Even many brokers who have seen a falloff say the shift says less about the current market than the frenzied one that preceded it. "We’re just seeing the market return to normal," says John Burger, a broker at Brown Harris Stevens.
- So far this quarter, the average price on the Upper East Side has risen 11% to $1.7 million
- …listed their pied-à-terre on East 28th Street for $495,000 in May. They quickly accepted an offer for $480,000, but their co-op board rejected the buyer. (It’s still on the market for $450,000)
From the looks of all of this data it appears that the market is tipping in favor of buyers. I’m still not seeing that entirely…yet but I am seeing a much more patient buyer which is bringing some anxiety to some sellers. Yes I said SELLER ANXIETY…touche to all of you buyers. This I haven’t seen in a decade and I’m going on the record right now and saying again that sellers would be wise to listen to their respective markets and not be so quick to turn down reasonable offers or they may indeed find themselves getting bitten in the asking price!