A colleague of mine recently received a phone call from a seller whom he is representing with a disturbing question. His home is currently in contract with a prospective purchaser and he asked, "Should I reach out to my co-op board and ask them to turn down this buyer?" For those outside of Manhattan, 75% of NYC housing is co-operative in which a Board of Directors must approve any prospective owner/shareholder.
My guess is that the impetus for this question is the plethora of media reports that we have reached the "bottom" of the housing market. These reports are also laced with hopeful pearls that we may be nearing a recovery. Yes we indeed had a very busy month of June and July here in the Manhattan real estate market after a sluggish start to 2009. That said, volume is still half of what it was same time last year.
This particular seller is not unlike many in today’s real estate market place who are reeling from the pain of selling their homes at a significantly lower price than what they paid just 3, 2 or even 1 short year ago. I get it as I wanted to sell my family’s 3BR condo in the Spring of 2008 when I would have likely received more than 20% more than what I could sell our home for today. I was fortunate enough to not have to sell and since I would have likely invested the equity aggressively in the stock market, it was probably a wise decision.
Another seller of mine called last week expressing the desire to sell the apartment that he bought 2 years ago because he is spending less time in the city than he was in the past. His response to my pricing opinion was a very simple "ouch!"
For each of these sellers, the decisions they made to sell their homes in a softer real estate market were born from motivations specific to each of them. Both have left Manhattan for housing markets that are more greatly depressed and although the sell/buy trade from Manhattan to their new more rural locations seems like a win, the sting of losing hundreds of thousands of dollars in just 2 short years is numbing. But both are forging ahead and continuing on with their lives.
Of the 14 transactions on which I am currently working, 7 of those sellers are leaving the city for housing markets in which they can parlay their Manhattan dollars into a palace. Hopefully that palace will take away some of the pain of their recent NYC real estate losses. As for the others, they are moving from one part of the island to another in an effort to swap neighborhoods and capitalize on the reduction in prices.