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At least that is what we are being told by the media outlets…and…well, the data does support it. That said, and as you can anticipate, that is not the full story. Remember, current market data is a lagging indicator of sales activity which transpired months ago, typically between 3-4 months prior. When that data is down, boy does the media love to sensationalize it. So the sky has fallen so-to-speak, but now we are getting to survey some of the wreckage and identify actual value and, more importantly, deals.
The media is currently reporting on horrific Q3 results, contrasting it with a near record-setting June which completed Q2. In April, it was announced that higher Mansion and Transfer Taxes would be levied on both buyers and sellers who closed after June 30th. This potentially costly deadline accelerated an overwhelming number of sales forward, sales that would have otherwise naturally closed in Q3. So in essence, Q2 took Q3’s thunder, a quarter that is historically the slowest of the year anyway. So what transpired has skewed the numbers and created an opportunity for provocative headlines in the papers.
Activity has been moderate thus far in Q3, but the market traffic of buyers generally picks-up after the Jewish holidays, a notorious speed-bump in the Fall market momentum. More offers are being made and increasing numbers of sellers are capitulating, hence establishing a new normal…to be revealed later. As mentioned, today’s activity will be tomorrow’s numbers, a lagging indicator not to be realized until probably Q1 of 2020. Those numbers will become facts/data that new sellers will not be able to deny. The resulting gap between bid and ask will narrow, creating a more favorable environment to fairly negotiate among themselves. More deals will improve sentiment and encourage those on the sidelines to get in; they won’t want to miss out. This is primarily true for resales, especially coops. The multiplicity of new condo construction inventory is another thing, and it keeps growing.
With interest rates so low (the 30 year fixed has dipped to 3.25%), we are likely seeing the market flatten, with the downward slide pausing, if not changing direction. Also, luxury rental numbers have been on the rise, making an already favorable buying market that m uch more attractive. Again, as successful real estate investor and author of the new book “I Can I Will I Must,” Alan Schnurman wrote, “When you’re crying, you should be buying. Real estate is basic economics. Buy when there is more supply than demand. Sell when there is more demand than supply.
QUESTION:
Are you prepared to dive in? You should always know what you are in a position to buy or sell at all times. If you don’t know, reacquaint yourself with the marketplace. What is your property worth? What can you afford to buy? Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there’s a home or investment property out there for them.
Roberto Cabrera
Licensed Real Estate Broker
Brown Harris Stevens
212.906.0554
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