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Quo Vadis?…What now? With so many potential meanings, how does this phrase apply to you personally right now?…Just something to think about.
Regarding the Manhattan market, let’s just dive in. We are a bit behind last year’s contract volume, but we are trending up. The discounts are “typically” coming in between 5-10%. In rare instances we are seeing higher percentage discounts; but these are generally isolated to the luxury sector and accompany some unknown back-story or the property was grossly overpriced to begin with. Remember, these discounts are averages; handfuls of good and well-priced properties are still experiencing multiple bid situations, several (few) seemingly settling at or above the asking price.
Everything in Manhattan is a micro-market; it is segmented into many different categories and each has its unique behavior and must be analyzed accordingly. Pricing is the key; if sellers are too aspirational on price, not only will they not get offers, they may not even get inquiries. Well priced properties will sell. With little data available, the challenge is identifying the pricing level in each case. The market must be analyzed from innumerable angles, accumulating every possible metric and nuance we can glean from our industry colleagues. This also means, find yourself a good broker who understands how to extrapolate this information from the marketplace.
The pricing myth will resolve itself in time. As more closings occur, valuations become more clear. The dislocation between buyers and sellers will narrow. Sellers feel the discounts should be closer to 2-3% rather than the 7-8%-ish mentioned. Every buyer wants the deal of the century; however, that is unlikely to happen. EVERY purchase right now is a deal; the market had already been sliding for nearly five years when Covid hit. If we pull back and look at the metrics, this is the most favorable time to purchase in my entire 22 year career. Interest rates are as low as I can remember, inventory is equal to the highest I can remember, negotiability is higher than I can remember, sentiment is as poor as I can remember (but optimism is filtering in, evidenced by the numbers of people jumping in…seeing the long-game for NYC ), sellers are more anxious (frankly nervous) than I can remember….the list goes on and on. Many buyers miss the plot; they become more focused on finding that outstanding deal, as opposed to focusing on acquiring that outstanding property. The too often neglected truth is that outstanding properties do not experience fire sales.
For those seeking to make a move, whether buying or selling, they must seriously consider the current circumstances. If you’re a seller and don’t have to sell right now and can wait, wait. However, if you are looking to upgrade, you will most certainly win. You may lose a small percentage on your sale, but you will earn an even higher discount on your larger purchase. This results in a substantial net gain. If you are a buyer, consider that our marketplace is virtually at rock bottom, five years of decline followed by the pandemic. Further consider that all of the robust activity we have recently witnessed has been purely driven by domestic purchasers. Imagine when the borders open up and foreign buyer demand comes in again. The simple supply and demand principle will prevail; more demand will put upward pressure on pricing. Question: will interest rates remain low? Maybe…but what if they don’t? We don’t have the answers to that. So since the getting is good, I would get-to-it before this mirage disappears. It’s these times of dislocation where people can make moves not otherwise possible. Manhattan is a better value now than ever before. Some have gone away, finally providing others, who want to be here, the opportunity to fill the void and they will do so at a market-low. The next several months will be like “the rocky road to Dublin” as my Super likes to say, but in the end, Manhattan will come out ahead. Not just my prediction…look around, you can feel it. New Yorkers know what I am talking about. So get your piece of the apple and I’ll see you in the neighborhood!!
Speaking of apples reminds me of an interesting analogy. When going to an orchard and looking for apples, it looks ample at first…so many to choose from, just like our marketplace now, lots of inventory. However, after close inspection, you begin to realize that most of “the good ones” have been taken….or at the very least, they’re getting a lot of attention and won’t be around forever.
Click the button above to see the latest edition of our post-lockdown deals report, as of 9/29/20. The purpose of the report is to give you verified pricing data on deals negotiated after the NYS lockdown began on March 22nd. This is not meant to be a count of deals signed since the lockdown, as many of those haven’t closed yet.
To be included, a sale must meet all the following criteria:
1) Listed through the RLS, by all firms.
2) Have a contract signed after March 22, 2020
3) Closed and recorded on ACRIS
The spreadsheet, accessible through the above link, is a running total we add to each week. Keep in mind some sales may drop off if we find out the contract signed date was incorrect. Be sure to click on the respective tabs for each borough at the bottom of the document.
Below is a comparison of the data in this report to the same period last year:
Roberto Cabrera
Licensed Real Estate Broker
Brown Harris Stevens
212.906.0554
Your City, Your Broker…
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