We are due for a break-out year. It should indeed be busy, but not like the frenzied years of the mid-teens. The game seemingly began in September and it feels like the bottom-half of the first inning, with lots of game yet to be played.
Ever since interest rates decoupled from the fantasy decade of low rates (essentially 2012-2022) and began to rise some 36 months ago, we have seen below than average deal volume. But it’s important to note, that this does not mean demand is low; it’s actually the opposite. One tenet which is for certain, demand in Manhattan is always strong; it’s just a matter of price.
Life is a funny thing, it happens and people need to move; this is a constant force that does not ebb and has had nowhere to release itself for years now….the demand is pent-up.
The bigger issue, more so than mortgage rates*, is supply. Although rising, from a seasonal perspective, it remains below past years’ levels, particularly since the spike in rates began, 3 years ago. This is the real reason for the muted deal volume.
Serious buyers have already accepted the new normal of “real” mortgage rates*. Since September, sentiment has noticeably improved, open house traffic is up, mortgage brokers are experiencing increased requests from buyers to get pre-approved and offers are being made.
Listing Success
Because Manhattan is heavily weighted towards users (not investors), it is a longer term play. Those who are active in the marketplace understand this and recognize that we are likely at the beginnings of a multiple year run of escalating prices. Tight inventory, growing acceptance of the current market dynamics and an eventual easing of rates will create intense competition and therefore rising prices. Buying now will be far more affordable than buying in 1, 3, 5 years from now.
The Mis-Pricing Penalty
Sellers, when properties are priced correctly they sell efficiently; conversely those that miss their mark are penalized. Orchestrating a successful sale experience requires thoughtful preparation and timing. You want to price sharply to value; generating multiple interest and possibly a bidding situation is ideal. If you are getting showings but no second showings or offers, then you are priced high. If you are not getting showings or even inquiries, then you are grossly overpriced.
I always say: 1) 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/investment property out there for them; and 2) Who represents you matters…your best investment is often in the broker you choose; find someone with experience, who you feel you can trust.
