Signs the NYC Market is Correcting
A: No more bidding wars, no more packed OH's, no more 'NO Finance Contingency' required in contract, and less pressure on buyers.
Just because I am a real estate agent doesn't mean I have to be a salesman and always be bullish on the housing market. I hope the market corrects and I think there are hardcore signs that we have already corrected. If you read my posts you know this by now, but because no one knows of this site I'll repeat this:
WE HAVE ALREADY CORRECTED! THINK LOGICALLY. YOU ONLY KNOW OF A MARKET CORRECTION WHEN IT HAS ALREADY OCCURRED. SO YOU MUST SELL IN A RISING MARKET TO EVER GAIN THE RIGHT TO PROCLAIM " I, ME, SOLD AT THE TOP!"
Now that this is out of the way, lets go over some of the 'in the field' occurences that are proving that we are in the process of a correction.
No More Bidding Wars: The # of people showing up at a standard 2 hour open houses has been increasing as of late, but still not anywhere close to where it was this time last year. Without packed open houses, its hard to convince buyers that you have multiple offers and a 'best & final' set for next Tuesday, 6PM.
No Finance Contingency? Tough To Get: Adding a 'No Finance Contingency' clause to your contract will NOT be an easy task these days. Buyers are hip to this obvious move by the seller in fast-rising markets, but not in slow ones! You can try, but if your buyer puts up a fight don't give up a deal because of it.
Pressures on Sellers: There is an increasing pressure on sellers to use a broker in a slowing market. Getting your property full market coverage and getting your listing in the central system for all brokers to see is absolutely vital! Remember, there are plenty of good leads sitting in the hands of buyer brokers that ONLY bring their clients to your listing if you are offering a commission. Feel free to try on your own, I even wrote a post on it, but reality is you are only marketing your property to about 25% of the buyer pool.
Less Pressure on Buyers: With the fed 'very close' to ending its interest rate hiking campaign, it looks like it will be a good lending environment for buyers for some time. The pressure that rates may be higher if I dont buy now is just not there. I personally think there will be a rate-easing campaign coming in our future (see my post on 5/1 ARM). Also, the psychological pressure that comes from packed open houses is not there. If there are no 'Best & Final' deadlines declared, whats to rush you into placing a bid immediately?
These are the realities of the residential sales industry in Manhattan. Its happening. The data is being collected so that articles can be written about it 3-4 months from now.
MY PREDICTION: Expect a short lived bounce in the NYC housing market over the next few months. However, I really do not think the sales market will be as active as most of us had hoped. For the remainder of 2006, expect a flat to slightly down market.
The Good News: Buyers who have been priced out of the NYC markets for the past year or so should have their eyes peeled for good values. As prices are reduced, buyers will be ready to jump in. So be aggressive; especially if you find an apartment that fits your needs which has been drastically reduced from its original asking price!
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