What To Expect Heading Into Summer

Posted by urbandigs

Tue Feb 27th, 2007 12:25 PM

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A: Just a quick thought I want to pass on to you as so many of my clients and new buyers emailing me are wondering what to do. Here are my thoughts based on my experience and what I see now.



Frenzy Will Last Until May - There is a plethora (thats right El Guapo) of buyers right now looking to buy a new home in Manhattan. Open houses are packed and bidding wars are becoming a common tale. If you are an active buyer, I don't need to tell you this. The good news is that this surge in activity usually comes at this time of the year and never lasts forever. I expect another 2-3 months to work out this surge in demand. During this time, prices will stay towards the higher end for new products hitting the market and sellers will remain tight with their negotiations.

Inventory is Tight / Getting Tighter - I am finding it very hard to locate good products that meet my buyer clients needs. When I do, they don't last long. When we submit a bid, I get a phone call from the broker that tells me "...we have multiple bids in. I'm expecting a best & final situation shortly". If you are forced to buy in the next month or so, get on the ball and see every property that meets your needs ASAP!

I expect inventory levels to shrink in NYC as new reports come out in the coming months. If you can wait for the frenzy to die down, great. However you will most likely sacrifice having as many options as you see now to choose from. With so many buyers out there, I just don't see how inventory levels can rise from this point on. Expect a tight market heading into the summer!

Manhattan Real Estate Sales Will Surge - Since real estate reports are lagging and come out AFTER the deals are done, expect to see very bullish reports on the Manhattan real estate market in the coming months.

More specifically, JAN - present has been VERY active to say the least with many property's going into bidding wars. As a result, this will lead to strong data reports on NYC housing as we head closer to summertime which no doubt will intrigue the mass media into a number of articles about a market turnaround. The psychological effect of this positive media might lead to some strength in the beginning of the normally slow summer.

My advice remains the same as I noted back in January when it all began:

AS A BUYER - Don't try to low-ball or wait out a housing downturn if you plan on signing a contract in the next 1-3 months! If you do, you will NOT get the response you hope for as the seller's broker most definitely is reporting the rise in activity to their client. If you choose to wait until March or so you may not find the inventory as attractive as it is today. If all this buyer activity results in what I expect it to, you will later on see sales volume come in very strong during the months of January & February, removing a lot of unsold inventory that has built up over the past few months.

AS A SELLER - No one can tell you when to sell your home. That is your call. But, if you have been planning on selling your home in the next 3-6 months, it might be worthwhile to get it ACTIVE NOW and get in on some of this action! You may even be able to price slightly higher than you were original thinking to test out the market, as it is times like these (that is, a surge in buyer demand) where sellers get their price or more a good percentage of the time. Don't overprice tremendously unless you have a huge terrace, incredible views, or an unbelievable renovation (although the first two are the best reasons for pricing higher as I'm not convinced buyers will pay top dollar for a very high end renovation job).