Five Week Warning: Get Your Home Sold!

A: This is my 5 week warning for all you sellers out there! As we head into the first week of May, its up to you to get your apartments sold! The choice is yours. For all those sellers out there that have legitimate reasons for selling and/or are under some sort of time pressure to sell, strongly consider a price reduction if you have been on the market for 6+ week with no offers! In short, it will be harder to procure as strong of a bid as the NYC housing market transitions from a sellers market back to a buyers market. Here is why.

Things are still sugary for sellers of Manhattan real estate even as the rest of the nation deals with a continuing slowing housing market. In case you forgot what its like outside of New York City real estate, take a look at the latest two datasets regarding foreclosures and existing home sales that were released in the past few days.

Foreclosures Surge on Mortgage Woes -

Foreclosure filings surged during the first quarter of 2007, as home price increases slowed or even reversed and borrowers fell behind on payments once their adjustable rates began resetting at much higher levels.

The number of filings climbed 27 percent in the first quarter compared with the fourth quarter of 2006 and 35 percent from a year earlier, according to a report released Wednesday by RealtyTrac, an online marketer of foreclosure properties.

There were more than 430,000 foreclosure filings nationwide, one for every 264 households.

Home Sales: Worst Drop in 18 Years -

Home sales posted their sharpest drop in 18 years in March, a real estate group said Tuesday, as problems in the subprime mortgage sector pushed sales well below what economists had forecast.

Sales of existing homes fell 8.4 percent to an annual rate of 6.12 million in March from February's 6.68 million rate, the National Association of Realtors said. It was the biggest one-month drop since January 1989. Economists surveyed by Briefing.com had forecast sales would fall to an annual rate of 6.45 million in March.

David Lereah, the Realtors' chief economist, said that bad weather earlier in the year may have cut down on sales that closed in March. "We may be seeing some losses as a result of the subprime fallout," he said in a statement. "It's too early to measure a significant impact from tighter lending standards, which should moderately dampen activity."

The weakness in sales came despite the continued slide in home prices, which had been helping to lift sales in some previous reports. The median home price slipped 0.3 percent to $217,000 from a year earlier, the group said. It was the eighth straight month that measure has fallen and the ninth decline in the last 10 months.

But this is Manhattan! We are the financial Capital of this country, enjoy a growing population, are 75% co-op whose stringent board standards keep speculative activity low, enjoy low rental vacancy rates with rising rents, and whose residents make plenty of dollars! So we are immune right? Wrong.

While New York City real estate is its own animal and cannot be compared with many local markets experiencing plenty of housing pain right now, we are not immune. Our market is seasonal and in terms of real estate cycles, tend to lag in slowdowns and lead in recoveries. That makes our market a much stronger and safer investment. But we are heading towards the slow season and its up to you to believe me or not.

As we head into summer months, expect traffic to slow significantly from levels seen between the months of JAN - APRIL. Slower traffic means less buyer demand which results in more control for the buyer.

Here is my advice to sellers leaving you with the job of placing yourself (if you happen to be selling right now) into the proper category.

Sellers w/ Time Pressure (Must Sell Now) - Don't mess around! If your apartment has been on the market for more than 6 weeks and you have had more than 30 buyers stop by with no offers, you need to lower your asking price! Its not rocket science. If your under a time pressure to sell and must sell now, don't dare risk delaying a price cut for another month or so. DO IT NOW and get your place into contract before June 1st!

Read my post, "My Apartment Won't Sell...Help!" for a more detailed discussion on freshening up a stale listing.

Sellers w/ No Time Pressure (Want To Sell, But In No Rush) - If you fit in this category you really need to ask yourself how much longer you can wait before you close. Keep in mind how long it takes to close under normal circumstances; about 1-2 months for a condo and 2-3 months for a co-op. Deduct the high end of that time line depending on what property type you have and come up with a month that you must be in contract by!

For example, if you own a condo and MUST close by September 1st, than plan on having a signed contract by July 1st the latest! That leaves 2 months (July & August) to close by your deadline and you better keep on your agent to make sure the buyer abides by this and completes the purchase application and loan process in a timely manner.

Since you have some time you can certainly hold off on a price cut, but keep in mind your chances of getting the highest bid will be over the next 5 weeks; before the summer months. Once June 1st hits, chances are that the drop off in demand will yield a less aggressive bidder.

Sellers Testing The Market (Have A Great Product & Waiting For Your Price) - Well if you are testing the market than you know you are priced high and waiting to see if someone will fall in love with something about your apartment and pay up! If its been over 8+ weeks with no bids near your desired price, it is probably too far out of whack.

If you got bids close to your desired price but just a little off, you may want to re-think how much you want to sell. Why are you even testing the market to begin with? Read my post titled, "To Sell or Not To Sell" and see if any of the reasons listed match your situation.

In short, if you haven't gotten your price yet, chances are you wont get it during the summer months! So, consider either a price cut to the desired price that you want to sell at or remove the listing altogether from the market and put it back on the market next wall street bonus season.

UrbanDigs Says - The NYC real estate market is still strong! With stocks soaring via strong corporate profits, the economy strong, jobs healthy, salary's high, rental vacancy low, rent prices trickling higher, and buyer demand holding you still have a chance to get a great price on your new home! Investigate your building for comparable sales and repeat the analysis with your broker to see if you are priced high, and if so, how high are you? In the end, the market dictates the purchase price of your home, not the agent, and its up to you to wake up from reality that your home may not be worth as much as you first thought. Question is, do you wake up to this reality today and do something about it while its still a sellers market? Or do you delay, and realize in 6 weeks when it most likely will transition back to a buyers market?

Remember, an agent being honest with you and passing on advice based on past experience selling in the Manhattan marketplace is an agent doing his best to get his/her client the highest price possible! Don't get mad at your agent if they recommend a price cut to you after weeks on the market; in the end, their job is to procure a qualified buyer at or slightly above market value if possible. Asking your agent to fetch you $100,000 more than the last comparable sale in your building is like asking your stock broker to buy a stock today significantly below what it currently trades at! If the stock broker says "sure, no problem", then they are lying to you!

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