Market Report: Well Priced = Action
A: Sounds so easy right! Well after a busy Presidents Day weekend full of appointments and open houses, I will tell you this: properties that are priced right compared to recent in-building trades are very active! Specifically, the two bedroom market where there seems to be two different types of sellers; 'realistic ones' & 'testing the market' ones. Meanwhile, I feel like the two bedroom market is starting to show some options for buyers. Overall, its refreshing to see bonus season behave like bonus season.
The good news is that even with all the macro concerns & credit crunch, buyers are still out there in full force looking at properties to sink their $$$ into. Readers of this site know my feelings about buyers and the important role they play in any local housing market. In my opinion, buyers are everything and their confidence is the only gauge we have to see where the herd may be heading! Right now, plenty of buyers are out there actively viewing properties with some degree of drop in confidence; confidence varies depending on unique situation & views on the markets.
What a fabulous thing for Manhattan sellers that other markets would love to have! Outside Manhattan, many markets are experiencing surging inventories, fierce seller competition, and a total lack of buyer demand. Here in Manhattan, I see inventory slowly rising the past few months, a lack of fierce seller competition, and plenty of buyers aware of the economic concerns that are going on.
What does it all mean? It means these buyers are willing to put their dollars to work IF the property is priced correctly! It also means that they are hesitant to pay a significant appreciation premium compared to similar deals closed in 2007! Knowing this important piece of market information about the buyers allows me to conclude this tip for sellers: price your property right, and you will get action!
I was mostly out looking at the two bedroom market in midtown east & the upper east side. What I saw validates what I discussed above. Two bedrooms, ranging from 1150 sft - 1300 sft, priced in the 1.15 - 1.3M range had strong open houses. Meanwhile, similar two bedrooms with nothing extra to offer buyers priced above this range, were slow. As I normally do after seeing a bunch of units over the course of a weekend, I called Toes to see how her showings went and to get a sense of her opinions on the market in general. When she confirmed exactly what I saw, I knew it was accurate enough of an update to post here:
According to Toes:
Open houses this weekend in the $375K - $800K range were packed, despite the holiday weekend. The first time buyer is out there in full effect. Instead of seeing 10 - 15 properties as they may have in the past two or three years, they are looking at 30+ apartments and really taking their time to find the best deal. There is no sense of urgency, but still, the best properties are selling right away and there are still multiple offers generating bidding wars. I think the best strategy in this market is to price at or below market value and sell the apartment within the first 2 - 3 open houses. If something is on the market longer than that, buyers will low-ball.The key takeaway from this update for serious sellers should be to avoid greed and use common sense when interviewing agents to possibly work with! Price your property accurately based on in-building trades, your unique apartment features, light/views and to a lesser extent, active comparables.
I've heard from two other agents that their 2 bed 2 bath listings are really slow, they only had three or four people at their listings (in the $1.4M - $1.6M range). In the first three open houses, one of my colleagues has had only 10 buyers. In the past there was a shortage of 2 bedroom, 2 baths, but it seems as if the pendulum may have swung the other way, and now there is an oversupply of inventory. Pricing is key. Look at the competition on the market and make sure you are one of the best priced properties out there or the apartment is going to sit on the market. The longer it sits, the more likely you are going to have to accept a low offer.
Its a well known trick in this business to promise a very high sales price to win the listing from fellow competition (the market dictates what your home is worth, NOT the agent!), try to get buyer clients in the meantime, and work on a price reduction 1-2 months later. Don't fall prey to one of the oldest tricks in the book!