New York State of Mind
In January, the New York Department of Finance reported that, for the first time in history, the total property value for New York City has risen over the trillion-dollar mark. Manhattan’s surging market combined with an incredible construction pace in Brooklyn and Queens brought total market value of taxable property to $1.072 trillion, a more than 10 percent increase for the 2017 fiscal year.
These types of numbers do and will encourage the average seller of an averaged priced property in Manhattan (which happens to be about $1.75 million, by the way) to price his or her apartment as if they were solely responsible for launching property values over the trillion-dollar mark. Sellers must, instead, do themselves a favor, and unburden themselves from this temptation. More and more, the pendulum seems to be swinging to the buyer side as the market adjusts itself after a rough start to the year.
I had Barry Weidenbaum, partner at real estate law firm Weidenbaum & Harari, in to speak to the team recently, and he shared what he is seeing in the market. His outlook is, of course, very different from a real estate professional's point of view, but a real estate attorney's perspectives is valuable and can shed light on an ever-changing market, enabling us to adjust quickly and nimbly, before the market does it without us. He stated that, while in 2015 the NON-mortgage contingency was commonplace in deals, the mortgage contingency is being found in deal contracts more and more as 2016 unfolds. Sellers accepting mortgage contingency could be the begging signs of a shift in the market from seller to buyer. Of course, no one knows for sure, but we are all noticing a slower super-luxury market, which is now starting to affect the luxury market (properties valued at over $3 million). The $1 to $3 million category is still strong, but you better price your two-bedroom correctly in the market.
I visited an owner last week who put his two-bedroom co-op on the market in Lenox Hill matching the lowest priced listing on the market at the time, rather than trying to price the home too high. The bulk of the 40-plus two-bedroom, two-bathroom homes at the time were priced between $1.5 million and $1.6 million, but by positioning his property at such a compelling number — knowing that his layout, finishes and overall quality were on par with his $1.5 to $1.6 million competitors — he knew the market would have a huge reaction to his listing. And it did: He received seven offers the first weekend, and by the time the second open house was finished, he had 11 more offers — three more than expected. From these 14 to 15 offers, the seller brought pendulum back to his side of the market. He accepted a NON-contingent offer over the $1.55-million mark, and he controlled his own destiny.
The lesson? Stay ahead of the market and make the market react to you. It’s the best way to move property in the current market. And, if you're a buyer, remember, there are 39 other properties in Lenox Hill that aren't receiving much interest and have nervous owners ready to strike a contingent deal with you.
Park Slope, Williamsburg and Beverly Hills offices have officially opened! Making that 19 offices coast to coast.
Opening soon in Aspen
The Compass Quarterly is here