The real estate market is changing all the time. We're constantly asked "how's the market?" It depends on who you ask and what you’re asking. I don't sell new developments for the most part, so I can't speak to that aspect of the market. Based on my recent experience, and based on conversations I’ve had with dozens of other brokers, I’ve come to a few conclusions.
If you have a special apt (and by “special”, I don’t mean your living room faces a brick wall. On the first floor) then you’ll be fine as long as it’s still priced well. A gorgeous, river facing apt on RSD and 114th street just went into contract for over the asking price of $2.3 after a few days on the market. I think it was priced pretty low to begin with, but it generated enormous interest. You can bet those sellers feel relieved. If your apt has some challenges (see brick wall, above) then make sure you are discounting for those challenges. Chances are, you bought it with a discount for the same reason.
If you are a seller, you can either accept current market conditions or you can wait them out. If you are looking to sell and 3 brokers give you one price, and the fourth gives you a higher price, I’d be very wary of that fourth number. You’re in for a long wait and a lot of open houses.
It may seem to you that this has happened overnight, and that 6 or 8 months ago brokers were telling you that you could get $1.6 for your apt. and now they are telling you to start at $1.4. It’s almost surreal. Yet it feels like that to me as well.
Everything is different.
The real estate market cannot be looked at relative to last year’s numbers. You cannot really gauge comps from ’08 or even ’07. 2006 is a better place to work from, even though most sellers don’t want to hear it.
Prices are down 20%-25% from their peak. And the layoffs are just getting started.
I believe that the market will turn around, but I don’t know when. If you need to sell now, price realistically, before you end up chasing the market down.
What does chasing the market mean? It means you started too high and you’re never able to get ahead of where market activity is. You’ll end up cutting your asking price too many times, and you’ll end up with less money than you would have if you had priced lower to being with.
Before you sell, have long conversations with your broker about pricing. It will be the most effective marketing tool that you can have. You’re going to get low ball offers. Now is not the time to get insulted. My advice is to counter and consider every offer within 30% of your ask. Make sure you have confidence that your broker is comfortable with protracted negotiations. This will be a huge asset during the sale.
Speak to your co-op board members and have a frank dialogue about pricing. I’m hearing a lot of stories about co-op boards turning down prospective buyers because they don’t like the purchase price. I can’t prove this—no one can, which is why co-op boards wield so much power. Before you have a signed contract, it’s better to know what you’re up against.
Make sure your apt looks as good as it possible can (see my post on staging).
Finally, sell before you HAVE to sell. That will only put you in an even more precarious position. You should feel like you're in a position of strength, not out of weakness or fear. Your broker is on your team. Talk to him/her on a daily basis. Get a weekly update. Find out how many people have seen the apt or responded to an ad. Ask for comps. Make sure that the comps have not lowered their prices while you have stood firm.
It's a buyers market, but with the right approach, that's nothing to be afraid of.
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