Prices in Manhattan’s luxury residential real estate market continue to soften onset by an increase in inventory and global economic uncertainty. Pricing remains the elephant in the room and the largest issue in today’s market as sellers have been slow to adjust their expectations to the new normal.
We offer you our best recommendations, based on more than thirty years of experience on how to get the most out of the market.
1. Connect the product to the price:
Mixed feelings and a multitude of opinions surrounding Manhattan’s luxury market remained the major talking point in the first quarter of 2016. While the data shows a flattening in sales pace and pricing there are certainly still buyers in the market. These buyers acted when the price was right, rather than committing to a property during a first showing or getting caught in a bidding war as we’ve seen in the past few years.
The market data indicated is suggesting that while buyer behavior has shifted, seller expectations have not. Seller optimism is understandable given a number of noteworthy sales being recorded and reported in the first quarter of 2016. Due to the time lag between contract and closing however, this data actually reflects conditions 2-4 months earlier when the market was more lively.
It is important to stay informed and use current data and market conditions when pricing your apartment or making an offer. We see value in resales whose sellers have adjusted their price perceptions and new developments that may see price discounts due to extended time on market and pressure on developers to move their product.
2. Discern premium products:
With a large number of new development units set to hit the market over the course of the next few years, buyers will have an increasing number of choices. As researcher Barry Schwartz says, “As the number of options increases, the costs, in time and effort, of gathering the information needed to make a good choice also increase,” writes Schwartz. “The level of certainty people have about their choice decreases. And the anticipation that they will regret their choice increases.”
Our recommendation is to see a range of available product and be patient when purchasing. As always, we recommend purchasing a superior product in a premium location, rather than speculating on expanding neighborhood boundaries or a product built by a developer without a proven track record.
3. Know your broker:
We recommend working with a broker that can spot red flags and lend advice on current conditions. Data driven decisions become increasingly important as the emotions of the past few years whirlwind market subside.
We are always available to help or advise you on any real estate matters in the United States or overseas. As always, if you have any questions or just want to talk real estate, please don’t hesitate to give us a call. Click here to view our Q1 Luxury Market Report.