From My Desk To Yours September 2020
When Covid lockdown ended on June 22nd, the activity surge we were hoping for in Manhattan from pent-up demand never happened. While July saw a bounce, recovery was limited primarily to properties priced under $1.5M, fueled especially by the lowest mortgage rates in 50 years—2.88% for a 30-year fixed product. An August lull followed, best explained by the summer calendar as potential buyers remained in their vacation homes.
Will life and real estate return to a more regular rhythm after Labor Day? I hope so, especially if schools and families manage to successfully navigate hybrid models of combined in person and virtual learning. I’ve been advising sellers not to wait for the spring market to list, as there will be even more competition for new offerings in 2021.
Manhattanites are on the move, at least for the moment, and they are relocating to tax havens like Florida and points north, south, east and west. It’s tough to ignore the 2-3 moving trucks that line nearly every street in nearly every residential neighborhood.
So what’s a seller to do?
◆ There’s an argument to be made for pricing at pre Covid values since purchasers will be looking to negotiate hard for price reductions and further discounts. Prices have been declining since 2017/2018, and they are more likely than not
to slide more, especially as the city’s economy continues to struggle.
◆ On the other hand, if you’ve been sitting for months with a pre-Covid price, you’ll gain some new attention if you adjust your ask. Buyers have limited time for unrealistic expectations.
◆ Acknowledge that buyer preferences have shifted, and features like privacy, a home office, proximity to a park and outdoor spaces have increased in value.
◆ A declining market benefits sellers who are looking to trade up because the spread between what they are selling and what they are buying is smaller than in a rising market.
◆ Properties in need of renovation continue to be especially challenging. Remove distracting mirrors, patterned wallpaper, heavy draperies and wall-to-wall carpets. Paint the walls, scrub everywhere and declutter, so that buyers can more easily envision themselves in your space.
◆ Despite a shrinking buyer pool, those who are looking today are seriously committed to making a purchase. With new protocols in place, visitors must complete Covid liability and health forms for each person, and Open Houses are restricted to appointment only. It's not unusual after the first week of listing for property showings to trickle down to 1-2 a week.
◆ New Yorkers, as never before, are your best prospects. Travel bans and forced quarantines have put the kibosh on out-of-state and foreign buyers.
◆ Listen carefully to all offers and terms, and evaluate the buyer's employment history and financial profile. A token counter to even the buyer who may be fishing is better than no response to encourage a negotiating dialogue. It's foolhardy not to respond.
The city’s and state’s increasing budget shortfalls as well as the uncertainty about increased real estate taxes have been exasperated by the pandemic. A rebound for real estate will depend not only on vaccine discovery but on readily available treatment options and on how the city deals with MTA and other problems. We are in an evolving market where one size does not fit all, but where experience and patience are critical. If you’re considering making a move or would like to learn what’s trending in your neighborhood or explore points outside of Manhattan, let’s talk.
Shirley Hackel, NYRS®
shirley.hackel@compass.com | (914) 980-0371