Prices are up, but so are anxiety and disappointment. For every accepted bid, there are probably three also-rans. With Wall Street bonuses higher this year than last by nearly 40%, and apartment inventory still shrinking, demand for quality apartments continues to exceed supply. In the current, heated market that’s rife with record breaking highs, here is some food for thought.
Today, the buyer who hesitates loses. However, it seems that you’re damned if you do, and you’re damned if you don’t. With bidding wars becoming commonplace, do you bid the asking price immediately? Or does the ask become the bar from which you must bid up, sometimes as much as 10% or more? Look to your broker for guidance. Each transaction requires a unique and studied response.
Time has always been the enemy of a deal. But today, time can be lethal. The worst moments in the life of a deal are the days between an accepted offer and a signed contract. If you’re the buyer whose bid has been accepted, until your contract is fully executed, you can be overbid. Should that occur, usually you will be asked to match the higher price—a sum you were not planning to spend. If you’re the seller, your buyer can have second thoughts. Or worse, if you’re a greedy seller, you may alienate all your bidders. Moving to a swift contract signing is crucial.
With interest rates inching up, buyers who may have pulled back in recent months are finding themselves regrettably re-examining their motivations and the elusive bubble. Cautiously, they are re-entering the market. With every successive up-tick higher than the preceding wave, deals that are closing now may not seem quite so high in months to come.
According to the National Association of Realtors, the influence of rising interest rates will be offset by stronger job growth. Although New York City lost 1,100 jobs in March, more than 300,000 jobs were added nationwide. In addition, more and more companies are exceeding Wall Street forecasts. Additionally, the Securities Industry Association anticipates an 18% increase in earnings over last year and a 3% increase in employment. Financial companies like Merrill Lynch and Goldman Sachs are well into their best years ever.
Certainly, now is the right time to sell. However, it’s never a good time to gamble with your primary residence. Owners are best advised to buy and sell in the same market. Selling now and then renting while waiting for a lull in the market is tricky. In two years, you might be priced out of the market entirely.
Proper pricing remains the key element of an effective marketing plan. When a property is priced incorrectly, the seller misses the market beat. When the bloom is off the rose, the mispriced property is ignored.
In all categories, the preference continues for renovated properties in top locations. As soon as these spring flowers hit the market, they are met with multiple bids and are absorbed. If you’re the seller of a plum listing, or the hopeful buyer, the message is the same—choose a broker who will guide you wisely.