All indicators point to a busy buying season ahead this spring. The year’s beginning has been surprisingly hot, following a stronger than expected 4th quarter for 2006. Outperforming historically low end-of-year expectations, we moved with great momentum into 2007. Despite negative media attention throughout much of last year, prices rose a steady 6% over 2005. There was no slump.
As we entered the new year, a thriving Wall Street was expected to feed Manhattan real estate. With discretionary income at an all time high and with seven figure bonuses for hedge fund managers, investment bankers, brokers, traders and analysts, even those who did not participate in any bonus windfall were feeling pressure to relinquish their sideline mentalities about a cooling market. Displaying a limited tolerance for delayed gratification, impatient buyers who could wait no longer stepped up to evaluate the available offerings, crowding open houses again with as many as 30 lookers per hour.
But the drama of wildly high price increments—remembered from successive years 2003 to 2005—is over. Balance and stability are the new buzz words to define this season. Buying demand is pent up and high, but the inventory of co-op and condo re-sales is falling. Paradoxically, inventory is limited, despite the growth of new condo products. With interest rates expected to hold steady and well below 7% for the duration of 2007, opportunities abound.
The advice to sellers remains simple: hire the right broker, set a realistic price, set the stage and listen to offers.
Hire the right broker. Get referrals from friends or other professionals, and interview your prospects. Look for experience, service, common sense and a user friendly web site. For the best outcome possible, choose a seasoned broker with sensitivity and integrity who demonstrates a willingness to provide personal, undiluted attention to achieve your specific goals. Since the broker holds together not only the terms of the deal but its players from the attorneys to the mortgage brokers to the architects to the reference letter writers, good communication skills are essential. When I‘m involved in a co-broke situation, I want to count on a skilled professional to manage emotions and expectations on the other side of the deal. Big broker egos are more of a hindrance than a help.
Set a realistic price. At the outset of an offering, there is always a range in price to consider. It’s far more effective to price near the mark rather than much over the target so that the property shows as the best within a given price and category. Listing a property at the high end of a price range is counterproductive because it wastes valuable time. Today’s buyers are not bidding unless the asking price is in range of their intended offer. In the rapidly accelerating markets of past years, it was reasonable to pay a shade more than budgeted because the market was moving so fast. In a slower paced market, there’s less pressure for more prudent buyers to act quickly, so it’s taking longer to sell a property. A tight asking price invigorates the marketplace, causes everyone to take notice, and yields the greatest return. It brings urgency to activity and stimulates interest quickly.
Set the stage. Happy properties—ones that are clean and show well—make buyers feel good and bring in the most dollars. With a little polish and a lot of common sense, you can set the stage for your home sale. Since first impressions are critical, consider your residence as a commodity to identify flaws with objectivity. Think of yourself as a set designer to prepare a scene that will welcome and encourage buyers to imagine themselves in your space. Redoing a kitchen or a bathroom is far less important than scrubbing the place thoroughly, since most buyers will renovate to suit themselves. Remove clutter, repair whatever is broken, take down heavy draperies, open the blinds, and let the sun shine in. Consulting with a stylist is money well spent.
Listen to offers. Good brokers know how to prioritize needs and identify areas for flexibility and compromise. They know how to anticipate and overcome objections. It’s up to experienced brokers to present buyers and their offers in the best light possible. Persuasively outlining the strengths of a purchaser lends validity to an offer, and encourages negotiation.
New York is flourishing, and Manhattan real estate is not tanking. All segments of the market are expected to remain strong. Buyers are advised not to fear jumping into the market at any point this year. Sellers are cautioned to price realistically and with great discipline to acknowledge that prices have leveled. 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.