HOW TO PROFIT IN THIS MARKET
Dolly Hertz
Real Estate Broker Associate with Engel & V?lkers NY Real Estate | New York City, NY | Open Doors with Dolly
Much has been written recently about the downturn in the New York real estate market. And most of us have this seen this before, most recently in 1990 and 2010.
Just four short years ago, buyers were lining up and attempting to out-bid each other for every possible property, no matter how desirable or undesirable. Several weeks ago, a client entered into contract for $3.2 million on a property that had hit the market two years ago at $6 million.
What does that say about that property? Is there something wrong with it? Absolutely NOT. It’s the same gorgeous offering the buyers fell in love with at the higher price, now deeply discounted because of market conditions.
But WHY you ask, is the market so down? It’s clearly not the roaring economy. And the tax law changes to the SALT tax deductibility and mansion tax have had some impact. But the market had started turning downward in 2016 before these tax events.
Sellers, perceiving the buying fever of 2015, continued to raise prices ever higher while at the same time, developers recognized the lack of inventory and began building like crazy.
And then there came a tipping point at which many buyers stayed on the sidelines due to high prices and began renting or continued to rent. As a result, properties with 2015-style price tags began stacking up. And then the new construction came to market, causing a sudden overabundance and more supply than demand.
Many sellers are only now waking up to the new reality of pricing in 2019. And we see drastic reductions which will begin to drive buyers back into the market.
When is the right time for YOU to get into this market? Will prices continue to decline? When will be the next tipping point when suddenly there are bidding wars again? All unknown. Here’s what we do know today: there has not been a more favorable moment for New York buyers since 2011. Even if you have to sell low in order to move, you will buy low on the other end, and still be able to acquire a bigger, better home.
The only thing we do know for certain: real estate markets are always cyclical. They always come back.