We’re seeing great conditions for a busy spring- sellers are pricing apartments well, buyers are out in the marketplace and seeing value, and deal are happening.
There is potential for doom and gloom perhaps nationwide- jobs are still difficult to find, inflation perhaps looms etc etc etc.
However, things are growing a bit rosier in Manhattan, in Brooklyn where we do business.
Inventory hasn’t skyrocketed.
Sellers are being very realistic about their options.
This post may be a bit jumbled, since I’m in DC for a conference and feel it’s very important to give you a real time sense of the markets.
I am seeing bidding wars.
Recently, a property on the East Side that needed $200k of work received 5 bids within 3 days on the market.
Ultimately, a cash offer $100k over asking price was accepted, someone with multiples of the asking price in liquid assets after closing.
For those of you in Manhattan, perhaps this isn’t so shocking.
However, my takeaway was that for this type of apartment, which could be argued to be not a trophy apartment, but a practical investment for a growing family- this was a bit of a shocker.
5 bids?
Qualified people with $5-10mm in assets for a property worth about $1.25mm?
We’re just seeing this expression of activity after a long time of folks sitting on the sidelines.
Open Houses- sure, there are the tire kickers.
There are the neighbors who are nosy and want to see what has been done in the building.
There are the lowballers who drive in from NJ for fun and put in crazy bids.
Those who feel the sky is still falling.
I hate to break it to folks, but the days of real catastrophe may be behind us, and the days of chicken little are growing less noisy by the minute.
The sky may not be falling anymore.
Now the last bit, which is definitely a sensitive subject- is the matter of mortgage contingencies.
If you bought an apartment from 1997-2008, you probably didn’t have to worry about this.
You simply threw a number on a contract and there was a bank to lend to you.
Deals almost never had mortgage contingencies.
The first deal where a buyer demanded a mortgage contingency in recent memory was December 2008.
Major concern that he wouldn’t get a loan, and rightfully so.
It was the right thing to ask for, and a good thing, too- since it took us three banks before we found one willing to lend- shocking, given the years of living high on the hog.
Fast forward to 2011.
Buyers are still asking for mortgage contingencies, and it’s killing deals.
Sellers are beginning to feel much more confident in the value of their properties.
I’m hearing that lenders are opening the floodgates – see my mortgage post- and in essence, many buyers are going to have to do some soul searching- do they want to risk their downpayment, and sign a contract without a mortgage contingency?
Or do they want to lose the deal?
It’s going to be a very interesting spring!
New listings coming to market from my team- looking forward to keeping you posted on the market.
All the best!