Hello, everyone!
I hope you’re reading this from a comfortable beach chair instead of an office!
The market has taken a tiny breath, though perhaps it’s panting between sprints rather
than breathing deeply.
August always reminds me of my high school two-a-day football practices in sweltering Louisiana humidity, so
I am
very thankful for what has been an amazingly cool month of weather!
But, like in
football, August in Real Estate is preparation for the
busy season – only spring, historically, is busier than fall.
What does the market have in store for you?
For
my
bullet point readers, here’s what you absolutely need to know about the market right now:
Not much to buy right now
- Inventory
remains incredibly low
. - Downtown units are trading at a pace I’ve never seen.
Anything under $2.5mm seems to sell in 2 weeks or less.
- Interest rates
still are
remarkably
low.
- New construction permits are going up, but almost exclusively for very high end properties in Manhattan and Brooklyn.
They could be higher, but for the challenging regulatory environment of building.
- Sellers have been pricing things very aggressively since spring, and in some cases this has caused properties to linger. Still,
the average time on market remains 80 days to contract.
What will shift in September?
I’ll lay out a Top 5 list of things that I see very likely to happen
this fall:
Don’t be afraid to sell into this market
(1) We’ll continue to see aggressive pricing, but I am seeing some signs of the “reasonable seller” sticking her head out of the shell.
That is, some sellers will still be
unrealistic in their pricing, but from others, who have owned for a long period of time, or have finally seen their values extend beyond 2006-2008 pricing, we should see some quality inventory that seems priced well.
(2) Buyers will be able to discern quickly the difference between this type of seller, and the seller who is testing the market.
Sellers who indicate a “if someone pays my price, I’ll sell” mindset
are, generally speaking, hard to do business with.
I predict that a good amount of this over-aggressive inventory will
either sit or be taken off the market.
(3) Apartment inventory, seasonally adjusted, won’t change much, remaining low, though inventory will swell more than it did in the spring.
I see
everything hitting the market getting snapped up in short order.
The demand is there, and the property won’t satisfy it.
The other factor keeping the sales pace going…
(4) Interest rates, as I mentioned, are low now, and most experts expect them to stay low until mid-2015.
I had thought that rates would tick up all during 2014, but I’ve been
happily wrong.
In fact, rates are at or near their lowest point of the last 12-14 months.
I know, not much of a bold prediction.
(5) Some buyers will give up, just before the “perfect apartment” comes to market.
It’s
been a very challenging and exhausting market for buyers, but I would urge them to stay the course.
As I expect to see some reasonable sellers, there seem to be some deals to be done that won’t require
therapy when all isl over.
So, we’ll keep it nice and concise this month.
More to come as the fall season unfolds!
Enjoy what’s left of the summer!
-S