At this stage, while the market is so strong, perhaps it’s better to look at what is still not selling, where the gaps are in the marketplace, the holes where things aren’t trading.
Given the activity in the marketplace, I completely understand why some sellers would be furious that their property isn’t selling.
The article title is a bit euphemistic, considering that EVERYTHING is selling.
However, some things are helping the average days on market stay around 90 days, rather than the 7 days which seems to be the case for everything else.
Let’s cover a short list of
properties that are falling into these “unsold” zones:
-Three bedrooms coops
priced between $2.5-4mm
-Cooperative Units below $500,000
-One Bedrooms with High Maintenance
Three bedrooms Co-ops
priced between $2.5-3.5mm
The most active part of the marketplace seems to be the market in the $1.5-2mm range.
This seems to be where the majority of larger two-bedroom units are at the moment, with less than four months of inventory across the city.
Upward pricing pressure on two-bedroom units towards the top of that range is evident.
However, there seems to be a gap between buyers and sellers between $2.5mm and $4mm for three-bedroom units.
Buyers either want larger units than what these asking prices seem to offer, or expect to do less renovation than buyers in the $4mm and over price range.
Those large three bedrooms properties that are above this price range are selling briskly, as demand from very qualified buyers for large units seems to be there.
It’s not that a seller can just raise the price, of course.
What seems to be lingering are not-quite-large-enough six-room properties with smaller maid’s rooms, or unrenovated classic 6’s with high maintenance ($3000 or more),
or these same units without views.
Sellers have gotten a bit aggressive with pricing, and buyers are demanding more at these prices.
A mismatch has happened- This story is still developing, but as more inventory may come to market, we’ll continue to track it.
The vast majority of our sales volume is either below $2mm or above $4mm.
Units below $500,000
Of course, in most metropolitan markets
this would cover almost all properties, and in Manhattan this covers almost nothing.
Studios and small one bedrooms, even those with low maintenance, are taking the most time to sell.
Generally, while rates are low, these buyers are the most constrained in terms of what a lender will allow them to borrow, and what the average cooperative board will allow them to purchase.
They are the most sensitive to price, and least likely to look at apartments out of their price range.
Given that these buyers are also actively tracking how fast units are selling generally, a mindset creeps in, where a buyer would be fearful of seeing a property 5-10% above their price range, for fear of falling in love- and then not being able to either afford it, be allowed to borrow enough to afford it, or not have an offer accepted because a seller doesn’t think the buyer can pass the board process.
Hence, proper pricing and reaction to market conditions is absolutely essential.
Price reductions, which have been less crucial in many segments of the market, are key here.
One Bedrooms Cooperative Apartments with High Maintenance
The big complaint right now is that maintenance is “so high.”
Of course I can’t help but think of the mayoral candidate telling us “The Rent is too damn high,” but in truth this is what things seems to cost now.
Real Estate Tax has skyrocketed.
Where it seems to be punishing sellers is with one-bedroom units.
As maintenance pushes over $1500, the pushback from buyers exists.
Maintenance over $2000 for a one-bedroom seems to be a real killer.
As the year continues, and buyers see one-bedrooms continuing to push over $700-800,000 again, these units in the $550,000-700,000 range with higher maintenance may start to look affordable again.
Until then, we’re seeing a lot of inventory for one-bedrooms in high-maintenance buildings.
New York has not become Europe yet, at least in the sense that many New Yorkers do not like to buy walk-ups.
When they do, they do so reluctantly.
In the most robust of markets, properties with stairs of any kind, except perhaps single-family townhouses, must find the right buyers, that subset of buyers who don’t mind the walk-up.
Generally speaking, Europeans and foreign buyers seem more accepting of stairs.
It is often not just about the pricing- just about allowing time for buyers to find the property.
Otherwise, we’re seeing a very strong market!
With most everything else in short supply, with dwindling supply and excess demand.
Our end-of-year numbers will show a lower overall sales volume (in total dollars sold), and a higher number of transactions due to our taking market share- it is my view that these four categories will contribute significantly on the “drag” of longer times on market, almost exclusively.