At The Core | Resale Home Prices Decrease

It’s been quite some time since we’ve been able to write the following: resale home prices are falling.  That’s right boys and girls: the price of resale apartments is-a-goin’-down

So, while you let that sink in for a second, let’s share some disclaimers and add a little perspective:

  1. Real estate prices never go in one direction for too long – and our recent streak of 6+ years has been truly a long one. Everyone knew that the pace wasn’t sustainable; the question was when we would see the breaking point of this trend. Alas, now the proof is in the pudding.
  2. It’s not just that prices have gone up, but over the past several years, we’ve seen nothing but bidding wars, limited inventory and excessive seller exuberance. This has left many sellers with a bit of a God complex, and buyers with a lot more white hair (from the perpetual stress of competing for properties and losing out on bids) and foot blisters (from constantly pounding the pavement to visit open houses and see new property). If you’ve been reading the Apple Peeled for some time, you might have even gotten bored by the same narrative: “yes, inventory is tight; yes, it’s a seller’s market; yes, you need to move at light-speed, and ideally have all cash (or at least a non-contingent financed offer, to have a shot at grabbing that apartment.”
  3. We believe this is a natural correction to a crazy market that had to slow down and adjust to market realities. This doesn’t make it an easy adjustment by any means, especially to you sellers out there, but as Jonathan Miller, President of Miller Samuels, has put it: “Maybe we’re heading out of the period when there was no shame in overpricing your home. We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend? Part of selling is pricing correctly or being more negotiable.” The pendulum swings. The farther out it swings, the sharper the swing feels on the way back.

Now, for the silver lining. Buyers, you have some breathing room on your side, and we haven’t been able to say that for years. At long last, you don’t have to pounce on each and every fresh listing within a few days of it coming on the market.  You don’t need to study auction dynamics before placing your offer.  You can relax a bit, be more planful, and stroll into that open house instead of sprint.

That said: warning to the buy-side wise: properly priced properties that are of high quality will continue to move at lightning speed (note in the article that 14% of properties are still closing above their asking price.)  So if you come across an apartment that you feel has the right attributes, the right location and the right price, chances are other buyers will feel the same way.

Sellers, it’s been a great ride … nay, a phenomenal ride. You’ve been able to call the shots for some time now, and buyers have responded.  It’s time to take a deep breath and assess your real motivation for selling your place.  It’s time to be realistic and be flexible in how you look at comps as you price your apartment.

Ask The Experts | Pricing and Comps

A truism that all sellers should know: in a rising market, you’re pricing in future gains; in a falling market, buyers are pricing in future decreases; you’re always playing catch-up.

Think about it: anyone selling anything always has a bias of wanting more for that item than the market can bear.  In a rising market, that bias doesn’t hurt you so much.  Buyers are pricing in a premium and are willing to slightly overpay based on the assumption that they’ll more than make up for it over the long haul based on robust market conditions.

In a falling market, however, you’re in a bit of a pickle. On one hand, you don’t want to leave money on the table and price too low. On the other hand, you know that by pricing too high, you risk having one price decrease after another to just meet the market where it is (i.e. below your adjusted expectations).  Chances are, just by the sheer bias as a seller, you’ll find yourself in the latter camp.

One other dynamic feeding into this likelihood: comps.  You see, comps are lagging the market by their very definition.  In a rising market, comps will always be lower than what the market can bear, which is why so many properties end up in a bidding scenario: because where a property was priced is just slightly below where the market is, and buyers are always at or ahead of the curve.  On the flip side, in a falling market, comps will always, always, and (one more for good measure) always guide you to overprice.  Why? Because they represent properties that closed in the past, which themselves are representative of deals that likely closed 3 months ago (the delay in public reporting), which themselves were signed 3 months before closing … meaning comps tend to lag about 6 months behind the market, a falling market. Therefore, if you’re trying to price “at” the market, you should likely try to price at or below where deals were closing at least 6 months ago; this, of course, depends on the speed at which prices are falling.

Otherwise noted: if you’re a seller in today’s market, you can’t afford to price “at” the market.  How do you finesse your way into precisely the right price range at which to negotiate your property?  That’s where an experienced broker partner comes in. If this sounds like we may be tooting our horn a bit, we are.

How many teams can say they’ve successfully weathered more than three NYC real estate cycles … let alone 5? How many of them can say they have a holistic approach to managing all sides of the transaction, along with all its players?  Accomplished, proven real estate brokers are your most significant asset; they know the product, the specific building and history, and understand the respective comps intimately.  There’s no substitute for experience here!    And the key to benefiting from that rich, valuable experience is trust.  Don’t stop until you are in a partnership with a broker whom you trust.  And then, for god’s sake, trust them to leverage their know-how and perspective in your favor.

Points of inflection in market trends (from rising to falling prices, from sellers’ to buyers’ markets) are tricky and require an extra level of expertise to navigate. Make sure you’re in the right hands and then you can keep calm and carry on :).

Date Your City | Bryant Park Winter Carnival

We had a nightmare: that February 4 came and went and we didn’t have a chance to visit the incredible Winter Carnival at Bryant Park. This spectacular array of experiences is only available from January 27 to February 4 … only nine days to enjoy it all.  What might you opt for?  The Silent Disco? (We’ll let you figure that one out.)  The Ice Ball or the Winter Brew House for the beer lovers among you?  How about lessons in the art of winter sports, from free curling to skating lessons?  What about a giant Ice Castle (don’t worry, we won’t tell anyone that you’re humming “Let it go” as you mime your way through your favorite Frozen scene)?  Between those, the Virtual Snowball Competition and the ability to defrost in the Cozy Warming Lodge, you’re sure to find something for you and your loved ones at this winter extravaganza!

Monthly Gem | Double Feature

It may not be readily apparent from our ranking, awards or a quick run-down of our listings, but we are price-agnostic when it comes to providing world-class real estate brokerage services. More bluntly put:  we handle the entire spectrum of price points in NYC real estate.  We don’t believe that quality service should be limited to the highest priced, the most star-studded names, or the most luxurious of properties.  We take great pride in leveraging our experience and expertise to the benefit of all of our clients.

To underline this point and highlight two wonderful listings, we’re showcasing two properties in different market segments as our “Monthly Gems”.

The first is 45 E. 30th Street, #PHB, coming back on the market at $14.95M. Designed for grand entertaining and breathtaking views, this 6,387 sq. ft., 4-story home (4,412 interior sq. ft. and 1,975 sq. ft. exterior) is known for its Midtown brilliance.  With ambient lighting, Sonos speakers, built-in shelves, wall-to-wall space for a dozen wardrobes or more and unparalleled views, the apartment exudes an enviable lifestyle. The magic of this apartment is evident in all the consideration every detail has received, including its 1,000+ sq. ft. outdoor terrace (one of 6), featuring an outdoor bar, fire-pit perfect for breezy summer nights and the most dramatic Chrysler and Empire State Building views found in Midtown.

The second is 255 W. 23rd Street, #6BW listed at $1.175M.  This corner apartment at Chelsea Gardens fuses prewar charm with modern luxury and is an immaculate one-bedroom, one bathroom home. With 10 foot ceilings, dark hardwood floors throughout and a dedicated dining area which overlooks the sunken living room – this apartment transitions seamlessly boasting a brilliant layout. Located next to the E/C, 1 and F/M trains, an abundance of restaurants, grocery stores such as Whole Foods and Fairway, multiplex movie theaters and much more in the famed Chelsea neighborhood.

Apple Bites | Tim Ho Wan

Normally, in the Apple Bites section of the Apple Peeled, we feature several notable restaurants that might pique your palette. In this case, we have been wowed enough by Tim Ho Wan, an East Village Dim Sum Restaurant, to feature it and it alone.  Why, you ask?  Feel free to pick from among any of the enticing reasons, gathered from here and here:

  • “The world’s cheapest Michelin-starred restaurant.” Foodie + value?? What is there not to love!
  • “Waits as long as three and a half hours.” What die-hard New Yorker isn’t attracted to the self-punishing wait for an in-demand culinary treat?
  • “First US location … items all priced under $5.” Novelty + accessibility … who are you guessing is waiting in those lines: tourists or locals?
  • “See you later Cronut queue and Black Tap gaggle, there’s a new longest line in town.” … and yes, they have limited hours to boot.

If you’re a dim-sum fanatic, or just like being in the know and on trend, head over to Tim Ho Wan … and then drop us a little note of what you thought of it. We’ll live vicariously through you…