Open House Sign
The housing market has been improving across the country, but few cities experienced such an impressive first quarter as New York City. After several years of straggling sales, the Big Apple showed tremendous improvement in the first three months of 2013, as prices and demand both surged. The combination of desperate buyers, low interest rates, and rising prices may make things look a lot like the real estate market back in 2006, but there are significant differences. This is a new kind of market, one that has more to do with what kind of a city New York has become with the perils of easy money being made. There’s a significant inventory shortage and new construction at a near standstill. Tight credit, low inventory, and high demand have created a market, one that favors the cash-heavy and the affluent. They favor the affluent because price is not a concern to them. Simply said, they have a large inventory of cash. Sources report that home prices climbed 18 percent in a year-over-year basis during 2013′s first quarter. With distressed properties excluded, those gains rose to an unparalleled rate of 21 percent.
The rules of engagement for buying an apartment in the city have changed. Negotiation, brokers say, is no longer part of the equation. Forget about taking time to mull over your decision. Serious buyers need to be prepared to pounce. And while lots of cash has always helped, it’s now more important than ever, as sellers select the best offers with the least amount of hassle involved.
While housing prices across the country recently posted their biggest gains in seven years, New York City’s market has been experiencing a slow and steady recovery ever since the market hit bottom in 2009.
Below are some tips to help securing a spot in New York City.
Don’t wait for the open house
Try to find out the details of the sale before the rest of the competition
Forget about getting a deal
The conventional wisdom over the last few years has been to come in at 5 percent below the asking price when making an initial offer. That won’t fly for attractive listings that are particularly scarce, especially if they are priced fairly. “Give the full price with no contingencies and leave that offer on the table for 24 hours. To give yourself some leverage in the process, have a property appraiser, like Abbe Edelman; come out to give you a property appraisal.
Don’t delay!
Being the first to make a solid offer can give you an edge
Be thorough
A well-prepared offering package can be a leg up for buyers
Raise your down payment
Thirty or 35 percent down is the new 20 percent.
Sign your contract quickly
A year ago, buyers could take as much as two to three weeks for due diligence and negotiation before signing a contract. Today’s sellers are less patient and may pull a deal from a buyer that is taking too long. Ethical broker will not abandon an accepted offer, but if it takes too long, they will go to their backup plan faster than in the past.
The growth in high-end projects in Manhattan comes as housing for the working and middle class is in increasingly short supply in the city. These buildings are proving so profitable that they are warping the local real-estate market, making it more difficult to put up more-affordable housing. But builders of ultra-luxury apartments have much more latitude on costs because they are securing spectacular prices for their projects.
As a result, the luxury building trend is driving up the overall cost of land in the city. Several developers maintained that they could build moderately priced housing only if they could get significant tax breaks. Determining who is buying many of these properties is a challenge because the super-rich often go to great lengths to shield their identities, requiring confidentiality agreements with builders and brokers while using anonymous corporate entities for purchases.
