Our Spring Market
In March, we saw 851 signed contracts in New York City and the market moving in the right direction. In addition, we are now seeing offers come in on listings at much higher rates, and buyers are moving more aggressively than any other time in the previous six months.
We moved from discussing the new tax plan with buyers on a constant basis for months, to experiencing a March without any discussion. Buyers now seem to be focused on the three projected interest rate hikes planned by the Fed this year.
We are certainly in a value market in which buyers are looking for value over personal preference in many ways. A buyer may give up a shorter commute or preferable view to gain a property that they perceive to have more favorable fiscal prospects. This state is spurred by buyers either being conservative with their own spending or fears that values may drop, and buyers don’t want to be part of an extended matrix.
This means buyers are more focused on searching for value pricing per foot over location. This perspective may be wise for a short term gain, but likely not if the projected hold on the property is for the long term. Sure, value properties sell faster in a down market. But in a bull market, these value picks have low ceilings, whereas luxury peaks at a much higher denomination. So if you are looking for a 3X gain, you will most likely see it by taking advantage of this market to buy a luxury product at its current devalued rate.
Of course each buyer has personal perimeters to meet and conservation of funds is often the case. Either way, short term value buys or long term luxury holds, buyers are doing well in the current climate.
However, the signs of life are here for rising values. We are seeing more bidding wars in some market sectors. We were involved in several highly contested bid situations in March. As just one example, we saw 28 bids on a one-bedroom coop, which went to contract nearly 25% over its ask. We do not speculate that this will become a norm like it was three to five years ago. But it is a spark in what has been a cold seller’s market.