So Many Choices
Despite many media reports on the New York City real estate market, properties are selling. In general throughout our market, sales are not happening with the speed and buyer urgency of the past five to seven years. It's taking a lot more to make deals happen, but they're happening. Buyer sentiments and expectations have shifted. Many buyers are reluctant to move forward today even on a property they really like because they feel that prices will come down more over the next several months, and waiting to purchase could be a better option for them. Other buyers fear some impending financial crisis that could affect their incomes or savings. They think owning property in general is a good decision, but question if today is the right day to do it.
The high level of inventory is also affecting buyers. With so many options on the market, buyers are simply finding it difficult to make a decision on which property to move on. In a market with fewer choices, it's easy. Like an HGTV house hunting episode, buyers have a lot less debate when there are three homes to choose from, and one's a total dud. But currently, buyers are sifting through dozens of options. Not only does this decrease their sense of urgency, it overwhelms them and promotes second guessing.
Buyers need a lot more attention and advising to feel comfortable enough to move forward. As sellers, lowering a price is a good way to spur attention on a property and hopefully buyer activity. But that is being done everywhere, as price drops continue at a rapid pace. So as brokers and sellers we need to do more. We need to find out what a buyer really needs and wants outside of price point. Buyers need help putting the market in perspective. The last time we saw such buyer paralysis was ten years ago. Where we are today has some elements that feel like 2008, but so much is very different.
The spiraling market factors of ten years ago are not the same today. Banks are lending and treating buyers very fairly. Money is still very cheap historically. There are great options to choose from on the market. And even if one assumes further overall pricing reduction in the market, historically we know that sellers hold off and the inventory becomes less attractive. We also have to talk to a buyer's time horizon. Markets cycle, and if a buyer's intended horizon will outlast a normal market, then it isn't just a discussion about how timing for the perfect price bottom is futile, it's also a discussion about how they are likely to miss out on the place that was perfect for them to call home.