STATE OF THE MARKET
- Many of our clients are questioning whether an oversupply of ‘aspirationally’ priced new development units has led to a market bound for further price reductions.
- While it’s worth noting that at the present pace it will take an estimated 3 years to sell out the currently listed and available-to-be-listed (‘shadow’) Manhattan new development inventory, resale (non-new development) inventory has actually remained consistent over the last quarter. In addition, although Brooklyn currently has an oversupply of rentals, the number of for-sale units in the borough has fallen 30% year-over-year. This has translated into greater demand than supply and an extremely brisk absorption rate of ~1.9 months.
- Some buyers are asking whether they can achieve lower pricing 12 months from now, while sellers are wondering if it’s an appropriate time to list.
- As daily participants in the market we are seeing that there has, in fact, been a great deal of correction which may not always be reflected in stated asking prices. In addition, we are seeing discounts on asking prices of ultra-luxury new development units up to ~15% in the most aggressive cases.
- We believe that today buyers can purchase the best quality assets (with most long-term appreciation potential) at opportunistically negotiated pricing before there is an overall consensus that the market has entirely corrected, and every participant waiting on the sidelines jumps in and ultimately bids up higher-quality homes.
- Sellers that list now are able to achieve the best execution before ‘must sell’ owners potentially trade at a very strong discount in their building/line and create a historical sale comparable that will set a value ceiling in the eyes of many purchasers.
- By way of example, we recently listed a $7 million+ asset and were under contract in under two months very close to ask because it was strategically priced, negotiated, and staged. Garnering best-in class online, print, and broker network exposure domestically and internationally were also key in terms of standing out from competing homes.
- We are always happy to discuss any particular questions you may have so don’t hesitate to reach out!
Please don’t hesitate to reach out to us with any questions, or on any of your real estate needs.
Alex and Sybille