Prices in Manhattan’s luxury residential market have declined for seven consecutive months, according to data from StreetEasy, amid strong inventory and softened demand. Still, premium prices persist as sellers slowly adjust their expectations to the new reality.
Mansion Global asked the experts for their top recommendations to avoid paying yesterday’s sky-high prices in today’s more down-to-earth market. Here’s their advice.
1. Know Your Broker
Jonathan Miller, president and CEO of real estate appraisal and consulting firm Miller Samuel Inc., said it’s important for buyers to work with a broker who can spot the red flags. For example, he said, one must know how long a property has been on the market.
As of January, Manhattan’s luxury properties spent a median of 131 days on the market before going into contract, due in large part to slowing condo sales, according to StreetEasy.
“If the property has been on the market for that amount of time already, then it is a concern,” said Miller.
Miller suggests finding out when the property last sold, for how much and what changed during that time.
“If someone bought a home for $10 million and they put $1 million [in renovations], and they’re now selling it for $20 million… That’s the kind of insight you’ll get from a broker who knows the market,” Miller said.
2. Know the Future
Informed buyers already know the importance of understanding the market inventory in their desired location. When demand is strong but supply low, buyers find themselves paying the full asking price—or more. When supply is high, they’re in a better position to negotiate.
For Jeremy Stein, senior global real estate advisor at Sotheby’s International Realty, it’s even more important to know what’s coming to the market soon.
“If there are a bunch of new products coming along, you’ll definitely have more flexibility,” he said.
3. Don’t Start at Asking Price
When they’re excited about a property, it’s natural for buyers to get anxious when submitting their first bids. In highly competitive markets, such as Manhattan, many zero-in on the asking price.
Stein urges buyers to carefully consider their first bid.
“You should not be scared to offer below the asking price,” he said. “The worst thing that can happen is that the seller says ‘no.’”
This is even more true for new construction, which Jay Glazer, a broker with Compass, describes as “negotiable.” When new buildings have a large number of units available, Glazer sees opportunity.
For example, One57, the 90-story building on West 57th Street, aka “Billionaires’ Row,” is still around 40% unsold—after construction ended in 2014. Condos there have been reselling for a discount, including a four-bedroom unit purchased in April 2015 for $20.3 million; it later sold for $17.75 million.
4. Keep Cool
Buyers are often led to believe there’s more interest in a particular property than is true, especially in new developments. Sotheby’s Stein advises buyers against making rushed or emotional purchasing decisions, particularly in a listing’s first week.
“You might see that, two weeks or two months later, the property is still available,” he said.
Prices are still adjusting to the new market, said Compass’ Glazer, and the “safest bet is to wait.” Very few buyers are willing to engage in bidding wars that result in overpaying.
“If you know [the property] is overpriced,” he said, “wait for the price to drop.”
Or, if you must make move, “Put in a reasonable offer and sit for a while,” Stein advised.
On the Market in Manhattan
Price: $9.995 million
More than 2,800 square feet of living space pairs with an enormous rooftop terrace featuring panoramic views of downtown Manhattan.
Brown Harris Stevens
Price: $38 million
The “Gucci Penthouse” features 28 full-length, floor-to-ceilings windows that make the most of the sprawling space’s 14-foot ceilings.
Stribling & Associates
Price: $22.5 million
A classic SoHo duplex penthouse floating above Manhattan’s downtown shopping district with 360-views from every level.
Write to Andrea López Cruzado at email@example.com
Follow Mansion Global:Facebook | Twitter | Instagram | LinkedIn | Messenger
Write to us: firstname.lastname@example.org