It’s a new year, but some things never change: As always, New Yorkers are taking stock of the real estate market and wondering where it’s headed. Is 2010 the year to buy, sell, rent, or simply stay put?
For families looking to make a move, there’s good news. Experts agree that it continues to be a buyer’s market. Diane M. Ramirez, president of Halstead Property, describes the advantage for buyers right now as a perfect storm, “because you have the choice, you have prices that are at sub-degree value—they are not cheap, but you can find values—and there are low interest rates.”
It does take more to be a qualified buyer, however. “Two or three years ago the only thing you needed to get a mortgage was a pulse,” says Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm. “[Now] fewer people qualify, and people who do qualify have to jump through a lot of hoops.”
While buyers do still have the upper hand— prices are down 20 percent to 30 percent—Deanna Kory, senior vice president at The Corcoran Group, says that it is also not a bad time to sell. “It sounds like a contradiction, but selling isn’t bad right now because the inventory is low, so the things that are coming on the market are actually getting more attention,” she explains. Though she adds that the homes that are moving the quickest boast “a prime location and are beautifully renovated.” And for sellers who may lament the fact that they would have gotten a much better price on their home a couple of years ago, Ramirez points out that you may be able to make up the difference when you turn around and buy a home.
Overall, the key word for both buyers and sellers seems to be value.
“The only sales taking place are where the seller recognizes the realities of the market, and where the buyer therefore perceives great value,” says Hall F. Willkie, president of Brown Harris Stevens. Dottie Herman, president and CEO of Prudential Douglas Elliman, agrees, saying that in this market “when you find something with value then it goes. I haven’t seen too much that’s priced well that doesn’t move.”
Renters will also find incentives in the market.
In an effort to secure tenants, for example, many landlords are offering a month or more of free rent, paying the broker’s commission, and other perks. According to Willkie, over 70 percent of the Manhattan market is rentals. And while some are renting because it’s a short-term decision, others may be doing so because they can’t afford to buy what they need or want. But with reduction in value, points out Willkie, “that is no longer true—so we are seeing many renters become buyers.”
Looking ahead to the new year, experts are generally optimistic, citing the spike in activity over the summer and continuing into this past fall after the market was essentially frozen; the overall desirability of living in New York City; and what seems to be an upward trend in the economy. But with unemployment still high and credit tight, most are also cautious. It could take a while, even several years, according to Miller, for the market to come back.
Still, remember that everyone’s situation is personal. “In reality there is never a perfect time to buy,” points out Ramirez. “It’s really whatever works for your life.”
Willkie sums it up best: “I think that in the past some people got away from looking at what residential real estate is,” he says. “It is a home. It is shelter, a place to get out of the rain, to live, to put your head down on a pillow at night. Historically, it tends to be a great investment. In the recent past we’ve seen people treat it more like a commodity, but that is not its core.”
