Brighter times for buyers ahead?
Photo-Illustration: Curbed; Photo: Getty
Is it finally a buyer’s market in New York? The buyers themselves certainly seem to think so. Kirsten Jordan, an associate real-estate broker at Douglas Elliman, says that with every other deal she’s been on this summer, “the buyer uses this technique where, after their offer is accepted, just before they’re about to sign, they call their broker and say, ‘The only way I’m doing this deal is if the seller gives me x.” When we spoke, she had just got off a call in which a buyer had threatened to walk if the seller didn’t knock $47,000 off the contract price, allegedly because of a construction estimate that came back high. The seller didn’t believe the demands were anything other than a negotiating tactic — but had, grudgingly, ceded a $20,000 discount. “Buyers feel empowered to do this because they know they have the sellers over a barrel,” says Jordan. “They can either walk away or get extra money. If they’re moving forward in a market with this much uncertainty, they want to feel like they’re getting a really good deal.”
For the past few years, the New York real-estate situation hasn’t been easily categorized as a buyer’s market or a seller’s market at all. Instead, it’s been no one’s, really, a continual stand-off where prices and interest rates stayed stubbornly high and low inventory propped up those prices even as many buyers balked at making offers. If it was anyone’s market, it was the global elite’s — at the very top of the scale, all-cash sales over $4 million have been brisk. Buyers snapped up units at condos like the Aman, the Giorgio Armani tower, and One High Line, while pretty much anything needing work or in a co-op — and most units that come up for sale in co-ops need work because they’ve been in the same hands for decades — languished. But by this spring, listing inventory was up, prices were (slightly) down, and buyers were starting to feel bolder.
Ryan Kaplan, an associate broker at Corcoran, recently negotiated more than half the price off an Upper West Side co-op, an estate sale whose owners had been asking $2.5 million. Another deal where he represented the buyer — a penthouse in a West Village Bing & Bing building, also an estate — closed in the low $3,000s per square foot, significantly less than a nearby Bing & Bing penthouse currently in contract at $5,750 per square foot. “I think it’s been a buyer’s market for a long time,” says Kaplan. “Sellers have either accepted reality or they can’t afford to wait anymore.” And while that’s especially true of estates, it’s also true of many apartments that have no problems beyond their price. Kaplan recently represented the buyers of an extra-wide Park Slope townhouse, 19 Montgomery Place, that came on the market in January priced at $15 million. The sellers, who’d paid $5.2 million in 2012, had done a renovation. The buyers saw the house over the winter and waited it out. “We rolled the dice. We decided we’d rather lose it at that price and then, if it failed to sell, go in really aggressively.” They eventually made a deal at $12.5 million, saving themselves all that money by simply waiting a few months with fingers crossed.
Foot-dragging and re-viewing an apartment multiple times before making an offer — or not making one — have been commonplace lately, according to Coldwell Banker Warburg associate broker Svetlana Choi. “Buyers will come three, four times and then they still want to think about stuff,” she says. Multiple viewings don’t necessarily increase the likelihood of a sale — often, it works against a deal. “I have a listing at 444 Central Park West. One woman I showed it to, she came alone, then she came with her family, then she came with a contractor, then she came with her extended family. Everyone loved the apartment except for her brother, who nixed it.”
What’s the cause? Interest rates? The election? It’s hard to say, although the high mortgage rates have led to daunting monthly costs lately that definitely spook some buyers, especially those jumping from the rental market. Choi noted that one older couple she’d shown an apartment to, a pair of lifelong tenants, were hung up on not paying more than $10,000 a month between mortgage and maintenance fees, although they could afford significantly more. And while $10,000 a month is a lot, that’s about what a $1.3 million apartment — say, a nice, renovated two-bedroom on the Upper West Side, nothing lavish — pencils out to with 20 percent down.
Frederick Warburg Peters, the president emeritus of Coldwell Banker Warburg, thinks we’re still in that market limbo and that both sides are still, for the most part, being unreasonable. “It’s up to the brokers to inject a degree of reality,” he says. “Those are the deals that are getting done.” The advantage used to seesaw back and forth between buyers and sellers, he says, but nothing’s been the same, in any direction, since the COVID shutdown. Even the old familiar seasonal cycles no longer hold true. August used to be a dead month for the luxury market, when the rich were out of town. But the $4 million–and–up market has been doing great this month, according to Donna Olshan’s luxury-market report — last week, a $43.5 million penthouse at Central Park Tower and a $36 million townhouse on East 79th both went into contract.
So what’s a seller to do? Simple: Don’t overreach to leave room for negotiating, and price the place where you think it will really sell. Steven Gottlieb, an agent at Coldwell Banker Warburg, tells this story: He recently took over a listing that had been sitting on the market at a little more than $2 million. The sellers, not unreasonably, expected someone to make an offer a smidge under the ask, but no one did. After dropping the price to $2 million, they relisted it at the end of spring. “We had 11 parties at the open house and got four offers,” he says. The sellers got slightly more than their asking price without any niggling 11th-hour negotiations. “The reason buyers are being so demanding is because they can be,” Gottlieb says. “If you price at value, you’re more likely to have choices. And that takes away the bad behavior.”
