I hope you had a great summer! Mine was extremely busy with client activity across the spectrum of condos, coops, townhomes, and multi-families. My clients have primarily focused on neighborhoods like the Upper West Side, Park Slope, Kensington, Windsor Terrace, Greenwood Heights, Bedford Stuyvesant, Brooklyn Heights and Spring Lake, NJ for primary residences as well as investment properties; most of the interest has been in resales, but some in new development. New Development can offer interesting value, but since you’re buying a promise for the future, be cautious of potential gaps between what's marketed and what's likely to be delivered.
The main theme I see continues to revolve around what, where, how and why. What’s the property, where is it located, how is it priced and why? There are plenty of properties that move quickly and plenty that sit on the market. They key question is why. The answer often involves a deeper dive.
For instance, a $1.25 million 3-family townhouse in Kensington saw 130 people at two open houses in a week and had 9 offers. A $1 million fixer upper in Windsor Terrace had 100 inquiries and multiple offers in 10 days. A $4 million Park Slope townhouse had multiple offers and went to contract within a few days of its first open house. I’ve seen a handful of Upper West Side condos go to contract in less than 30 days. The only thing in common in these examples is the perceived value that buyers found in a particular property in a given situation.
While there are examples of properties that are highly sought after, there are also examples of properties that sit on the market for a year or longer. The reason often involves a combination of things, like: Does the property reside in a sweet spot of the market? How does it compare to those within its peer group and how many competing properties are in that group? How is it priced and what is its value proposition? With respect to investment properties, what is its current/potential cash flow? Are tenants rent stabilized? What are levered and unlevered returns?
It's important to note that averages don’t tell the whole story. For example, when you see average Days on Market (DOM) of say 90 days for sales in a given neighborhood, that can mean some properties are on the market for 30 days and some for 150 days. When you see a market Absorption Rate of 6 months (meaning it takes 6 months to sell all inventory in a market given its current level of monthly sales), what you don’t see is the property types that consistently sell versus those that don’t.
There's plenty of value out there. All you need to do is find it!
In this month’s update, I’ve included some research on value in the current market as well as some real estate news and articles of general interest.
Enjoy and please let me know if you have questions or need assistance.