The Market Report: September 2023

Move Quickly. Or Maybe Wait.

Every real estate market we navigate poses various and fluctuating conditions, different than the market from which we just emerged. There’s no one size fits all scenario for buyers in a particular market. “Buy now - Don’t buy now - Sellers are negotiable - It’s super competitive right now - You might as well wait - Rates are high - Rates will come down – Move quickly - Wait.” Yet that’s typically how we hear people discuss real estate market conditions, usually reiterating the generalizations of what they’ve read in major news media or from moderately informed friends or strangers at cocktail parties.

The New York City real estate market is not a single market. Sure, it can be generalized; but it is not a suburban cul-de-sac with near uniformity. Our metropolis operates as many, idiosyncratic, often divergent markets. And there are many kinds of buyers seeking many kinds of properties, with many different purchasing scenarios to consider. So, if you’re looking to buy, or enjoy giving advice to friends or strangers at cocktail parties, here are a handful of potholes we are seeing buyers stumble into right now:

Obsessing over interest rates.

This past month we hit the highest interest rates on a 30-year fixed mortgage since 2001. For perspective, we can look at the market in 2008. The market conditions and factors were different than today, but the rates weren’t all that different. And a lot of people were buying, and a lot of people refinanced 12, 18, 24 months later. And a lot of buyers did well on their purchases. Today, a lot of buyers are arrested to move because of interest rate levels. See farther and take advantage of that. When other buyers aren’t buying, there is less competition and potential to lock in a desirable price and then refinance into a different mortgage product and rate down the line, likely in a few years. But you can’t change the purchase price down the line.

Not doing due diligence and disclosure when mortgage shopping.

Speak with various lenders regarding various lending options prior to home shopping. Speak to smart, experienced lending advisors. If one of them tells you after a five-minute phone call what kind of product, rate and amount you qualify for, pick the phone back up and call another one who tells you that you need to put some work into the qualifying process. You need to disclose financial information, have your credit run and give them the full picture to properly assess your situation. Then, when you get accurate, educated advice on what kind of mortgage you can obtain, make sure you and your real estate agent are staying on top of the situation with that lender or lenders. Products and options change as the market shifts. Stay abreast of them.

Thinking nationally, not locally. Very locally.

As mentioned, New York City is really a collection of markets. Yet, even when you read or watch New York City based major news media regarding real estate, they are most often reporting on the nation’s real estate market in general. New York City is one of the most resilient and reliable real estate markets in the world. Investors from around the globe put money in our market. That isn’t to say now is or is not the right time to buy for any specific buyer. But work with an agent who knows and can educate on the neighborhood you are hoping to purchase in. Friends and relatives who dispense real estate advice may be well-intended but not well-informed.

Not seeing the forest for the trees.

Whether it’s taking more time to shop and consider or subconsciously allowing emotions to cloud perspectives, many buyers are nitpicking properties, potentially ruling out ones that ultimately could be good fits. Perhaps the kitchen isn’t perfect, but swapping out the appliances and counter tops next year could make it perfect enough. The floors aren’t the perfect stain, but a rug is going to cover a lot anyway. And so on. But the view is amazing, the layout and location are excellent, and the size is just right. Some things you can’t change. See the forest.

Now may or may not be your time to purchase. If it is your time, put yourself ahead of others who are clouding their perspectives and hindering their success and offer yourself the advantages this market offers.