When people think of New York City real estate, they think of prices that start astronomically and head northward indefinitely. However, a new report from Warburg Realty indicates the NYC housing market has moved—“beyond any doubt”—into a buyer’s market. Warburg’s Founder and CEO Frederick Peters cited offers as low as 25 percent below asking prices as evidence. Peters noted the last time that phenomenon was seen was in 2009.
According to Peters, “Some of these offers were even made on properties which had taken interim reductions from their original asking prices.”
Admittedly, these highly reduced prices rarely reached success. In spite of this, Peters warned the offers “signal a major shift in our marketplace, one which has been building for at least 18 months.”
Rising Inventory Meets Lower Offer Prices
The number of homes in NYC recently hit record highs as well—another indication that home prices may be cooling. As inventory volumes rise, rent prices are also likely to level off or fall. Cumulatively, these factors are contributing to longer days-on-market and fewer offers on properties for sale.
Warburg Realty’s data indicated homes listed at $1 million or more may sit on the market for more than 100 days. Homes with higher price points—the $8-million to $12-million properties—may wait nearly 200 days before selling at lower prices than owners might expect.
Exceptions Prove the Rule
Peters went on to note that New York City, like all housing markets, is highly localized.
“Of course, there are exceptions [to the emerging trends],” he wrote. “Apartments in great condition may still get several offers if priced correctly,” and certain properties in Brooklyn remain hot. However, he added a caveat even in Brooklyn: “The meaning of ‘hot’ has changed.”
Peters said prices in the area are no longer rising and may have even receded. “The property which brought 10 offers 18 months ago may not bring three.” He recommended serious sellers plan to settle on a sales price eight to 10 percent below the asking price and consider it a fine outcome.