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They say it's impossible for buyers to perfectly time the bottom of the market. But if waiting on the sidelines for that illusive opportunity is your plan, allow me, once again, to divulge some industry insights that will help you in this tricky game of real estate.
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Ok so the buzz of an upcoming recession is rampant. And though likely. it will probably be more of a minor fender bender that a cataclysm. Many buyers in New York are convinced that this will drastically reduce real estate prices, and that they should wait to buy until prices hit rock bottom. They are jonesing for bargains as though it's November 29th at Woodbury Commons, but they may be in for a big surprise.
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The Great Cash Accumulation of 2019
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As we speak, savvy buyers are piling up their cash, and lurking on the shadows for the bargain bell to ring. But this strategy is no longer a secret, and the number of people employing it is growing. Consequently, when and if there is a precipitous price drop everyone will end up competing with each other for the same "deals," driving the prices right back up.
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Strategy for the Non-Cash Buyer
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Now suppose you don't have a suitcase full of cash, and you want to buy a sweet little place and get a nice 80% mortgage at a historically low interest rate. Banks are lending freely right now, guidelines are lax and credit is plentiful. But you decide to wait until the news breaks and the market has tanked. Mortgage restrictions will inevitably tighten in response, which can make it more expensive or even impossible to get that loan. The cash bargain-hunters have already swooped in on that nice little condo and are in a bidding war. You know what you are now?
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Real estate prices have been gradually deflating for the last few years, so a dramatic price correction seems less likely.
Plus, sitting on large cash reserves with very low returns depletes their value AND earning potential.
The key to today's market is not waiting for bargains that may never come, but seeking out quality that will stand the test of time. This is how to make an investment that will continue to look great in the rear view mirror.
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Fall selling season typically hits high gear after the current Jewish Holidays. Coincidentally, we also find ourselves with a trifecta of record levels of inventory, negotiable prices, and plentiful mortgage options at low rates.
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1. You get the best deals when options are abundant, competition is mellow, and rates are low.
2. The more cash on standby to buy "bargains," the smaller the bargains will be. When so many people have the power to buy, the supply/demand ratios kick in and prices are driven up.
3. Prices have been adjusting for years already. A recession may not cause the dramatic deals people are expecting.
4. Follow the herd and end up with manure.
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I'm not telling you all this as an incredibly strategic way to convince you to buy some of my new exclusive listings...but here are a couple fabulous things we are currently selling.
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2 Beds plus Home Office, 2 baths. West Village Co-op asking $2,795,000
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2 Beds 1 Bath. Upper West Side co-op asking $1,350,000
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© Compass 2019 ¦ All Rights Reserved by Compass ¦ Made in NYC
Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Compass makes no representation or guarantee that Coming Soons are available in your region, or that its use will result in the benefits described herein.
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