Thursday, January 24, 2008

NYC HOUSING MARKET REALITY CHECK

We all know that the Euro is crushing the dollar tight now. Yesterday, the Feds gave us a belated MLK Jr day present, by dropping interest rates 3/8ths of a percent on 30 yr fixed mortgages up to $417K!

This is hilarious to me when I woke up today and heard all morning on the news and in papers about how people are worried about the economy and the housing market crashing here.


To illustrate how ABSURD this talk is, I have quoted one of my mentors comments below which REALLY makes you realize that now is the time! Get in while the getting is good!!!

I got my real estate license on 2/1 in 1982 when I was a 21 year old senior at Cornell.

The first house I sold the buyers got a mortgage at 16.5% 30 year fixed.

I came to Manhattan in the fall of 1984….the first apartment I sold had a mortgage at 13.5%

I bought a home in Rockland County in 1987 and was very happy to get a mortgage at 11% fixed.

For a large part of my career I never dreamed that we would be able to work in an environment with interest rates below 10%.

With current interest rates at around 6% or lower for 30 year mortgages can anyone really say the sales market is tough??? Hello?

I worked through and survived the real estate depression of the early 90’s…..it was TOUGH! This market is NOTHING like the market boom of the 80’s that resulted in the stock crash of 1987. Manhattan is extremely popular now. Look at the articles saying that the suburbs are losing people to the CITY! Young families want to stay in the city more and more these days. Crime is way down from the past. NY is the financial capital of the world….arguably the closest thing this earth has to a world capital.

NY has the lowest rate of home ownership of any city in the country. More people rent here than anywhere else. We have a Manhattan rental vacancy rate of about 1%??????? There is no over supply of housing….not even close….nor could it happen anytime soon. The dollar is low, making Manhattan very attractive to foreign money and other countries have made it easier for people to get their money out. We have advantages that no place else in the country have!!!!!!!!!!!!!! The island is not getting any bigger…..Manhattan can not sprawl out like other cities…only up! Manhattan is a tiny little island full of the wealthy and they move all the time! Aren’t you glad you are here……..no other area of the country has not suffered…..we are in a unique situation!!! There is no better place to be in real estate! People get frustrated with me because I don’t worry about our market…..I’M SORRY!!!!

They told me to worry after 9/11. They told me to worry in early 2003. They told me to worry in January of 2005. They told me real estate was going down for sure in 2007. What happened….Manhattan real estate has been going up since 1993 despite what they all said. Citi agents sold $1 Billion worth of real estate in 2007! I don’t know what is going to happen…..I predict stable prices this year but it really doesn’t matter to me. We will still make a living. What we do is very honorable….we help people find a good place to live!!! No matter what people always need a place to live!! What would happen if prices went down 10% this year? Well, the reality is that there probably would be MORE transactions and more listings. Do you have to change your business plan? Not if you have been listening. We teach you to focus on buyers who: Have the money and you know how much. Have a valid reason and time pressure to buy. Are loyal to you and you have a good vibe from them. In a declining market the advice is the same!

With Sellers do the same things….focus on people that need/have to sell…..it’s simple. Pay more attention to price reductions as opposed to new listings but the principles are the same in any market. A market correction would not be a bad thing!!! Stronger agents will prosper and the incompetent would leave the industry.

What if the ice on Greenland melts and the Atlantic Ocean rises 50 feet? My advice would be to move to higher ground! I’m sorry but I’m not worried…..we’re all going to do just fine in 2008 whatever the market does! This is a real snapshot of over 18 years of experience in the NYC real estate market. It gives you a great view on how silly the talk of a "CRASH" in the housing market here is. If interest rates have fallen over 10% in 18 years, I think it is safe to say that we are in a GREAT buyers market and ironically, it is also a STRONG market for owners and investors looking to unload if they are savvy!

The construction sites you see going up all over are 95% Condominiums. This makes the people selling older units have to really rethink their asking prices or risk having a property sit on the market for so long, it gets what I like to call the "bruised apple" syndrome. NOBODY will touch it because it has sat on the market for so long, it's bruised! This will force owners looking to resell to do one of two things if they are smart, price accordingly or price a bit lower to create interest. This is a unique time in our lives and I can not stress the importance of being in touch with someone who is sociable, in the know, forward thinking and yet conscious of the current times.

That's where I come into your lives. You know who I am and how to reach me!

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