There’s no doubt that we’re entering unfamiliar territory in the Manhattan housing market. In the past, New York real estate has been defined by fierce competition, scarce inventory, and sky-high prices. It has, in short, been a seller’s market. However, as the summer comes to a close, the market continues to become saturated, with record-high inventory entering the market. Today, real estate professionals are left with a new, unfamiliar landscape that requires them to reconsider their marketing strategy.
What’s the current situation?The current Manhattan housing landscape is not unheard of, but it is unusual compared to what we’ve seen in the past five to seven years. Previously speculators thought that the housing surge was limited only to the luxury market, as Crain’s Magazine recently noted, “in Manhattan, the inventory of sub-$1 million apartments surged 27% in June, the most for the month since 2013.”
This glut of homes entering the market is cause for concern among real estate professionals, who are anticipating price drops, increased competition, and choosier buyers. As of right now, the numbers are not so bad. According to StreetEasy, the Manhattan Price Index increased during the month of May—admittedly only by a fraction of a percentage—but given the heightened inventory, any price increase should have real estate professionals breathing a sigh of relief. Upper Manhattan saw the largest growth, while downtown prices have stalled out.
It’s important to note that in general, homes tend to enter the market at a slower rate during the summer, with many homeowners waiting until the fall to catch the eye of those who may have spent time on vacation. An influx of added inventory in the summer is not only highly unusual, but likely to become even more extreme during the upcoming fall quarter.
It’s a buyer’s market
Despite minor growth in prices during the summer, a market flooded with increased inventory has already led to a buyer’s market. With many more homes anticipated to enter the market over the next few months, it’s likely that prices will begin to drop significantly, especially as agents are unable to make sales in a timely manner. Homebuyers will begin to be more choosy—with more options available over a longer period of time, they will not feel pressured to make purchases because they won’t fear losing the property. More confident homebuyers will begin to negotiate prices down and agents, eager to sell properties despite less-than-ideal circumstances, will likely humor them.
The best way to advertise my properties
A buyer’s market increases the need for real estate agents to have a solid advertising strategy in order. There’s no room for sellers to cut corners when the power is increasingly in the hands of the consumer. The savviest sellers face the reality of the market. In this case, this means recognizing the reality of the buyer’s market and making some adjustments accordingly:
- If you have not had serious engagement in the first two or three weeks that your property is on the market, consider a substantial price drop, followed by an intense remarketing campaign. In a buyer’s market, these exceptional deals will allow you to stand out and reinvigorate potential buyers with a sense of interest and urgency.
- If you’re concerned about the accuracy of your price in this new, unfamiliar market, consider premarketing it. Premarketing will allow you to test the feasibility of your price in a controlled environment before revealing it to the public.
- Make sure the house is ready to sell. All amenities, furnishings, construction work, and structural issues should be resolved far ahead of time. In a buyer’s market, your goal is to not let your potential homebuyer have any hang-ups or complaints.
For the past few years, real estate agents have been spoiled in Manhattan. A seller’s market has meant buyers are anxious to commit and willing to compromise. Now, that is not the case, and agents may find issues with clients who won’t overlook anything. By facing these challenges head on, you’ll be able to succeed despite the anticipated housing glut that will define the upcoming fall quarter.