We’ve talked a good bit about the relative lack of inventory on the NYC landscape and the buyer frustration felt at having so little from which to choose. Alas, this frustration seems to be manifesting itself into a new trend: if buyers can’t find what they’re looking for, they’ll create it! We’re seeing a significant uptick in the purchase of fixer-uppers, with the intent and execution of a full gut job. This is contrary to what we experienced throughout 2010, where buyers were attracted to turn-key properties that required only clothes and toiletries to call them “home”.
And these properties aren’t selling at clearance prices, either, meaning that buyers are shifting down market just a tad to ensure they have enough cash in the bank to fund the complete overhaul they seek. “We’re benefiting from the significant absorption of new development condo inventory over the course of last year. Existing, non-condo listings are providing a lot more opportunity for renovation and customization,” William Rogers notes, of William Rogers Architects. “Further, the loosening up of credit markets has freed up some cash in buyers’ pockets to allocate to larger projects that wouldn’t have been considered a possibility in 2010.”
If you are sitting on a property that could use a lot of work and haven’t wanted to do it yourself, this may be a good time to feed buyers’ growing appetite for personalized design. Extensive renovations can run buyers from $150 to $500/sq.ft. on average; make sure you take this into account as you consider the price-point and competitive positioning of your property.