Market reports, anecdotal data and the media have all pointed to the high-end market having picked up. The increased activity we’ve been seeing has been greatly fueled by a preponderance of all-cash buyers. They have been coming out of the woodwork both out of necessity and negotiability.
- On the necessity front, today’s tight financing environment has most affected the jumbo loan market segment, forcing high-end buyers to put 50-80% down towards the purchase of their new home.
- On the negotiability front, with so many buyers looking to squeeze every last possible dime from the price of the property, an all-cash offer commands some level of discount versus a financed one. All-cash offers have been favored in bidding wars particularly by those sellers wishing to avoid the months that often pass between a signed contract and closing due to bank hurdles.
It’s the cash in the equation that has helped the luxury market segment gain some footing over the last two quarters. Looking forward, we’re waiting to see how deep NYC’s pockets are in terms of continuing the support of the high-end market.