1. Bears will always be bears: Many bearish voices in 2009 were calling for the NY Real Estate market to fall off a cliff … at the very least for prices to drop another 20%. In 2010, feverish discussions continued on StreetEasy and Urban Digs, making the case that the downturn seen to date was only the beginning. And yet few could argue that things have not at least stabilized, if not improved, as compared to 2009 – some may even call it having formed a bottom.
2. Deep discounts are so 2009: No longer could buyers negotiate 10-15% off asking prices. No longer would new development concessions include everything and the kitchen sink. Buyers felt a sense of disbelief in having to often pay full ask, sometimes even engaging in bidding wars in what they thought was a buyer’s market. This was the result of too many would-be-buyers chasing too few properties. Good inventory was hard to find in 2010.
3. A deal is not a deal until a signed contract’s in place: Although a very questionable strategy, to be sure, this year was the year of multiple contracts being sent out by sellers to hedge their bets after hearing of so many deals that fell apart due to financing issues.
4. Parallel offers help avoid attachment: Frustration rose for many buyers who had accepted offers on the table, only to then find out the seller reneged and sold the apartment to someone else. In turn, buyers began negotiating in parallel to avoid putting all of their eggs in one basket.
5. New developments come with their own headaches: It used to be that buying new meant buying better quality than an older building would offer, saving you money by not having to fix the apartment’s infrastructure or renovate its looks. Yet many new buildings drew a flurry of lawsuits due to shoddy construction and cut corners. It paid to do your own due diligence about the developer and the building’s reputation.
6. Easy money is dead: Getting qualified for a loan became the biggest obstacle to getting a deal done in 2010. Buyers had to have great credit, great debt-to-income ratios and click their heels three times while repeating “there’s no place like home” to get a mortgage. (Even then, signing a contract without a mortgage contingency was akin so Russian Roulette.) If they looked to get a Jumbo mortgage, then they had to throw in a sacrifice to the mortgage gods to make the mortgage go through.
7. Technology rules (to a point): So many buyers leveraged the internet and its real estate advances this year. They became expert at finding the right properties, researching them, comparing them, and using the information at their fingertips to fuel their negotiation strategies. The frustration kicked in when sellers budged no more and buyers realized that real estate is not such an efficient market, neither on the buy nor sell side of the equation.
What do you think we missed? What lessons have you taken away from 2010? We’d love to hear from you!
{ 3 comments… read them below or add one }
What I think you missed is the absolutely essential role of qualified real estate agents on both the buy side and sell side. Every deal these days is way more complicated than in the past from every angle. Yes, more information is online and available to consumers. But does that make them a skilled negotiator? Does that mean they have the knowledge, experience and skill to problem-solve, or navigate around, the many real issues that do come up in the course of a NYC real estate transaction? Item 1. should be “Use a skilled, knowledgeable real estate agent to protect your interests.”
Selling – yes to broker, very difficult to FSBO.
Buying – maybe if you have absolutely no time to do research or search, but not necessary imho. I have purchased with and without using a broker and find the results to be negligible. Mostly my RE lawyer helped me out with all the details, and the broker just showed up to collect the commission at closing. I wouldn’t put using a buyer’s broker in the top 50 lessons learned. A buyer’s broker is a skilled negotiator?! Don’t make me laugh!
Dude96,
Your lawyer gets involved after the deal is in place. It’s your agent who gets you to that stage. The time you didn’t use an agent, you’ll never know how much you would have saved.