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How can I negotiate a good home price in a weakening market?

Real estate sales in Manhattan have plunged in the first quarter, marking the most significant sales drop in nearly a decade. Luxury homes in the area are now thought to be selling at their lowest level in at least six years. This weakening of what was thought of as an untouchable New York City real estate market reflects consumer uncertainty over the new federal tax law and fear surrounding the swaying stock market. Our Staten Island, New York real estate attorneys explore the recent real estate correction and how you can use a weak market to your advantage.

Manhattan Real Estate Sales Slow

A recent report from Douglas Elliman and Miller Samuel shows that 2,180 home sales occurred in this quarter in Manhattan. This figure is 25 percent lower than last year, when 2,892 homes sold during the same time period. Along with a decline in sales, real estate prices in the area have also faltered. The average sales price in Manhattan fell eight percent from the first quarter last year.

Luxury homes have been more heavily affected than the rest of the real estate in NYC. Prices for high end apartments in Manhattan fell 15 percent and sales are down 24 percent when compared to last year. Even further, these homes are now taking more than a year and a half on average to sell.

This weakening of the market is thought to be linked in large part to the new federal tax law. President Trump’s tax reform has limited the state and local tax deduction. New Yorkers, who pay some of the highest state and local taxes in the nation, will now only be allowed to deduct $10,000 from their taxes. New York, California, and other states with high property values will be most affected by the tax reform bill.

Thriving in a Weakening Market

For home buyers, especially those seeking high end properties, now is an excellent time to purchase a home. Home buyers can use the down market to negotiate the price of a high end property. Start by gaining a thorough understanding of the market value of homes in your area of interest. Homes that are overpriced or have been on the market for some time may be willing to come down off the list price to make a sale. Avoid low ball offers that could cost you the deal and enter into negotiations with a clear sense of what you want to achieve.