How might investors or homebuyers benefit from a cooling real estate market?
New York City’s once booming and seemingly unstoppable real estate market appears to have entered a cool down. A report recently issued by Warburg Realty reveals that real estate prices have fallen between 10 and 20 percent since their peak in 2015. Since the fall of 2018, sellers have been cutting prices and accepting lower offers in order to move their inventory. Along with sagging real estate prices and higher inventories, rent prices have also decreased across the board. Even in the in-demand neighborhood of Brooklyn, rents are down year over year. For home buyers and investors, this cooling market could bring about positive returns. Our NYC real estate lawyers discuss some tips for taking advantage of the slowed NYC real estate market below.
If You Are a Buyer…
If you are a home buyer, whether you are looking to purchase a new home or apartment for your family or an investor looking to add to your portfolio, this slowing market could hold much promise for you. A weaker market means that you can anticipate more bargaining power, but you may be met with fierce competition as other buyers attempt to find the same good deals.
Start by getting your financing in place. Pre-approval or a bank letter for cash deals will show sellers you are serious. Carefully examine the market to determine what you think you can realistically offer to successfully obtain the property you want. Be ready to act quickly. A quick closing could provide additional incentive for a seller on the fence to accept your offer. However, do not forego securing a thorough inspection before your purchase.
Sellers Can Still Profit
Sellers in this cooling market could feel some stress or concern over whether they can still profit from the sale of the home. The good news is that though the immediate market has slowed within the city, home prices have been rising for years. Depending on when you purchased your home, you may still be able to make a strong profit. If your margins are close, consider whether now is the right time to sell. Certain sellers may be better served by waiting a year or so to allow the market to rebound. Of course this presumes that the market will turn around from the slowdown, which no one can guarantee. As a seller committed to the sale, you may need to be open to price adjustments, but do not feel pressured to accept a low ball offer.