One of the most profound impacts of the Wall Street crisis on New York City’s real estate market is the sudden and dramatic emergence of the new buyer’s market. Virtually overnight, the advantage has shifted from sellers, who once presided over lightning-fast sales and bidding wars, to buyers, who now dictate every aspect of the transaction from the closing date to the discount off the asking price.
“It is unequivocally a buyer’s market,” said Elaine Clayman, a senior vice president at Brown Harris Stevens, who has changed up her own strategy to target buyers and deal with the new business environment.
This change is affecting every facet of the real estate industry as realtors, mortgage brokers, attorneys and developers figure out how to adapt to the new rules of the game.
In the past, for example, buyers were on their own when it came to getting a mortgage. But now, they’re finding that developers are pulling out all the stops to accommodate their financing needs. To do so, those developers are increasingly forming strategic alliances with mortgage brokers, who are taking on a greater role than ever before in real estate sales and marketing.
Meanwhile, many of these buyers are young, first-time homeowners. Once viewed unfavorably by sellers, Generation X and Generation Y buyers are now being targeted by brokers, who view them as more likely to move than their baby boomer parents, and less likely to have their equity tied up in other properties.
For their part, sellers hoping to lure buyers are now countering offers they once would have considered insulting as potential buyers put lowball bids — often 20 to 40 percent less than the asking price — on multiple properties simultaneously, a strategy that was virtually unheard of only a few months ago.
Finally, attorneys are working overtime to stuff once-boilerplate contracts with terms that protect buyers with earlier closing dates and smaller deposits.
The kids are all right
With boomers on the sidelines, the generation once called slackers now targeted by brokers.
Lowballing turns predatory
Buyers submitting offers 20 to 40 percent below asking on multiple properties seem to be accelerating a drop in prices.
More developers joining forces for mortgages
Developers increasingly rely on pairing with lenders to seal deals.
Buyers seek expanded legal coverage
Mortgage contingencies, strict closing dates just some of the clauses being added to contracts.
All stories by Candace Taylor