Buyers less frantic as inventory ticks up
With market showing signs of normalizing, there are fewer bidding wars
This year, roughly half their sales are “best and finals,” said Kromer. “There is more available inventory, so buyers are having more choices, and sellers are having to be more competitive.”
Kromer and other brokers said the sales market is returning to a more normalized state thanks to the recent uptick in inventory. That’s resulting in the diminished use of “best and final” offers, in sharp contrast to last year.
“Buyers were so frantic about competing for so few properties, they didn’t care,” he said. “I don’t believe you’re seeing that now.”
Manhattan residential properties spent an average of 5.1 months on the market during the April to June period, up from 4.5 months in the first quarter, according to data from real estate appraisal firm Miller Samuel. (While longer, that’s still below the 10-year average of 8.4 months.)
The inventory level, which reached a 14-year low of 4,164 listings at the end of 2013, also started to inch up during the quarter.
As for pricing, the median sales price of $910,000 during the second quarter was a drop of 6 percent from $972,428 during the first three months of the year.
Julia Hoagland, a broker at Brown Harris Stevens, said that the fervor of the 18 months prior to May “seems to be abating somewhat,” and buyers are more confident about their ability to close a deal. “There doesn’t seem to be as much of a manic rush to sign at all costs in record time.”
Frederick Peters, president of Warburg Realty, agreed that competitive bidding has become less intense, but only in certain segments of the market. “Prices have plateaued in the mid-priced and upper-priced market segments, though not below $2 million, where competition is still fierce and multiple bids still common,” he said.
Lately, Kromer said, some sellers have set prices unrealistically high. “You’ll only have a ‘best and final’ when the price attracts multiple interest,” he said. “If the seller is being aggressive with their pricing and is out of alignment with the market … then there’s no sense of urgency on the buyer’s part.”
Some brokers said buyers have reconsidered what they want and how much they’re willing to pay. “There’s a fear amongst many of paying ‘too much,’” Nicole Beauchamp, an agent at Engel & Völkers NYC, said in an email.
Beauchamp recently helped clients land an apartment in Brooklyn Heights after searching for more than a year and losing more than a dozen bidding wars on two-bedrooms priced between $800,000 and $1 million. She said they signed a contract on a large one-bedroom for under $700,000 with no bidding war.
Tom Stuart, a broker at Bond New York who has handled numerous sales at the Clinton Hill Co-ops in Brooklyn, said sellers there who had been routinely getting offers 10 percent to 15 percent above the asking price are now getting offers just 5 percent higher. For example, he recently sold a one-bedroom in the building, at 201 Clinton Avenue, for $500,000, roughly 5.25 percent over the asking price of $475,000. Last year, he sold a comparable unit for 15 percent over the asking price of $425,000 after receiving 12 bids.
In June, Stuart also represented a buyer who successfully bid on a one-bedroom duplex at 77 Bleecker Street in the Village, ultimately paying less than the $799,000 asking price. Although he said the open house was well attended, Stuart said his client’s bid of $775,000 was accepted. “That was a surprise,” he said. “It was the first time in a really long time that I put a bid in for a buyer that seemed appropriate and we didn’t have a lot of competition.”