We are currently in an intriguing market. It will be interesting to see how this plays out over the summer, usually a slower time in real estate. Numerous factors are at play including the European and American economies, historically low interest rates, a nervous equities market, and wariness on the part of both buyers and sellers.

For example, buyers are now more suspicious than ever of a good deal and are more rigorously analyzing all aspects of the agreement and making more demands. Yet, supply is down. It seems that human nature and a risk aversive mentality have taken over from the law of supply and demand.

A couple of recent experiences illustrate part of this:

• A prospective buyer, after agreeing to the terms of the sale, brought in an engineer who raised questions about radon gas emitting though the marble countertops in the kitchen. The buyer then wanted to take off an additional $15,000 from the agreed to price.


• I had another sale for an apartment whereby the asking price reduced from over $1 million down to $995,000. We subsequently got an offer accepted at $895,000 that included $10,000 for a decorating budget on behalf of the buyer, whilst waiving the state and city transfer taxes. The buyer still then sought more concessions.

Why is supply down? Development has slowed, few projects are being completed and even fewer are in the pipeline. The inventory of the newer condos built early in the decade is nearly absorbed and even Class C buildings are being picked over and bought out. What is left for the most part are resales for buyers: those who benefited from stock advances since March 2009, Wall Streeters with bonuses, renters, newly married and young couples starting a family, and those who want to trade up. You would think it would be a sellers market; but the market psychology says differently. It’s a paradox.

I find that potential sellers do not want to sell in what they perceive as a down market, thus withhold from listing their homes. This helps create the lack of supply. In this environment, however, a good property opportunity takes precedence. Priced correctly, these units can fetch at ask and above, settling at a very solid price. There are prospective buyers who see great opportunity in this market. Bidding wars are returning for some properties that are priced realistically.

• A convertible two-bedroom in a 400-unit downtown condominium received multiple offers at the asking price.


• A two-bath, two-bedroom resale on the West Side had two people biding above the asking price in a best and finale sale.


• A Classic 7 on the Upper East Side priced at $2.875 had a bid of $2.7 million in two days.

Market psychology often is driven by forces outside our control. Our real estate market here in New York is actually holding up much better than the large majority of the country, emphasizing our uniqueness. What does this bode for the immediate future? As we discussed, the right deal is available for those who are realistic, both buyers and sellers, and those who have faith in the market. Actually, sanity and value have returned after the “fantasy” market we experienced earlier this decade. This summer will be an interesting time to see how active the market remains. With interest rates, as low as they go, we believe this market could continue well into the fall. On the high end, this may be a bit different causing a bit of a pause in confidence. That being said, buyers who have purchased now will be handsomely rewarded in the future…whether they believe it or not.