Don't you just love buying the best quality sweater in the exact color and size you want marked down? You could wait for another markdown, but you may just risk losing out on the size and color you want most. It's almost impossible to time markets to know when they are at their very peak or when they have bottomed out. Most investor consultants warn against doing this because inevitably you will be wrong. But there is something to be said about buying into a correction or selling when the market has soared - not waiting for the exact peak or valley -especially if you are making a trade and staying in the markets.
I like buying into corrections, and in some markets, especially the very high end of Manhattan and areas of Miami and California, we have seen some notable price drops, enough so that combined with low interest rates, one can be sure that buying a quality property, with a bit of a discount with a low-interest mortgage makes all the sense in the world. I cannot guarantee that buying now will be the absolute low of the market: its very possible that pricing could go down from here. Of this I am not certain. But I AM certain that you are not buying at a high and I am CERTAIN that in some instances there are some HUGE savings to be had. I am also certain that over time the simple factor of 2% inflation will escalate pricing alone (A $5 million property subject to 2% inflation over 30 years is worth close to double due to inflation alone). We are in a bit of an uncertain moment and that also allows more negotiability: 5% is a LOT of money when you are talking in millions!
So combine a corrected market pricing-wise, with low interest rates, a strong economy, strong economic prospects, low interest rates and the ability to negotiate on price and you may just have a very solid opportunity to buy quality....on sale. Not perfect maybe, but possibly as good as it gets.....or close!
Our Take-Aways:
In short, we agree with Leonard; this could be an opportune time for buying. We have recently experienced a greater willingness to negotiate from our sellers and are finding that our buyers are happy to move forward at prices that feel fair and reasonable. For our clients who like to see the raw data, here are some important stats:
Apartments Priced Over $4M (the Olshan 2017 Annual Report):
Length of time on the market was 433 days, up from 318 days in 2016.
8% drop of asking prices before finding a buyer.
All Price Points (the Compass 4th Q 2017 Report):
4% decrease in condo and co-op contracts signed.
5% year-over-year decrease of median price of new development condos.
