As the holiday season cranks up, New York’s apartment sales market traditionally winds down.
The good news for brokers is that those who are out Christmas shopping for new digs are serious buyers who have their eye on bagging a bargain.
“If they find something they like, they’ll go for it,” said Jennifer Wilson, a broker at Keller Williams NYC. “It’s a good time for people to move apartments, and buyers to get a discount because there’s not as much competition.”
Carol Staab, SVP and associate broker at Douglas Elliman, agrees.
“If the seller is truly ready to sell and wants to clean his or her plate, feel a sense of finished business, then they will often drop the price in December.
“It’s a mindset — the traffic drops off and there is a desire to feel finished before the end of the year, and be able to have a fresh start in the new year.ˮ
According to Douglas Elliman’s Ariel Cohen the residential market is volatile right now.
“The buyers that are looking to buy right now have to buy, and the sellers looking to sell have to sell,” he said.
An uptick in home sales in New York this year has seen inventory slide to its lowest level in several years, according to city market watchers.
The third quarter Manhattan report from appraiser Jonathan Miller shows that condo and co-op inventory is down 24.3 percent from last year. Reasons Miller noted for the change are a scarcity of new developments, many of which won’t be entering the market for another couple of years, and sellers waiting to see what happens with the impending “fiscal cliff.”
A state of the market report from Stribling and Associates released on Nov. 5, notes inventory of current Manhattan residential listings is 6,000, the lowest since the mid-2000’s.
“It’s all about inventory,” wrote Elizabeth Stribling, president of Stribling and Associates.
The brokerage believes Santa will be dropping apartment keys down the chimney of many college-age New Yorkers whose deep-pocketed parents have been on a buying spree.
According to Stribling, parents have been buying apartments for their college-aged kids at a very high rate, fueling the level of sales of studio and one-bedroom apartments.
“With interest rates at record lows, it is a far better investment for this segment of the market to buy rather than rent apartments for their offspring,” said Stribling.
Foreign condo buyers have also been on a binge and represent 30 percent of total residential condo sales this year, which is helping keep the residential market stable.
“Normally, all this should result in higher sales prices, but worry over global economic uncertainties as well as national and international unemployment continues to temper all markets.”
With the holidays in full swing, many sellers want to stick to spending time with their family, and don’t want people coming in and out of their apartment.
“What we’re dealing with right now is low inventory,” said Keller Williams’ Wilson. “In some ways it can be a good opportunity for people with apartments on the market — the competition is less.
“On the flip side of that, during the holidays, there are a lot of people who take time out from their apartment search,” as they get caught up in holiday shopping, traveling and parties.
“There’s definitely fewer people out there, but people that are looking are on the serious side,” she said.
The average price of a Manhattan property, around $1.4 million, has not changed significantly in the past year. However, the volume of sales in the last quarter rose substantially, indicating a much higher level of demand than supply.
But the soon-to-be raised capital gains tax is playing a big role in sellers’ decision-making, said Cohen.
The tax rate will revert from its current 15 percent to 20 percent, which was in effect prior to 2003. In addition, Bush-era tax cuts could also end at the close of 2012.
“I have several situations where my sellers didn’t sell this year and they took their apartments off the market,” he said. “It was a major concern for my clients. There’s a lot of situations where, if they don’t sell and close by the end of 2012, they won’t sell. The money they’ll pay in taxes is huge and extremely significant.”
So for those looking to for a holiday bargain, where is best to invest?
Go with the classics and lower Manhattan, says Staab.
“Even after the storm, Chelsea, the West Village and Tribeca are three neighborhoods that seem to appreciate very well. Then the always-classic Upper East Side and Fifth Avenue, and Central Park West, of course.”
According to real estate website Trulia, the Upper East Side is currently the most popular place to buy residential properties, with an average sale price around $2.9 million, while the Upper West Side comes in second with a $2.1 million average.
Harlem is the third most popular, with a much lower $863,000 average price, while Clinton and Chelsea come in third and fourth, with $2.5 million and $2.3 million average sales prices, respectively.
But a survey by Realtor.com hints that buyers can barter their way to an ever better deal during the holiday season.
According to the survey, 40.1 percent of respondents said holiday sellers would accept an offer during that time.
And the most recent Trulia price reduction report showed that a 27 percent of homes listed for sale on Trulia as of November 1 had had at least one price cut — in some cities, 33 percent, 39 percent — even 46 percent of the homes for sale had already been discounted by their sellers.
“Sellers who are serious about getting their homes sold are putting them on sale this season,ˮ noted Trulia blogger, Tara-Nicholle Nelson. “In most places and most cases, property taxes are determined by the price you pay for your home! So, if you get your home for a “sale” price, you’ll automatically be getting a sale on your property taxes as well.ˮ