It’s a buyers market. So should you drop everything and buy, buy, buy?
In a buyers market, there are more homes for sale than there are people shopping for homes. Hypothetically, this means that buyers have the upper hand, since there are plenty of other choices out there. But is it a good time to buy a home just because it’s a buyers market? Should you rush to buy right now?
It’s a Buyers Market, but Is It a Good Time to Buy a Home?
Does a buyers market always mean it’s a good time to buy? In today’s climate, one could argue that the current glut of housing inventory — StreetEasy’s Q3 2019 market report indicates that NYC sales inventory is close to an all-time high — makes it an outstanding opportunity for buyers to scoop up property.
“The inventory gives buyers a wide selection,” say Julie Newdow and Mark Landisman, senior global real estate advisers at Compass. “It lets them get all the attributes they’re looking for while maximizing their ability to negotiate.”
Brooklyn 1-2BRs Under $800,000Article continues below
Kensington
215 Parkville Avenue
$570,000
2 |
2
Kensington
415 Beverley Road
$515,000
1 |
1
Prospect Heights
167 Park Place
$650,000
1 |
1
Park Slope
925 Union Street
$629,000
1 |
1
Clinton Hill
185 Clinton Avenue
$799,000
1 |
1
Borough Park
1238 63rd Street
$638,000
1 |
1
Cobble Hill
175 Amity Street
$765,000
1 |
1
Brooklyn Heights
25 Remsen Street
$650,000
1 |
1
Flatbush
3215 Avenue H
$525,000
2 |
1
Downtown Brooklyn
215 Adams Street
$519,000
1 |
1
Bushwick
1255 Bushwick Avenue
$599,000
1 |
1
Sunset Park
420 42nd Street
$519,999
1 |
1
Kensington
215 Parkville Avenue
$570,000
2 |
2
Kensington
415 Beverley Road
$515,000
1 |
1
Prospect Heights
167 Park Place
$650,000
1 |
1
Park Slope
925 Union Street
$629,000
1 |
1
Clinton Hill
185 Clinton Avenue
$799,000
1 |
1
Borough Park
1238 63rd Street
$638,000
1 |
1
Cobble Hill
175 Amity Street
$765,000
1 |
1
Brooklyn Heights
25 Remsen Street
$650,000
1 |
1
Flatbush
3215 Avenue H
$525,000
2 |
1
Downtown Brooklyn
215 Adams Street
$519,000
1 |
1
Bushwick
1255 Bushwick Avenue
$599,000
1 |
1
Sunset Park
420 42nd Street
$519,999
1 |
1
Kensington
215 Parkville Avenue
$570,000
2 |
2
Kensington
415 Beverley Road
$515,000
1 |
1
And if you’re interested in new construction, you might be able to snag a great deal in a buyer’s market, says Debra Shultz, senior mortgage banker at Citizens Bank in Manhattan. “With lots of new construction on the market and sponsors motivated to move inventory, some might offer to cover the NY State & City transfer tax, and sometimes even the NY State mansion tax, as an incentive to buy in their building,” she says.
Will Prices Continue to Drop?
The high inventory is promising for buyers, but whether or not now is the right time to buy also depends on whether prices have stabilized or are still falling. With the economy and politics in an unsettled state, some experts believe prices are going to drop further. Grant Long, StreetEasy’s senior economist, is one of them: “We can expect to see prices continue to fall through the course of 2020,” he predicts.
Newdow and Landisman agree — depending on the apartment. They’ve seen co-ops on the Upper West Side under the $999,000 price point not only have their prices firm up but sell for over asking price, with multiple bids. On the other hand, they say, Upper East Side homes at prices up to $4 million are languishing on the market for more than 150 days, despite being discounted 10% to 15% from their values two years ago. And new developments downtown are facing similar issues: These apartments will require further reductions to sell, they say.
Regardless of what type of market you’re facing, there are many things to consider before you commit to a purchase. Ask yourself these key questions before deciding to buy, says Shultz. And if you don’t like the answers, hold off — buyers market or not.
For a condo, assume 10% to 20% for a lower price point, and up to 50% down for a higher price point in a swanky neighborhood, Shultz says.
Upper West Side and Upper East Side Apartments Under $1MArticle continues below
Lenox Hill
304 East 65th Street
$925,000
1 |
1
Yorkville
345 East 93rd Street
$575,000
1 |
1
Lenox Hill
400 East 70th Street
$895,000
1 |
1
Yorkville
239 East 79th Street
$900,000
1 |
1.5
Carnegie Hill
17 East 96th Street
$925,000
2 |
1.5
Lincoln Square
130 West 67th Street
$750,000
1 |
1
Lincoln Square
44 West 62nd Street
$650,000
1 |
1
Lincoln Square
150 West End Avenue
$725,000
1 |
1
Upper West Side
225 Central Park West
$535,000
Studio |
1
Upper West Side
127 West 86th Street
$750,000
1 |
1
Upper West Side
18 West 87th Street
$725,000
1 |
1
Lenox Hill
205 East 78th Street
$850,000
1 |
1
Lenox Hill
304 East 65th Street
$925,000
1 |
1
Yorkville
345 East 93rd Street
$575,000
1 |
1
Lenox Hill
400 East 70th Street
$895,000
1 |
1
Yorkville
239 East 79th Street
$900,000
1 |
1.5
Carnegie Hill
17 East 96th Street
$925,000
2 |
1.5
Lincoln Square
130 West 67th Street
$750,000
1 |
1
Lincoln Square
44 West 62nd Street
$650,000
1 |
1
Lincoln Square
150 West End Avenue
$725,000
1 |
1
Upper West Side
225 Central Park West
$535,000
Studio |
1
Upper West Side
127 West 86th Street
$750,000
1 |
1
Upper West Side
18 West 87th Street
$725,000
1 |
1
Lenox Hill
205 East 78th Street
$850,000
1 |
1
Lenox Hill
304 East 65th Street
$925,000
1 |
1
Yorkville
345 East 93rd Street
$575,000
1 |
1
Are your employment and salary stable?
“If we move into a recession, could your employment and/or salary be affected?” she says. “Make sure both are stable and high enough to comfortably afford your mortgage payment for years to come.”
Is your credit where you want it to be to obtain a favorable interest rate?
Ideally, she says, you don’t want to owe more than 30% of your maximum credit limit.
Will you have a cushion?
A good rule of thumb is to have six to 12 months of mortgage payments and carrying charges in liquid reserves, Shultz recommends. “Rather than throwing down every penny you have, keep a little cash in the bank for a rainy day, just in case.”
