Julyin or Buyin?

July 31, 2020

Whether you are in the market for NYC real estate or not, July is hot.


Julyin' or Buyin'?
Whether you are in the market for NYC real estate or not, July is hot.That is indisputable truth.Temperature can be measured.Many other things cannot.Many things, despite measured quantification, are qualitatively manipulated.I leave you to your inner meditations to connect dots on potential meanings.
BUT this is the BRIGHTER Report, and I am a realtor.You open this newsletter for the combination of objective data, subjective opinion, and irreverent phrasing. Right?Plus the wikipedia month lead-in??? Fire.Hott.Like July.
Well, are Julyin or buying?
Deals are happening, are you buying what the media pundits are selling you, or are you actively considering how to generate wealth over time through real estate?This image is for Syracuse, but it supported my point, so I used it.But i'm letting you knowlJuly is hot, but possibly not the hottest ever in NYC. So is this the hottest market ever?Most negotiable?What is true and relevant, and what is merely slung to sell a story.

In many ways, it makes sense to rent.Whoa, did a broker just say that? 

Yes, I did.If you have better immediate use for your savings than potential down payment money, whether it be for investment in the stock market, a personal entrepreneurial venture, or plain old survival in uncertain times, then it may make more sense to rent.

There are a lot of major items that are up in the air right now, and you should definitely not be breaking your back to buy, especially if it is logistically uncomfortable, or more pressing matters like your health and sanity require immediate attention and prioritization.

If you do not have an entrepreneurial venture, are worried about stock market volatility, and have down payment money, however, I would urge you to think about properly timing your purchase relative to several factors, which I will expound upon below.

I personally don't like roller coasters, horror movies, sports bets, excessive heights, and i'm not too interested in the stock market.I respect those that have a different risk tolerance profile than me, and understand that with conviction, hard work, and access to supplemental capital, many things are possible and profitable.So in many ways I am risk averse, but then again, I have no salary, limited savings, and personally believe in maximizing the present moment while investing sweat and social equity towards future earnings potential.So yeah, regardless of market stats and opinion pieces, your ultimate truth has to take into account your personal priorities and your individual/family strategy for the next 3-6 months, 2-4 years, and by extension 5-10.

Everybody is uncertain about the next 3-6 months, moving ahead of uncertainty, will put you against less competition than looking to buy what everybody else wants when everybody has a high enough comfort level to make a move.

If you don't plan on staying in NYC or simply can't guarantee that you won't be downsized or relocated in the next 2-4 years, you likely won't see short term appreciation and the cost of doing business will likely erode any potential profits if you sell before the optimum time in the cycle.Dealing with upheaval and renewal will be hard enough without having the pressure of selling on a schedule in a not yet ripe market.

5-10 years we are into the presidency after next, we should have fully recovered from immediate economic effects of covid.If a new depression causes a 2 year covid hangover, the economy should be trending towards recovery by this time.
3-6 months to see what happens with schools, economy, presidency, and Covid.

2-4 years to determine whether you stay in your current job and NYC altogether, hopefully, by choice.

5-10 years to ride the real estate cycle, normally cycles are 7-10, but the economic effects of COVID and the curative policies of the next President will likely have an effect on consumer exuberance with regards to real estate.
If you are not investing in your own business, collateralized debt, or the stock market and you have 50k-200k for a down payment, what are you waiting for?Lower mortgage rates?

Forgive me, this is not me being aggressive, this is merely a rhetorical device.

If you are in the 400k-2m Market, the market is fairly competitive.Property that is priced right is moving.If I research a property and present it to a buyer, chances are under 1.5M, that it's gone within 4 weeks.Reason being, stubborn sellers don't list, and cautious buyers don't want to overpay.This is actually a perfect storm for honest pricing.Cash is still king, and roughly 50% of NYC property is bought all cash.

People are looking, so if 5-10 buyers look and don't feel compelled to bid then the property is either overpriced, unattractive due to carrying costs, or worst case undesirable due to layout, exposure, or finish.

If you are waiting for 20% discounts, I wouldn't encourage you to hold your breath in the meat and potatoes market of 400-1.5M.

Even as a renter, I wouldn't expect a $6k lux 2 bed to rent for $4800, at least not until November. 
Why November?Holiday Season and Winter, not really due to the election.The election will likely create a pause in the sales market during October and November, with a flurry of activity in December and Q1 2021.

MultiFamily, Commercial, and Hospitality could be looking at 20% discounts, due to a combination of changes to NYS Rental Laws, widespread unemployment and an end to the moratorium on evictions.Oh yeah, and the Presidential Election.There are a lot of smaller landlords that will be forced to sell due to the unfortunate coincidence of mortgage obligations with renter defaults.Given the multiplicity of forces at play here, this is too complicated for me to get into here.No Anecdotal evidence to contribute, as my customer and client base tends to be individuals versus corporate entities.

So what's up.Where do you wanna be?Westchester, Jersey, Connecticutt, Long Island?Seller's markets.Brokers and sellers in the burbs are loving the attention they are getting from NYCers.Traditional levels of supply plus heightened demand.No 15% of New Yorkers aren't looking, but a surge of 3-10% in certain price points makes a big difference... in not NYC.

In NYC, we area city of millions, varied workers in hamster wheel orbits, consuming what we touch and believing that our personal and peripheral loops constitute a singular reality.Sorry, took subway for first time in months last week, bus for first time today.Outside of my building, my family, my ferry loop, my newsfeed (whatever that means to you),however, is real life. Like, as a whole.And as much as people love NYC for Broadway and Museums and Parks and Pizza, Finance, and Tech, there is or used to be a sense of hamster solidarity, of universal hussle, as frenetic pace that you either sought out and embraced or about faced after a couple of years upon realizing it wasn't for you.

So where are you?Who are you?What do you want, and for how long?

If you are looking to buy, sell, or rent, LMK.I don't need to do 20 multimillion dollar deals a year.I love helping the people who choose me fund their futures or at least set the literal stage for the play that is their lives.That, and like 10 solid deals is all I really need.

If you have been thinking about buying: rates are historically low, and sellers are serious, but the credit box is shrinking, and both election year trends and normal seasonal trends caution sellers against listing in Q4.

If schools are not part of your calculus, your employment is in tact, and your investment portfolio is also in tact, I would encourage you to be in contract by Mid October.(Not just because my birthday is Oct 12th)

The uncertainty and societal stress surrounding an election should affect buyer exuberance in the resale market, but may lead to short term concessions in the new development market.

Once the dust (and hot air) settles and the election has been decided, many buyers will have the confidence to move forward in earnest.Sellers, however, may need a bit more time, likely until March to start listing.

Temporally speaking, if all the If's above sound like you, August is For Action and September is for Strike Price, October you either opt-in or out, No action in November, Decide in December, but come Q1 the buyer landscape should be rife with competition.

We have many unknowns.Including COVID, political stability (not election based), and economic recovery. 
This is definitely not a time to put all your chips in one basket, but if you are able to buy in the next 2 months, I would recommend throwing your hat in the ring.

Here are some popular platitudes that support my point, which are generally inserted into conversation without all the forethought exhibited above:

Fortune favors the bold. 
In real estate, profit is made at the acquisition.
Buy when there is blood in the streets. 

I don't say any of this flippantly or without considering socio-political context, but again, this is a real estate newsletter.

As for the newsletter title.
“This above all: to thine own self be true. And it must follow, as the night the day."
So i'm sending this on the last day of July because it was hot, I got busy Phase 3 or 4 or whatever sent brokers back to work hit me in the Uber account, but it will still be timestamped July, so I made the self imposed monthly deadline, and can be honest with myself about my timing.What wil that mean for you and you housing search.What is your deadline?When does today become tomorrow?What would it mean for you to move ahead of the pack instead of with it?

A Data Analyst's Take on the Market.URBANDIGS.
While I have stuck to the once a month format for the Brighter Report, we have been having bi-weekly office sales meetings to understand both the shifting terrain and orient ourselves of the best way to make productive use of lockdown and mirror some of the social changes espoused by the recent protests.

Trust me.Only Real Estate. 
Both sales meetings presented data echoing the sentiments contained in the May Brighter Report.

BRIGHTER:Do not expect 15-20% discounts, they are more likely to be 5-7% price corrections.


MACK:“If you had to answer, the Covid discount to date has only proven to be 4 percent,” Mack said, offering ballpark figures. “It’s far from the 20-something that some people expect when they walk in.”said Kelly Kennedy Mack, CEO of Corcoran Sunshine Marketing Group (responsible for roughly 1/3 of new development condo marketing)

Most of Q4 2019 and Q1 2020 was spent advising people that it was a buyer's market.That waiting for the bottom would lead to missing the bottom and entering the market in a period of increased competition.

Post Covid, we have constrained supply and pent up demand, to the extent that it is a seller's market in pockets.Those who were waiting for the bottom, who are now waiting for 10-20% discounts will likely be twiddling their thumbs for a while. 

Being aggressive and opportunistic with respect to maximizing your discount, will definitely put you in a preferential position than those offering 10-20% under ask with no rationale.Being serious about your offer will get you the deal, those who overreach will be overlooked, as there are multiple qualified buyers for most properties.

In conducting research for several active buyers, I have found that their shortlisted properties quickly transition from available to "in contract" or "contract out." 

The early bird buyer is getting the worm, and the "stingy" seller who wants to wait for more clarity before listing, so as to maximize their price, will likely end up listing after a second wave lockdown, or in the inferior November to March Winter Sale Season. 

Sellers don't let that be you.

Sellers with properties currently on market are motivated dealmakers, and their properties are moving.Buyers, if you have the capital, have job security, and have a desire to stay in NYC, it's your time to make a move.

And if you want to leave the city, let me know, and I will refer you to a specialist in your target market nationwide.
How can I help you?
Buyers: 150k-15M. 
Renters: 1800-18k per month. 

Areas Served. 
All Manhattan.
All Brooklyn: accessible by train, 1 fare zones.
Queens: LIC/Astoria, Forest Hills, Jackson Heights
Bronx: accessible by train, 1 fare zones.

Property Types:
Rentals: Doorman, Walkup, Elevator, Loft, Townhouse
Sales: Condo, Coop, Condop, Townhouse/Brownstone
Commercial: Office Leasing, Retail Leasing, Investment Sales

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Brighter Real Estate Group
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