The housing market is unique for a number of reasons. The New York City real estate market is unique for a whole additional set of reasons. Both of these statements are true in a emotive, general sense but they are also true in terms of cold, hard economics.
Something that makes both of these statements true is the size of the product being sold in the housing market. And I mean size both in terms of actual size and the size of the buyerâ€™s budget. With size comes importance and illiquidity. From both of these things, in turn, come less consumer control over the market: Whatever the fluctuation in supply and demand, there will still be those buyers who will become first-time buyers simply because it makes sense for them in terms of where they are in their life-cycle.
Today, the first-time buyers that have been nudged into the New York apartment market not by investment decisions, but by life cycle effects are finding the market to be like shooting ducks in the barrel.
Not only have prices plunged, interest rates have also fallen. In the end, those two factors make up the â€œreal priceâ€ of an apartment, at least, from the buyerâ€™s perspective. Thereâ€™s a lot more thats changed about buying an apartment than just the price, however.
Instead of a process of pressured decisions, where an opportunity to get a halfway-decent deal pops up for a day or two, and the buyer has to make up their mind in a rushed fashion, the shoe is now on the other foot. Buyers can make the offers that are retracted days later, as worsening news pressure the sellers to lower the price even further.
The reality of knocking a full 20% off the asking price is becoming more and more common. Countless other signing details have become subject to the demands of aggressive buyers.
Why is this tied into first time buyers? Because these trends are most evident not in established middle value and luxury markets, but in the marginal neighborhoods at the edges of those markets, where first time buyers are most likely to look, anyway.
Of course, everything but the luxury market is taking a full-on beating right now â€“ and even the that market has become home to what would be previously incredible deals â€“ but for the typical first-time buyer, the New York apartment market is truly ripe for the plucking.