Imagine in the dating world if there was such a thing as full disclosure. That would clear the way for no nonsense romance and save single folk a lot of time. This idea may be fictional, but in real estate it is a reality. Effective January 1, 2011, New York City real estate agents are required by law to disclose, in writing, who they represent when brokering a real estate transaction. This will take away any guessing that may happen and you’ll know when the agent is in your corner. Other markets have had mandatory written agency disclosure laws in place for many years. New York is playing catch up. Here is a quick description of the agency types:
Seller’s Agent- If you are listing your home for sale, the agent you hire represents you and your best interest. Your agent has an obligation to sell your home for the best possible price and terms that benefit you.
Dual Agent- In simplest of explanations, this is when the listing agent (seller’s agent) has a buyer client who is interested in their listing. This becomes equal representation for both parties. Most sellers and buyers are cautious of direct dual agency as they think their best interest is not represented. However, the agent can effectively negotiate directly with both parties without a combative or obstructive real estate agent that may be on the other side of negotiations.
Buyer’s Agent- A buyer’s agent represents you as a consumer when looking to buy property. They ask pertinent questions, search suitable properties for you to peruse and help you get the best price and terms for a dream home. If you are shopping for a home and decide to tour open houses by yourself, the agent hosting the open house of your dreams is most likely representing the owner.
This is a brief description of agency disclosure law. Please email me at mdubour@elliman.com if you have additional questions.
Activity The volume of shopper traffic in Manhattan has been strong in February during what is typically a slow, cold month for home sales. We are seeing a mix of both cash and financed deals occurring. A motivating factor for cash buyers is the fact that cash is king once again! Some sellers who are presented with cash offers are now willing to accept prices lower than their expectations in order to exit. Buyers have this knowledge and are using it to their advantage in getting some great deals. Also, with mortgages more difficult to close, some sellers see the cash buyer as a definite. The value of not having a deal based on the results of an appraisal is now worth its weight in gold.
Buyers who are seeking mortgages are being fueled by the fact that mortgage interest rates have inched up a bit over the past month. Consumers may see this as an indication that the magic combination of low prices and interest rates is changing. This has really pushed some buyers to act now and January saw an increase in existing home sales which seems to be extending into February. However, last week, mortgage rates inched down a bit to an average 4.75% for 30 year fixed products after hovering around 5%. This is being attributed to the recent unrest in the Middle East which has caused investors to pursue safer investment strategies.
Closing Table NYC consulted with DE Capital Mortgage Specialist, Lenny Holler, who said, “My expectations are that despite the high level of volatility, mortgage rates will ultimately stabilize and head lower again, although not to the levels previously seen as recently as early November, as the economy will at best grow only at a steady pace throughout 2011.”
A driving force in home sales is consumer confidence. This is ultimately linked to the unemployment rate and this Friday, the latest numbers will be released. If you are contemplating selling your property, keep an eye on this number. Low unemployment numbers may have a positive impact on consumer confidence and create more buyer activity. The spring market is here and if you need to sell, March is the month to put a plan in place. Send me an email at mdubour@elliman.com if you have questions about selling your home.
Numbers Market statistics released from Prudential Douglas Elliman show that in 2010 the median sales price of property in Manhattan was $880,000, 3.5% above $850,000 in 2009 and more than double the $430,000 in 2001. 2010 was the second highest only to the 2008 median price of $955,000, which was considered the peak of the Manhattan market. The reason for the year over year increase was due to the shift in the mix towards larger apartment sales as the 2009 housing market, which could be referred to the “year of the first time buyer.”
There were 10,060 co-op and condo sales in 2010, the third highest total of the past decade, second only to a record 13,430 sales in 2007 and 10,299 sales in 2008. The 2010 total was 35.4% higher than the 7,430 sales total in 2009, the lowest total in more than a decade.
Listing inventory levels ended up in 2010 by 5.6% to 7,232 listings from 6,851 units in 2009. The rebound in sales activity encouraged individuals who had removed their listings in 2009 to re-enter the market. As a result, the monthly absorption rate—the number of months to sell all active inventory at the current pace of sales—declined to 8.6 months from 11.1 months and below the 9.3 month decade average. Days on market— It took an average of 119 days to sell a property in 2010, down sharply from 179 days or 2 months faster than it took in 2009. Listing discount—the percentage difference between the list price at the time of contract and the contract price—fell to 7.1% from the ten year high of 10.2% in 2009, but well above the 4.2% average of the past decade.
Check back in one month for more information on the real estate market in New York City.
-Mike DuBour
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