The Summer Season Heads Towards Dusk, Upper West Side Performs.

A collective groan was heard throughout the Upper West Side office of Prudential Douglas Elliman last week as the stock market performed like the Cyclone on Coney Island. Instead of tasting sweet cotton candy after a wild ride and giggling about the head rush, the real estate market had the mouth puckering taste of a sour lemon Italian Ice.

Buyers who had been shopping and ready to make the leap, suddenly had to be coaxed back off the benches to make offers. Sellers, cautious about the market, eagerly worked with qualified buyers whose weight is worth their mortgage in gold.

This comes after somewhat of a productive summer, a traditionally slow time for sales. The Upper West Side in particular did well. The Real Deal real estate news magazine reported that "business, while not quite back to normal, has vastly improved over the last year, especially for new luxury rentals and large family-sized apartments."

The realities of the market have changed. The New York City buyer is smart and checks StreetEasy, OLR and NYTimes before even contacting a broker. Any property that is priced too high will not sell. The magic buyer only exists in fairy tales and soap operas. And like the demise of daytime drama, an overpriced listing will collect dust and become invisible in the market, leaving some sellers ready to pull out their hair.

Studios and one bedroom homes are seeing an adverse price adjustment due to the large amount of inventory. If you are entering the Manhattan market, this is where the deals are. An apartment selling for $600,000 in 2005, can potentially be listed for $400,000 today.  Investors, particularly from Brazil, are buying studio and one bedroom condos for cash, then renting them out for income.

The rental market, as a side note, has gone wild. The vacancy rate is under 1% which is making landlords attempt to recapture lost income from the past few years. Rental increases of $300-900 per month are being reported. An example of a hot Upper West Side rental apartment is this listing at 11 West 81st Street. Three doors down from Central Park, it is a one bedroom co-op renting for $3750! Click here for more info: Upper West Side One Bedroom

Banks are still difficult to deal with when making a purchase. Chase Bank recently rejected the building of a two bedroom apartment that was under contract. They had previously approved the building and then reversed the decision. Several months later the second appraisal revealed that the property had increased in value by $10,000. The buyer made money before the closing even occurred. This is rare these days but it was a newer condominium. Most newer development and luxury condos go quickly once listed. 

Come back after Labor Day and we'll see how the fall buying season starts. Enjoy the remaining days of summer.