Why It’s Tough to Predict the Bottom for the NYC Real Estate Market
It’s very, very tough to predict the bottom of the NYC real estate market. But when things are trending “not so great,” that means it’s easier to do it, right?
Well, not so fast. Here’s why it’s not always a great idea to stay on the sidelines and try to wait it out.
Time Lag for Data
Many news outlets rely heavily on reports issued by various sources, such as brokerages and economists. But the problem is that these sources rarely use real time data. Instead, they’re usually reporting sales and contract signings from the previous quarter.
And even if they’re reporting numbers for very recently closed sales, those deals went into contract anywhere from 2 to 3 months ago since most deals in New York City take at least 60 to 90 days to close thanks to high numbers of co-op and condo inventory.
This all means that by the time news outlets start reporting that prices are going up, the change in price trends will probably have been underway for several months.
Asking Prices Don’t Equal Final Sale Prices
Current asking prices for active listings do provide some useful information. You can use them to keep tabs on the number and rate of price chops. Once those have slowed down, that’ll give you an indication that the market is starting to turn.
But list prices aren’t necessarily equivalent to final sales prices. A seller can ask for whatever price they want, but it doesn’t mean they’re going to get it. And sometimes there is a bit of “group think” when it comes to list prices that isn’t necessarily in line with what buyers are willing to pay. You still won’t know what the final sale price is of any given listing until several months later when it closes.
This doesn’t mean you can’t still get a good deal. You can absolutely snag some fantastic prices while the market is on the upswing. But if you rely too heavily on market reports and news outlets to signal when the “bottom” is happening, you may inadvertently miss your chance.
Don’t Try to Predict the Bottom of the NYC Real Estate Market – Do This Instead
Want tips on a better strategy to snag the apartment of your dreams? Then check out my post “Trying to Time the NYC Real Estate Market? Do This Instead…”
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