A Special Two-Part Series
I recently represented the buyer of a luxury condo who paid $2.5 million less than what the seller had paid for it. At the same time, I represented the seller of a West Village co-op who netted 62% more than what he had paid.
Is it unusual that these two things could be true at the same time? Yes. But impossible? No.
We are dealing with a very inefficient real estate market in New York City — in Manhattan especially. During my first 15 years in the business, the market here acted according to much more regular dynamics. It was relatively easy to know whether you were in a seller’s market or a buyer’s market. But we are now five years post-Covid, and the reality is that the market still doesn’t always know which way it is going.
Higher price points are generally less affected by interest-rate fluctuations than entry-level sales. Certain neighborhoods, like the West Village and Brooklyn Heights, are still driven by scarcity and the cachet of some of the most desirable locations in New York – and America for that matter. And then there are buildings — or even individual apartments within buildings — that can behave completely differently from the market around them.
Which brings me back to the question I get asked all the time:
“What’s my apartment worth?”
It’s probably not what Zillow says. And it’s probably not what your neighbor’s apartment sold for either. There is a distinct story within the comparables, and it’s important to understand not just sold comps, but also what options buyers have – in your neighborhood, in adjacent neighborhoods, and yes, possibly renting as an alternative.
The price someone is willing to pay for a particular apartment can depend on things that are completely out of your control – timing, the number of buyers that happen to be looking for such a property (and conversely the number of directly competing properties for sale), taxes, buyer's sentiments related to current events, and much more. The story your apartment tells to the marketplace is not simply a number, it is a relationship with one particular buyer in one particular moment of time.
Of course, if you’d like to discuss this as it relates to your property specifically, let’s connect at your convenience. Next month, I'll continue with part two - the pros and cons of leasing your apartment.
Until next time!
