WHY is it so important to price an apartment correctly in today's or any other market.
In the 1st Q of 2010, NYC is seeing an increase in property transactions than the same time, one year ago.
The absorption rate (the amount of time it would take to sell the entire inventory of apartments) was 19 months in December of '09. Now 1st Q '10- it has reduced to 9 months.
The typical (Good absorption rate) is between 6-9 months, so we have seen inventory drop.
Every year people Ring in the new year and around January 3rd, buyers wake up and say, OMG- I need to buy a new apartment and sellers say, we need to up size or downsize. This year was no different.
Our phones have been ringing off the hook and the market is moving albeit sideways.
Some new pieces of the puzzle have been added into every transaction, mainly from the banks. The banks scrutinize each individual building more and require tons more paperwork just to get to "closing."
The biggest issue right now is appraisals. Many apartments, town homes and houses are coming in at lower appraised values (compared to the selling price)and that can cause problems in a transaction.
Some buyers walk away, because of the lower appraised value and some renegotiate the price down to a lower level.
All this being said, properly pricing of your asset is extremely important, even if supply is down and demand is up.
You don't want to sell an apartment at X and then the appraisal comes in at X minus 10%. That could cause you time, money and stress. And as a person that has been in the front line of many of these types of situations, no one wants this to happen, except maybe the buyer.
If you have any questions or comments, please email me at:
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