Knowing When To Ask Top Dollar
A: With all the talk recently in the blogosphere about flipping and stubborn sellers, lets take a look at the other side of the coin and discuss how buyers can find a great deal and then ask for top dollar later. The quick yet very difficult solution for buyers becomes: BUY A WRECK ON THE BEST BLOCK POSSIBLE, IN THE BEST BUILDING POSSIBLE, WITH THE BEST LIGHT & VIEWS POSSIBLE, WHOSE MONTHLY EXPENSES ARE BELOW $1.50/sft. Everything else can be fixed.
When it comes to real estate investing you must keep emotion out of your decision-making. You will probably find 'your emotions' as the most threatening feeling when deciding whether or not to go for it! You must clear your head, put all your other stresses aside, and figure out whether this home is somewhere you can be happy living in and appealing to others when you go and resell.
The 2 best permanent features of any apartment that will ultimately allow you to ask top dollar when you go and resell are SUNLIGHT & VIEWS. Don't worry about the rest of the features you may have been hoping for. If you wanted a working fireplace or a roofdeck but stumbled upon a great value property that is a total wreck with great sun and city views, TAKE IT! Chances are you won't own this property forever but will prove to be a great investment for the time period that you owned it for.
I'll tell you this straight from my experience in the field of NYC real estate sales: Buyers LOVE sunlight and views. I've had clients who were adamant on living in Greenwich Village and wouldn't even look at a listing outside this neighborhood. That stubbornness took about 4 weeks to shake off. The reason is that there still is NOT that much inventory out there. The good products, that is any unit priced right and features great sunlight and city/park views, are moving quickly while the cookie cutter units that are just like everything else out there is not. My conclusion, units that are properly priced to begin with and offer good sunlight and views are not lowering their prices as often as dark units and are experiencing less time on market. Go figure. Those are two fairly significant fundamentals that are currently affecting sellers in today's market (price cuts & time on market).
So, you have to look for the features that will help move your apartment faster and at the highest price possible. I didn't include LOCATION in this list because I think today's market is very different from the NYC housing market a few years ago. So many neighborhoods changed over the past 3 years or so that buyers are effortlessly expanding their 'grid', so-to-speak, of where they would consider living in. This consideration of multiple neighborhoods is making LOCATION not as important as it once was; I didn't say not important at all, just not as important as it used to be. At least this is my train of thought. As a result natural sunlight and views take center stage. It is now these two apartment features that buyers are looking for; and rightly so.
Tell me if I'm wrong? If any buyers are reading this blog and like the topics that are discussed then you are the perfect person to speak out on the comment thread. Has the frustration of not being able to find what you want caused you to expand your 'grid' of where to buy in? If so, then why? Do you now look at light and views as the deal maker or breaker, or is it some other apartment feature?
Whats great about my job is that every experience I have, whether from a buyer or a seller, is a learning one in which I can realize a new lesson or change in the current market. If I learn something while out with a buyer, I can flip that around and advise the seller on what may help get them the best profit at resale. And that is exactly what I'm seeing right now. Buyers are more stubborn, or WISE, I should say as they look to spend their hundreds of thousands of dollars on a property that will ultimately give them a profit at resale. This lack of umph, for lack of a better word, makes buyers patient and sellers frustrated.
Here is one unit that will certainly demand a premium at resale; the question now becomes how much of a premium. Look at these incredible Central park views:
80 Central Park West
Size: 950 sft
Marketed By: Toni Haber of Elliman
*NOTE - This is by no means cheap and is a great example for this post. The incredible views and natural sunlight allow the seller to price at the high end. Will it sell at this price point; no I dont think so. Its still a one bedroom apartment that because of its configuration really cannot be converted to a small 2BR for marketing purposes, but what sets it apart besides the location is the gorgeous views. I would think $1.3M for a list price and $1.15M or so for a one time bid would make this a pretty good deal for both buyer and seller. If the seller gets $1.2M or higher than I think they should take it without thinking twice.
If there is ever a time to get a deal on housing, its during the downtimes. Use your judgment, leave your emotions at home, have the vision to see past the wreck or work needed, and focus on natural sunlight and city/park/courtyard views and you should do just fine regardless of the housing correction currently underway.