The 5 Things You Need to Know to Adapt Your Real Estate Strategy to The New Normal
I hope you and your loved ones are staying safe and healthy during this time.
It’s been a long 6 months of contemplation and observation while adjusting to the new normal.
The reason why I took a break from sending updates since my joining Douglas Elliman and forming The Lanyard Team in January is that I wanted to take time in assessing this new reality to present my thoughts with conviction and supporting data in the midst of all the speculation. I purposefully withheld sharing my analysis until the market reopened in early July, which allowed for the restart of in-person showings in a safe and responsible manner.
As we head into the Fall market and the fourth quarter of 2020, I am here to deliver the facts, dispel myths and present opportunities for moving forward. This message is a reflection of the very ethos of the Lanyard team—to create value and profits for our clients.
1. THE MARKET IS NOT IN DIRE STRAITS
FOR THE SELLERS.
NYC real estate has experienced depreciation all over, but prime Manhattan and prime Brooklyn are holding up stronger than outliers. As the summer comes to end, and COVID-19 cases remain low, we expect to see many people return to NYC and bring a pickup in the market. I urge you to connect with us for a detailed explanation of your particular property/area.
2. FOREIGN BUYERS ARE STILL IN THE GAME…
if you have the right connections, data, and tools. Investors, both new and repeat clients, are leveraging our marketing tools for successful remote purchases, and my phone hasn't stopped ringing with requests from from India, China and Russia. Since our marketing tools have always included property videos, 3D tours, and real-time video showings, we continue to empower our clients to fully envision themselves in the properties we market.
3. THE SUBURBAN FLIGHT IS REAL, BUT SMART BUYERS STILL (AND WILL ALWAYS) COVET NEW YORK.
If you ask my colleagues in Westchester and Fairfield counties, they are seeing significant spikes in activity from Manhattanites seeking a refuge from the pandemic. But, this does not mean that the migration is one-way. In fact, I am seeing a commensurate shift in buyers returning to prime areas of Manhattan from Brooklyn, Queens, and the tri-state suburbs.
4. THERE IS AN INDISPUTABLE LACK OF CONSUMER CONFIDENCE IN THE CURRENT NEW YORK LANDSCAPE, BUT LET ME DECONSTRUCT WHY:
Buyers are exploring options outside of prime locations (ex. Park and Madison Avenues) due to residents sheltering in place at their vacation homes;
The concept of “Location. Location. Location” is taking the back seat while buyers are considering “smart investment” strategies in other areas.
5. THERE IS NO PLACE LIKE NEW YORK.
Bankers have a saying “you make your money on the buy” and so those buyers who are in the long game in New York will be most rewarded. Transactions were down 60% for Q2 and we are seeing discounts as high as 20% from pre-COVID pricing. Once normalcy is restored due to a vaccine (among other factors), the spirit and desire to be a part of something greater will contribute to the revival of one of the greatest cities on earth. So the window for ‘COVID discount’ will not be open for too much longer.
The savvy buyer always knows not to wait until that moment to transact
This is the guiding philosophy of the Lanyard Team: we are long on New York real estate and a good part of our success has been finding our clients deals during market dips.
My mantra has always been: If you wait until the news outlets tell you we’ve hit bottom and it’s time to buy, then it’s already too late.
Additionally, many of our clients who purchased from 2010 to 2015, are now listing their properties for sale at a profit margin that is still substantial enough to warrant an upgrade to a higher price point. That is why we are on track to exceed our record far beyond $100M in profits