Guzman on keeping fear and rates out of buyer conversations as prices rise and sales fall in Q3
New York buyers are paying more for fewer homes. Combine that with a higher rate environment than at the start of the year, and buyers are asking difficult questions of agents and brokers.
Manhattan's median price rose 8.9% from a year earlier in the third quarter even as closed sales fell 12.1%, according to a new report from Christie's International Real Estate New York.
One real estate executive says the people advising those buyers, whether they’re mortgage brokers or real estate agents, should leave the fear out of the conversation.
Kevelyn Guzman (pictured top) is regional vice president at Christie's International Real Estate New York, which operated as Coldwell Banker Warburg until recently. She said the first step is how advisors talk about the market.
"Don't come from a place of fear," Guzman told Mortgage Professional America. "A lot of the agents sometimes like to talk about how interest rates are high, and everybody wants to know. It's like when you go to a dinner party, and everyone is at the table, and everybody's asking, ‘Well, how's the New York City market? And do you think it's the best time to buy?’ It is always a good time to buy. Always."
Keep fear out of it
Guzman described the market as balanced right now, neither a buyer's market nor a seller's market, with limited inventory. Supply is tight in Manhattan but not in Brooklyn.
"The best thing that you can do for your buyers or even your sellers is figure out what they're looking for and move forward with that," she said. "Keep moving forward and advise them that it's always a good time to buy because, look, those that bought six months ago before we saw that slight interest rate increase are probably thinking to themselves, 'We did a good job.’
“As an advisor, provide your buyers and sellers with as much information as possible and try to move away from the fearmongering."
Guzman stressed the importance of having local knowledge of the market, because NYC provides some unique challenges that can influence how buyers move forward.
"We do have buyers at times that come back to us with their own comp report because they pulled it from AI,” she said. “And what we say to people is that every building in New York City offers something completely different that sometimes, even through the board approval process, AI can't help you with that part of it. AI doesn't know whether or not a board is flexible, or what kind of board is in every building. This is why it's important to work with an advisor in New York City, because 75% of the buildings are co-ops."
Timing is the next question for clients, with the holidays ahead. Rates remain elevated, with the Mortgage Bankers Association (MBA) reporting an average 30-year contract rate of 7.49% this week. In addition, Freddie Mac’s 30-year rate rose to 7.40% on Thursday, a seventh straight increase.
"The final quarter is always tricky because you have so many holidays," she said. "There's this phenomenon that always ends up happening where agents want to see what happens, or they take a property off the market because of the holidays. I do believe that we will see that in the month of October, possibly November, and I think things will start to slow down in December. Will we see the same thing we saw in Q3? I don't believe so, but we're optimistic."
What the report shows
Christie's Q3 report puts Manhattan's median price at $1,285,000, with 3,196 closed sales. In Brooklyn, the median price rose 7.5% from a year earlier to $1,150,000 and closed sales fell 20.8% to 2,487.
Inventory fell 12.5% year over year to 6,040 listings in Manhattan but rose 4.3% to 3,807 in Brooklyn. The figures come from UrbanDigs data as of Sept. 29.
Manhattan homes spent 62 days on the market, down 29.9% from the second quarter. The average discount from list price narrowed to 3.54%, down 0.6 points from a year earlier.
"The thing that really stood out is how resilient the Manhattan market was in Q3," she said. "Despite the conversation around interest rates, buyers are clearly still interested in the New York City market."
The quarter had two headwinds: higher mortgage rates and the city's well-documented pied-à-terre tax.
"Regardless of the rates, regardless of the pied-à-terre tax debacle, it just says that buyers are still very much interested in New York City," she said. "And they haven't disappeared. They're a lot more discerning, but they haven't disappeared."
She said one of the biggest keys to getting deals done, especially in the current market, is that the seller needs to make sure their property is not priced too high.
"The path to a deal is much clearer when a property is priced and positioned correctly," she said. "Given the lack of inventory, it's definitely something I want to highlight, because we find that sellers believe that it's a seller's market, but at the end of the day, what's going to get your property sold is when it's priced correctly."
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