Home ownership is becoming more of an unattainable dream for most Americans if you asked the everyday citizen, what used to be a right of passage for most, is now presenting extreme financial burden on most families. In the past 4 years it's gotten even more worse, in areas once deemed affordable, many insiders would say the effects of covid exacerbated an already stressed industry. I have seen my own home value quadrupled since my purchase in 2018, and for no reason whatsoever, not like we suddenly had a burst of economic uptick in my area or cute shops opening instead I have seen more of the local businesses close their doors. In urban cities in states like California and New York we now have various generations living like canned sardines as rent keeps climbing and the idea of purchasing is not even part of the equation.
So what brought us here? Where are we headed? and is it real demand?
Some would argue the prices reflect the demand that the markets have with very little inventory, potential buyers are all competing that is the main driver( you know the laws of supply and demand), With a multitude of variables against the first time buyer be it inflation, high interest rates, a falling dollar or not enough new inventory being built. I had so many questions that I had no way of fully wrapping my mind around, I thought why not reach out to my very close friend Shivo Beharry who specializes in the NYC markets and is a rising star in that space. Below are his guidelines of Navigating the Competitive Real Estate Market as a New Buyer from his POV.
The New York City real estate market is legendary for its complexity, diversity, and prestige. From the bustling streets of Manhattan to the trendy neighborhoods of Brooklyn and the up-and-coming areas of Queens, the city offers a wealth of opportunities for new buyers. However, entering this dynamic market can be daunting for those unfamiliar with its intricacies. But fear not, brave souls! Even in this concrete jungle where the only thing more intimidating than the brokers are the rats with attitude problems, there are strategies aplenty for newcomers to conquer the real estate game and claim their own slice of New York pie. In this guide, we'll explore some essential steps and tips for new buyers looking to make their mark in the NYC real estate scene.
Budgeting Banter: Before you start imagining yourself lounging in a penthouse with a view of Central Park, it's time for a reality check. Grab your calculator and a sturdy cup of coffee – we're diving into the wild world of NYC real estate budgets. Warning: Side effects may include mild panic and sudden cravings for cheap street food. The city's real estate prices are among the highest in the world, so realistic expectations are vital. Consider factors such as your income, savings, and potential financing options to determine how much you can afford to spend on a property. There are creative financing options such as FHA loans, VA loans (for eligible veterans), or first-time homebuyer programs. These programs often require lower down payments or offer more flexible qualifying criteria, making homeownership more accessible to new buyers.
Neighborhood Nonsense: NYC is a city of neighborhoods, each with its own unique character, amenities, and price points. Take the time to research different neighborhoods to find the one that best suits your lifestyle and preferences. Think of it as dating, but with fewer awkward conversations and more stalking on Google Maps. Remember, finding the perfect neighborhood is like finding the perfect slice of pizza – it may take a few tries, but when you find the one, you'll know. In addition to traditional co-ops and condos, consider alternative housing options such as townhouses, duplexes, or even micro-apartments. These types of properties may be more affordable than larger condos or single-family homes and can still provide the opportunity for homeownership in the city.While established neighborhoods in Manhattan and Brooklyn may be out of reach for many buyers, there are often hidden gems in up-and-coming neighborhoods where prices may be more affordable. Look for neighborhoods that are experiencing revitalization, as these areas may offer more value for your money.
Agent Antics: Finding a good real estate agent is like finding a unicorn in a sea of pigeons – rare, but oh-so-magical. They'll be your guide through the jungle of listings, armed with insider knowledge and an endless supply of 'House Hunters' jokes. Look for an agent who has experience working in the neighborhoods you're interested in and who understands your budget and preferences. A good agent can help you navigate the intricacies of the market, identify suitable properties, and negotiate on your behalf.
Mortgage Madness: Picture this, You've finally found your dream home, you're mentally decorating the living room, and then... plot twist – you get denied for a mortgage. Cue the dramatic music and the realization that maybe avocado toast wasn't such a great investment after all. Pre-approval demonstrates to sellers that you're a serious buyer with the financial means to make a purchase, which can strengthen your negotiating position and help you stand out in a crowded field of buyers. In a competitive market like NYC, properties can move fast. Be prepared to act quickly when you find a property that meets your criteria. Have your paperwork in order, and be ready to submit an offer as soon as possible to avoid missing out on opportunities.
Be Flexible and Open-minded: Welcome to the Hunger Games! NYC Real Estate Edition. May the odds be ever in your favor as you battle it out with other buyers for that cozy studio apartment with a view of... the back of another building. Be prepared to compromise on certain features or amenities in order to find a property that fits your budget and meets your needs. Keep an open mind and be willing to consider properties in different neighborhoods or in need of some renovation. The NYC real estate market is constantly evolving, with prices, inventory levels, and demand fluctuating regularly. Stay informed about market trends by following real estate news, attending open houses, and consulting with your real estate agent. Understanding market dynamics can help you make informed decisions and seize opportunities when they arise.
Consider New Developments: New developments can offer an attractive option for new buyers in NYC. These properties often come with modern amenities, sleek design, and the opportunity to customize finishes to your liking. Additionally, developers may offer incentives such as closing cost assistance or financing options to attract buyers.
Prepare for a Competitive Market: The NYC real estate market is notoriously competitive, with multiple buyers often vying for the same properties. Be prepared for bidding wars, multiple offer situations, and the possibility of properties selling above asking price. Having a clear understanding of your budget and priorities can help you navigate these challenges with confidence.
Due Diligence Dilemmas: Congratulations, you've found 'the one'! Now it's time to dig deeper than a nosy neighbor. Think of it as a first date interrogation, but with less awkward silences and more digging through building permits. This includes inspecting the property, reviewing building financials and board minutes (for co-ops), and understanding any potential issues or restrictions that may affect your purchase. A real estate attorney can help guide you through this process and ensure that your interests are protected.
Patience Pays Off: Finding the right property in NYC can take time, so it's essential to stay patient and persistent throughout the process. Don't get discouraged by setbacks or rejections, and keep focused on your long-term goals. With determination and the right resources, you'll eventually find the perfect place to call home in the vibrant city of New York.
While the NYC real estate market presents its challenges, it also offers countless opportunities for those determined to make their homeownership dreams a reality. By staying resilient, exploring various options, and seeking guidance when needed, new buyers can confidently navigate this dynamic market and find their perfect place to call home in the city that never sleeps. Remember, Rome wasn't built in a day, and neither was your dream home in NYC. So grab a slice of pizza, queue up another episode of 'Friends,' and trust that your perfect apartment/home is out there somewhere, just waiting for you to find it.
Bottom line: the main take away from chatting with Shivo is that there's still opportunities in the market, but in order to act in time you must be ready and poised for when an opening presents itself. It's also important to note when purchasing your first home not to get bogged down about getting everything on the checklist, hell you might not even get that on your second home. What we often see is that buyers tend to look for the perfect house with the open layout, views, backyard , finishes and the cute little neighborhood etc. and will oftentimes talk themselves out of the market, as 9 out of 10 times their budget and mental abilities to be successful are not on par for a reactive market. Instead you need to enter the market as a predator looking for prey, be ready to pounce and seal the deal at the first chance you get. Keep in mind, finding the perfect home at the perfect asking price with the perfect location, 99% will never be your first purchase .
Written by Shivo Beharry
Real estate Professional NYC
Chidanand@pocketbroker.com /Instagram: @beharryrealestate
