News flash for all home-buyers on the hunt in NYC: the time of the "Covid deal" is long gone. Inventory is low and the amount of buyers fighting for every property is high. It has been announced that interest rates are going to steadily climb over the next two years; the first hike is looming. So all those who were waiting for the spring market have sprung into action early, with not enough properties to go around. This means you must adjust. At every price point. You will not be able to find what you thought you could afford a year ago. Do not fight it. Let that sink in. And now let's talk about how to come to terms with that.
I don't mean to be doom and gloom. But I want to be realistic so you don't waste time having to come to this conclusion six months down the line. And notice, I'm not using that evil word in home searches: compromise. "We had to compromise and finally settled on something," said no one I've ever helped to closing. Because if you adjust your goals for your home early, it hones your search and makes the home a real possibility. That's a positive. That's exciting. So by the time I'm handing you keys, no one feels like they "settled."
It's still a good time to buy because interest rates are just going to get higher in the short
term. But you have to be smart right now. If you start your search and it becomes overly
obvious your budget isn't going to get you the space you want, you cannot hold out for that magic apartment to fall from the sky, AND for you to win the 20 person bidding war when it does. You must pivot quickly and be savvy. So how do you pivot? Here are a few suggestions for pivoting considerations:
1. My first advice is always to prioritize the things you can never change: square footage and light/views. Didn't want a fixer-upper with supply chain issues and the cost of renovations now being though the roof? I get it. But what if you found something livable for now, with the right amount of space and light, and updated it over time? You are adding resale value, or maybe you never sell and end up with a forever home. It will be more work than you wanted. But you have the possibility of creating your dream home in the future. Potential is almost always a better investment than the subpar easy choice, (ie a small, dark space with beautiful renovations. As my grandmother would say, can't put lipstick on a pig...)
2. If this is your primary home, consider coops if you aren't already. No whining about coops, I do not want to hear it! All you need to know about coops is that you get more space for your money. The rest, doesn't matter. The main headache here is for ME, your agent, putting together your board package. After you are in a building, if you like the community comes down to your neighbors. And you can never choose your neighbors, even if you are buying a house. So get over your fear of coops.
(For more on condos vs coops, watch this!)
3. Consider a different neighborhood. New Yorkers are so hood-centric. It's a tiny island, you can have the same friends uptown or downtown, Brooklyn or queens. Or even in New Jersey! If you don't like what your budget can get you on the UWS, South Harlem has more options. With outdoor space even! Every neighborhood has an adjacent area that will get you more space for your money. And the burbs are just another way of making NYC livable (see what I did there?!). Take it from someone who feared Jersey most of her life, you can be a New Yorker in Jersey. There are so many of us!
4. Don't limit yourself to your forever home. This can be a five year investment. But buying now while rates remain low and upgrading in five years, is usually a smarter path than renting for five years then buying. Something to discuss with your financial advisor. But buying for the short term can be a great option, and may afford you more options down the road.
5. See everything, and see past small flaws. Even listings that have been on the market for months. Don't assume "there must be something wrong with it". There are so many odd reasons a listing can fall through the cracks. This should be an opportunity, not a bad omen. The listing agent didn't get professional pictures? The apartment doesn't feel
instantly inviting, but there's great light, can't you put a finger on it? Maybe it just needs
paint! Some units sit just because they aren't staged. Having trouble visualizing your life
there? Before discounting it, identify why. Go a little deeper. I can vet the building, the construction costs, make sure electrical is updated, help identify what renovations are more expensive. We can do a deep dive together. And if there's an easy fix others missed? Jump on it.
Now I know this is all easier said than done. You want to walk into a place and have angels sing. I'm not saying they won't. Lord, I'm such a cheeseball, I'm the first person to tell you to hold out for the home that sings to you! I don't take that back. But right now, you need to listen harder. That's why I write this. Not to discourage you. But to encourage you to lean in.
The song is out there for everyone, you just need to work more for it. The trade off is that in the end, the song is that much sweeter. It's your home. It's worth the effort.