With the opening of the 7 subway station at 34th Street last year, more than 100 shops and 5,000 residences, the Hudson Yards neighborhood in Manhattan is creating new demand for housing.
“We’ll likely witness a progression of rising prices as the entire development grows both residentially and commercially,” said Brad Malow, licensed real estate broker with Charles Rutenberg, a real estate firm in Manhattan.
Stretching from West 30th to 34th Streets and 10th to 12th Avenues, Hudson Yards is just one example of how supply of inventory impacts pricing in the world of real estate.
“The problem right now in the sales market is that supply is not catching up fast enough to pent up demand,” Malow told Newsmax Finance. “If supply increases and demand stays the same, what usually results is lower pricing.”
The New York housing market is very different from most others in the U.S. The vacancy rate in New York has hovered at 2% on average, according to a Douglas Elliman/Miller Samuel data and new development inventory is up 101% with supply and demand fluctuating from season to season.
That makes proper pricing important to the marketing of all types of property given the extraordinarily low vacancy rate.
“The supply of new housing is very low given the size of the market and the rental market is heavily regulated, depressing the rents for many units,” said David Reiss, professor of law with the Brooklyn Law School in Brooklyn.
To be successful, property sellers need to be educated.
“Even though they may have what they think is a unique property most buyers shop the market, compare prices and can determine a property’s fair market value,” said Jeff Johnson, real estate broker and author of Cash Flow Forever (Amazon Publishing, 2013).
With input from a representing agent and property information available on the internet, determining a property’s value is much easier than it used to be.
“Buyers today do their homework on the internet before they get out and look at properties so proper pricing based on comparable sales is really important,” Johnson told Newsmax Finance.
The goal of putting a home on the market is to achieve the highest sale price possible in the quickest amount of time. But overpricing results in a rising market when sellers push the envelope.
“Buyers aren’t fooled easily,” said Malow. “In an overpricing situation, timing becomes your number one enemy. The apartment sits and becomes what we call a stale listing.”
The seller may have no choice but to refresh the listing and continue to make mortgage payments until the property is sold after a home or building sits on the housing market for months.
“Many websites require a 30-day disappearance in order for a property to be listed as new,” Malow said. “This may end up costing the seller and isn’t worth the risk when it comes to overpricing your home.”
Pricing property correctly from the start reaps a much greater benefit than for property owners who don’t.
“When a home is priced right in a thriving market, you most often end up with multiple offers,” said Malow.