NEW YORK, NY - Faced with market adjustments, real estate brokers in New York generally may now be divided into two types: the deniers and the fear mongers.
The first are those who walk around telling clients and all who ask that the market has never been better. They cite big Manhattan closings ($70 mil at 432 Park Avenue, for example) as indicators that real estate is continuing its record breaking streak. What they omit to say is that a number of these high-end contracts that have closed were signed three or four years ago. Both the local and global economic and political climate have changed dramatically since then. Uncertainties almost always lead to a decrease in activity and, often, lowering of prices.
The fear mongers, on the other hand, seize on this period of adjustment to scare potential clients into selling. That's because lack of activity may also mean a lack of inventory. When things are uncertain, and barring a catastrophic turn of events, owners may just elect to not make a move. And that's a problem in a city where there are more brokers than Thai restaurants and bodegas combined. Everyone is fighting even more fervently to get listings.
Increasing price reductions are often used to bolster agents' claim that the bottom is about to fall. Thus, real estate brokers suggest, owners who regard their property as their most valuable investments should think about cashing in before prices go down even further.
In Williamsburg, Brooklyn, where the main subway "L-line" is scheduled to be shut down by the MTA in April 2019, some sales agents are towing an even more dangerous line. Due to much needed repairs of damage to the East River tunnel caused by Hurricane Sandy, the transit authority and the community have come together to develop alternative plans to facilitate the commute into and out of Manhattan during construction. The result is the proliferation of emails and direct mail that are meant to scare the entire neighborhood, which might very well lead to a self-fulfilling market destabilization.
Here is an excerpt of a letter sent to area residents by an agent from one of the city's most prominent firms.
"...the L Train will be shutting down for repairs and that is going to be a great inconvenience for homeowners in Williamsburg, perhaps like yourself, who rely on this train for your daily commute. The temporary shutdown this week was only a minor taste of the major inconvenience that will be part of many people's lives for a long duration of time, however, this presents you with a window of opportunity. While the MTA has provided a 15 month timeline, we all know how quickly and frequently that changes..." (emphasis added)
An owner should ask, if the near future holds so much doom as the agent suggests, wh