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Not long ago, we felt that the tremor of society’s heartbeat would remain forever slow. Yet businesses around the country have started to reopen, and humans have started their adaptation process into the new normal. Hope has begun to rise.
In this new normal, our thought process when selecting a new home has dramatically shifted. We’re consciously becoming more conscious, and we find ourselves admiring things we never had before — like having extra space at home. We have been resensitized, and it’s starting to reflect on the decisions made by people buying homes. What are the new preferences that residential real estate buyers have when selecting new spaces to live?
From The Best Location To A Bigger Size
People have begun to value bigger space over a great location. New York-based brokerages are experiencing a shift in interest away from densely populated cities. Manhattan’s new listings in April 2020 decreased by 87% compared to the prior year. The number of days that properties in Manhattan stay on the market has risen by 16 days compared to 2019.
My observation is that people who once considered buying homes in the world’s most famous borough are now beginning to explore other boroughs or cities. And it makes sense given that Manhattan has the highest median list price of real estate per square foot across America. Fear and perception are also playing significant roles in the way residential real estate is behaving this year.
From Negotiating Price To Negotiating Closing Credit Concessions
A seller may not be willing to lower the asking price much, but there’s always room for negotiation in closing credit concessions. For example, a good friend of mine acquired a new home in Manhattan during May 2020. They were able to negotiate around 8% of the price on an apartment that was valued over $2 million. To add to the price reduction, the seller provided over $25,000 in closing credit concessions (rolled the common charges, supers fee and others) and provided complimentary storage with a cost of over $37,000.
Now is the time to get creative with negotiating tactics, and buyers should be made aware that having the knowledge and right person advising them may make a significant difference in their financials.
From Working At The Office To Working From Home
Going to the office two or three times a week and doing the rest of the work from home may work wonders for many. Softbank-backed real estate brokerage Compass recently reported three times as many searches for listings with a pool and double the searches for outdoor space. Those with children running around their house may feel eager to go back to the office, and children will eventually return to school. Parents, however, are beginning to find out that they could at least partially work from home.
The great realization of being able to work from home is playing a big role in the way that potential buyers select their next property. Buyers are broadening their search and considering more neighborhoods: If I’m going to spend more time at home, it’s better to find one with bigger spaces or a home office, rather than prioritizing an unbeatable location.
From Vertical Cities To Horizontal Cities
Manhattan still leads the pack as the most expensive city in the United States, which is why people whose presence is not essential in the New York office are reconsidering or being reconsidered for a relocation. This saves the company office space, which translates into money, and may decrease the risk of exposure of the employee to any virus by making the switch from a densely populated city to a spread-out location.
I’ve been in recent virtual meetings with CEOs and presidents of the biggest and most prominent brokerages in New York, and I’ve noticed that some of them have expressed their interest in outsourcing or moving team members out of their central offices if those team members are not client-facing or their presence might not be crucial at all times inside the headquarters. This move may make sense at first sight if it improves the companies’ expenditures and helps eliminate fixed costs, but whether the final result turns out positive is still to be seen, because it may also reduce important communication among cross-functional teams.
Overall, the ways people search for properties and negotiate their next home purchases are evolving and adapting to our present global circumstance. Agents who can leverage technology to help clients search for the properties they desire most from the safety and convenience of their current homes are in the best position to meet buyers’ needs. Making sure you are advising clients well is more important than ever.