What happened to the NY Real Estate Market in the third Quarter 2012? It soared!
Well, for one thing, a lot of pent up demand was accumulating during the fourth quarter while the most publicized presidential election in history was going on. At the end of the day, even those folks who didn’t live in Ohio, were so fed up hearing about the election that they would have done almost anything to have it resolved. A large part of the population that are not political junkies just wanted it over and decided so that they could make some business and financial decisions. Markets, be they on Wall Street or in the world of real estate, hate uncertainty.
Finally on the evening of November 6th, the election was decided in favor of the Democrats and even many Republicans breathed a sigh of relief. People knew that capital gains would be raised, and income taxes increased on “the 1%,” although they were not certain by how much. Consequently they were on the move to liquidate securities where they had large gains and to sell real estate and close by the end of 2012. With a rush to the finish line, attractive deals were made to accommodate sellers desired year end closing dates and as a result, a lot of inventory was eaten up. In other words, it was a great 60 day bull market in real estate.
So where does this leave us at the beginning of 2013? Now that the so-called “Fiscal Cliff” nonsense has been resolved, people have a solid basis on which to make decisions about real estate, which is positive, but guess what? The shelves in the store are bare, and buyers have Wall Street bonuses burning a hole in their pockets. Potential sellers are sitting on their hands and evaluating what is that they want to do with their homes; consequently inventory is at the lowest level since 2007. Low inventory equals higher prices and numerous listings have been bid over the asking price with many disappointed buyers left in the dust.
Lesson to be learned: timing in life is everything, especially in real estate markets. The next time listen to your agent and act when there is market uncertainty when you may need some courage to take the leap, but are likely to get a good buy.