Affordable Manhattan apartments under $500k?

Given the recent turmoil in the real estate markets, we sought the advice of three Certified TopAgents who specialize in affordable and entry-level Manhattan homes/apartments:

Gary Brynes, The Corcoran Group: A Manhattan real estate agent since 1975, Gary has helped hundreds of clients buy and sell entry-level homes.  With over 1,500 career transactions, Gary is one of the most experienced agents in the city. At Corcoran, he has been a Multi-million Dollar Circle Award winner every year since inception.

Michael Steinberger, Charles Rutenberg Realty: Prior to becoming a real estate agent, Michael was a top mortgage banker.  His expertise obtaining financing is particularly important to first-time NYC buyers who are stretching their limited savings to maximize the home they can purchase.

 

Rosemarie Gambetta, CitySites: 95% of Rosemarie’s business is representing buyers, making her a true “buyer’s broker.” Rosemarie focuses on first-time and entry-level buyers.

 

What are you seeing in the entry-level market these days?

Brynes: The under $500k market has been the most solid aspect of the market.  More transactions are being completed in the affordable sector than in any other and I think that the value might have held more for homes under $500k than in other price ranges.  People want to buy now because rates are low and they think it’s a good time to buy, but for some people, the discounts that they need to buy are so great that buying simply is not possible.

Steinberger: The market for entry-level Manhattan homes has certainly picked up.  Prices are still negotiable but good deals aren’t going to last because the market is extremely deep. Unlike in other price ranges, you don’t need to make millions of dollars a year to buy a $500k apartment, so there is a large buyer pool.  Since this is the entry-level price range in Manhattan, it’s where most buyers start their search.

Gambetta: Depending on the neighborhood in Manhattan, there are lots of low-priced studios and one-bedrooms available. In some of the fringe neighborhoods, you’re even seeing two bedrooms in that price range.  For the most part, there are more co-ops available for under $500k than condos, but there is definitely inventory available.

For buyers, are there deals to be had in the under $500k price range?  If so, what do you have to do to find them and lock them up?

Steinberger: Now is a good time to buy a Manhattan home for a few reasons.  First, rates are still very low – around 5%. A year or two ago you would have paid 6%, so rates are very attractive.  Second, there are some tax credits currently available, but they are about to expire, so buyers should take advantage now.  Essentially, if a buyer is purchasing their first home within the past three years he or she may be eligible for up to a $8,000 tax credit. The market is improving but there is still some fallout from the recession, so there are still opportunities for buyers to find a great deal for “inexpensive” Manhattan apartments under $500k.

Brynes: Prices are lower than they have been for quite a while so now is a good time to buy. That said, finding a “steal” in Manhattan is extremely difficult because of the breadth and depth of the market.  There are values to be had, however.  You have to be patient in your search but when you do find a good value, you have to move aggressively because other people are looking for these values as well.

Gambetta: Unlike when the market was at its peak, there are some great opportunities out there at the entry-level end of the market.  Buyers who were priced out of buying homes a few years ago can now find apartments in Manhattan for the right price.  With the current state of the economy and market, deals are getting done and they are in the buyers’ favor.  There is negotiating room in the price, concessions and the transfer tax.  A good agent will put together a strategy that gives you the best chance of finding the right home at the right price.

What advice would you give to a seller listing their home for under $500k?

Gambetta: Pricing your apartment is critical. If you are basing your pricing on the old market, be prepared to have your home sit.  You also should be prepared to reduce the price several times in order to reflect the reality of today’s market. I advise my sellers to price their apartments realistically in order to drive foot traffic to the apartment and create momentum. I’ve seen bidding wars break out within the first week on properties that are initially priced lower than others.  You don’t want your apartment to become stagnant.

Brynes: I would advise sellers of homes under $500k to price their home aggressively because the competition is tremendous.  By aggressively, I mean that sellers should not price above the market.  They shouldn’t price below the market either, but if you price above the market today, the property will languish.  That’s the worst thing that you can do.

Steinberger: If you’re selling lower-priced home in Manhattan today, a seller needs to know that they’re going to get lots of first-time or entry level buyers, many of whom are not qualified to buy. To actually close the sale, sellers should look for buyers who are pre-qualified for a mortgage because you don’t want to go into contract with a buyer only to find out they can’t get financing. That puts you back at square one.

Where do you see the under $500k market in six months or year?

Brynes: You need a crystal ball to know where prices will be in the future, but I don’t think the market will go up significantly because I don’t see great things happening in economy and jobs within the next six months to a year.  If we start seeing good news in the economy and jobs, we will see an uptick.  As of now, though, I don’t see the market shooting up.

Steinberger: I think the entry-level market will stay stable. I don’t see prices increasing or decreasing much.  The market is very deep – I’m seeing lots of transactions, lots of volume being done at this price point.  Lots of apartments are moving and homes that are priced well are going quickly.  The under $500k price range is probably the most stable price range in terms of where prices will be in six months to a year.

Gambetta: I see a bit of a bounce. There are definitely buyers out there looking for deals but they’re taking much longer to make decisions.

For profiles and reviews of top agents that specialize in helping clients buy or sell affordable (under $500k) homes in Manhattan, visit TopAgentGuide.

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