Posted  by Leonard Steinberg on February 10th, 2013

This morning’s New York Times addresses the subject of how the low housing inventory in Manhattan is leading brokers to desperate measures to convince homeowners to sell….they are not exaggerating!

The inventory is at historically low levels, and the buyer volume is at record high levels. Open houses are experiencing unprecedented turn-outs with dozens of buyers leaving empty-handed and very few, if any prospects. Of course these headline-grabbing ‘facts’ are best applied to the better properties, priced correctly, in better buildings and locations. There are still many properties where even the most desperate buyers are simply not interested to buy. Now, would of course be the best opportunity to sell a less-than-great apartment. And the prize apartments can expect to achieve record pricing. I am seeing escalation of 10-15% in areas in 2013 …..and its only February!

BUT……before we get irrationally exuberant all over again, lets acknowledge some factors that should not be ignored: Buyers who have sat on the sidelines waiting for better clarity have stopped waiting. They are out now in full force. Sellers who were on the fence too will also come out now to make changes. I expect a wave of new inventory in about 6-12 months when those buyers who are committed to buying from the flood of new inventory coming to market sell their homes. There are areas of new development where the supply, regardless of what is built, will never cater to the scope of the audience. The West Village is a prime example. I am worried that Midtown might become over-saturated with super-luxe properties: just how many people can afford an apartment at $ 5,000+/sf? We will find out.

So for sellers who are wondering if they should ‘wait and see’ if the market continues to rise, they may want to consider  this new upcoming inventory of brand new, super-luxe properties with everything and anything, almost-certain-to-rise interest rates….and the certainty that no party lasts forever. Over the long term, there is almost certainty now that for certain types of A-grade property in certain prize locations, pricing will go up….and up….and up….