TRANSCRIPT

Susie (00:04):

Hi everybody.

All (00:06):

Hi.

New Speaker (00:08):

Today for REal Talk. Yeah. We have some guest stars, some good friends out in Brooklyn, Meggie Simmons and Nigel Hall of the Hall/Simmons Team at Compass. And we haven’t talked to you guys together in a bit. And so we thought it’d be a great time to get an update on what’s going on in the New York city market, particularly in Brooklyn and nearby. It’s been the last time I think we talked to you, you guys were kind of sitting tight because you were not deemed essential workers as we were in New Jersey. So that’s how things have changed since then.

Meggie (00:50):

We’re back in business. Yeah, no, we, it was a, it was a long time ago that we last spoke and you know, things reopened in the small ways, starting in June of 2020. And then we saw the summer market kind of open cautiously and things ramped up as the fall went on. And then starting January, January of 2021 to now, it’s, it’s just been pretty full on is the best way I can think to describe it. There’s been enormous amounts of activity. We’ve had bidding wars and pretty much every segment of the market last spring, very limited inventory and huge buyer demand. So it was a very aggressive situation for buyers, a very great situation for sellers. Yeah. And as we head into the fall, I think that things have…

Susie (01:53):

I’m sorry. That was so real. I love it.

Meggie (01:56):

Sorry… What do you need?

Susie (02:01):

This is live people! This is live.

Bonnie (02:06):

This is life at home!

Susie (02:06):

Couldn’t have staged that better. While Meggie’s dealing with that, Nigel, maybe you could just speak to also the rental market. You were talking about how much that’s changed last year. I remember people talking about how you could actually get a really good deal on rentals in Brooklyn, right? People were actually moving back?

Nigel (02:25):

Yeah almost giving apartments away. Now it’s flip-flopped and it’s kind of crazy. It was almost overnight like someone flipped a switch and extremely competitive. The incentives have all but gone away. And even to the point where, where thereare bidding wars you know, I was representing some tenants the other night showed up at the, at the listing. See if people outsidethey had two units available in the building. We went inside one unit didn’t even have working lights. The electricity was off and everybody had their iPhones out and add the lights on with our iPhones and kind of walking around in the dark, stumbling around. And I’m sure they got tons and tons of applications for it, but it’s just been extremely competitive. I think a lot of people are getting called back for work. People are, are moving around and kind of upgrading their apartments, trying to look for bigger space some outdoor space, maybe laundry, certain features that they want in addition to I think some of the buyers also are entering the rent rental market just because they’re getting burnt out on lack of inventory and the competitiveness of, of buying in the city.

Bonnie (03:37):

So when you said multiple bids are they asking for like your highest and best offer even on a rental?

Meggie (03:43):

Yes, that’s been happening.

Bonnie (03:45):

On listed price?

Meggie (03:46):

Yeah.

Susie (03:47):

And are you finding that the prices are kind of back to 2019 prices or still not quite back there yet.

Bonnie (03:55):

Or higher I’ve heard higher

Meggie (03:58):

I’m told it was going…Yeah, I would say they’re at or higher than what they were in 2019.

Susie (04:06):

Which I find sort of puzzling, I mean, it feels like such a return to normal that isn’t quite, we’re not quite normal yet. You know what I mean? So it just, it feels like a disconnect to me. I mean, people are not normal. I mean, like, it’s not like we’re out of the weeds entirely with COVID, so, but people are feeling optimistic enough in the city or is it just the numbers? Like there’s just enough volume that they can drive all that.

Meggie (04:37):

You know, I think on the sales market side even last spring, a lot of what we saw was people who had kind of seen even in the spring or early summer of 2020, like maybe now is a really good opportunity or maybe it’s a terrible decision to buy when we don’t know the fate of New York, but that seed had kind of been planted of like, maybe now is a good time. And then come spring 2021, they saw that window of opportunity closing and thought, oh, I really need to make a move now. And I think also the pandemic has forced people to reevaluate how they live. And so it motivated a lot of people to make a change that maybe they’d been thinking about like Nigel said, they want that office space or that outdoor space. And so you know, they, after a year of having their kids at home for school, they decided it’s time to just go for it and dive into this market, whether it be buying or renting a new space. And we just haven’t had the inventory to keep up with it.

Bonnie (05:42):

Yeah. We’re seeing that in New Jersey, as far as a lot of people want to move up their house, upgrade, and all of the last year and a half, no one has really been able to upgrade because of the lack of inventory. And now that we’re seeing a little slower we’re not seeing as many people from the city come out in droves like they were before. And I feel like some of the local people now are feeling that they have an opportunity to maybe buy that, that move up house. So we are seeing more movement internally than we’ve seen in a while. Which speaks to that same thing. People here are re-evaluating is my house big enough? Do I have enough space for that home gym or my work from home space? And so people are upgrading….

Susie (06:29):

They’re the same people who were having to compete with people buying those upgrade homes as their starter homes, because they wanted more space than they would have, like back in 2019 or earlier. Right. So they were buying the million dollar homes rather than the $600,000 homes. And so our upgrading buyers in the suburbs who don’t want to compete like that, right. They’re not as desperate and they also feel like they’re a little bit more savvy about this local market. They didn’t want to jump in and be like, no, I’ll pay $1.2 million for that. So they kind of just all sat it out. And now they’re starting to be able to go back into that search finding homes. So then we can finally sell their smaller homes. So that’s been good.

Meggie (07:17):

Interesting. So you’re seeing your buyer demographic shift to a more local people who were kind of cut out of the market a little bit in the pandemic craze.

Bonnie (07:25):

I would say it’s not entirely shifted. We definitely get a steady stream of people coming from Brooklyn, Manhattan, Jersey city, Hoboken, that’s still happening,

Susie (07:36):

But it is back to more like 2019. Yeah. Then to 2020.

Bonnie (07:42):

Yeah. And we’re definitely seeing a much slower fall than we had last fall. Last fall was like a continuation of spring market. Like you said, it was nonstop from June for you guys until now are we were busy through the winter and spring and summer. And then it really slowed down a lot in August. And we are seeing new buyers out or an inventory is dripping out slowly, but it feels more like a traditional fall market than the March.

Susie (08:13):

We’re also seeing I realized some people who moved out from the city to a rental. So like we had open house recently and there were a good handful of people who are locally renting because they couldn’t buy anything last year, but they wanted to get out of the city. So they go one step closer and now they’re ready to buy.

Speaker 4 (08:36):

Yeah. Interesting.

Bonnie (08:37):

Yeah. I will add the low, I mean the low interest rates are also fueling buyers. People who know or who are aware of the current interest rates, I’m sure you guys are seeing that as well. Trying to beat, you know, they’re saying these interest rates are gonna go up this year, sometime in the year. And so it really is, even though prices are higher, it really is a good opportunity right now to get a mortgage.

Meggie (09:03):

Yeah. I think we’re seeing it. We’re kind of in an interesting place. I was even speaking to one of our lenders yesterday about it of the market was so hot that I know we have several buyers who have said, okay, I’m going to take a, I need to take a break from this. You know, you can only go through so many rounds of highest and best before you need to take a break and reevaluate. And so we are seeing somewhat of a slow down and, and the, even the contract signed pace has been slowly declining throughout the fall. Like you said to a bit more of a traditional fall market. So the pace of things is slowing down and the inventory is coming on at a slower speed as well. And so we’re in this weird space where there’s a margin of opportunity providers that wasn’t there in the spring, but they’re also feeling that burnout and hesitant to dive back in. So I know we’re trying to have those conversations and encourage people to take the opportunities that are there now leveraging interest rates while they remain low and see that it is, it’s not a drastically different market, but it is a different market from the spring. So it’s a good time to still be out there and to be looking.

Susie (10:15):

Definitely.

Nigel (10:19):

We’re having to, you know, work with sellers kind of temper expectations of that, you know, sellers that are coming onto the market right now expecting to have a crazy bidding war on their property. You know, that’s kind of died down and slowed down. So we have to temper those expectations. In addition to that, there’s a lot more demand for two bedrooms over, over one bedroom. So one bedrooms are, tend to tend to sit a little bit longer than the two bedrooms are.

Bonnie (10:47):

Everybody needs at least an office right now, right?

Meggie (10:50):

Yeah.

Nigel (10:50):

Or a home gym.

Bonnie (10:53):

Or a home gym.

Meggie (10:53):

Yeah. Yeah. And I’m sure just like with your market, you know, it’s really, we always say when people ask what the market’s like, we always say, well, what part of the market, which says, you know, it’s so different. It depends. What are you looking for? And so even with townhouses, we’re seeing that the, if you have a pristinely renovated townhousethey’re selling extremely quickly and they’re going to highest and best. And that has continued since the spring, but townhouses that need work are sitting longer. They’re harder to sell because people are hesitant to do work right now. Because it’s such a tricky thing to do right now with the supply chain issues. And so, so with those types of properties, there is still opportunity. Yeah, so it’s really, and then, like Nigel said, one bedrooms are sitting a lot longer. They’re harder to move right now. So there’s opportunity there, but two bedrooms are still pretty competitive. So it’s, yeah, it’s really knowing what segment of the market you’re looking in.

Bonnie (11:57):

What would you say is the hottest neighborhood right now of the neighborhoods you guys serve? Is there like a hotspot right now?

Nigel (12:06):

I kinda think you know, it really depends, you know, we’ve had an influx of people coming in from Manhattan and they don’t know Brooklyn as well, so they kind of willing to disperse and go into, into different neighborhoods. I think, you know, those neighborhoods that provide easy access to the city are still hot. Like, you know, you have your Brooklyn Heights Carroll gardens, Cobble HillGowanus has come along quite a bit. Park slope remains hot. So those neighborhoods that kind of string along there and allow people to get in downtown Brooklyn for people that are looking for luxury condos.

Meggie (12:48):

Yeah. I wouldn’t say this spring, I saw Prospect Lefferts Garden got really competitive. I think people who are priced out of areas like Park Slope, but still want to be along the park and have that same brownstone, limestone feel have been migrating toward Prospect Lefferts. And yeah, we had several buyers in competitive situations there this spring. Which was, I know a first for us.

Susie (13:18):

Yeah. I think we’re seeing the same thing here because people are still attracted to the train line towns, but because not everyone is returning to the office, at least immediately, they are much more willing than they used to be to look at the sort of outskirts of our towns. So Union, Springfield yeah. You know, we get a lot of like, well, we’re open. We don’t have to stay exactly. And, you know, Maplewood, South Orange, Montclair. So it’s been, it’s been interesting to see that dispersion. Yeah.

Meggie (13:52):

So what would, what would your advice be to people who are considering, you know, I moved to south orange Maplewood for need to get our year straight again, 2022.

Bonnie (14:07):

Yeah. It’s, everyone’s forecasting it to be another great year for prices to continue to go up for the interest rates there. They’re still historically low, even if they come up another half point or something. I, our advice to people is if you are looking now is a terrific time to start to get to know what areas you like to start coming out and looking there is way less competition right now than there will be in February, March our spring market, traditionally ramps up Super Bowl weekend. And then if people are rabid after that. Pretty crazy for several months, you know, March, April, may, June are really crazy. So if you can, you know, get out of your lease or carry two places for a few months, it might save you money in the long run because there are not necessarily deals to be had, but you couldn’t get a house with competing with two other people, maybe two or three other people versus competing with 12 other people. And that really drives our prices way up. So…

Susie (15:12):

Right. Yeah. And we always say you know, the people that are selling in the fall and winter are generally people who need to move.You’re not putting your house on in December, if you don’t have to sell your house. So there’s the psychology behind the fall winter sellers that can appeal to buyers who are really motivated to be more intentional about when they’re buying their house and more flexible. Maybe they don’t have you know, they don’t have to work around the school calendar quite the same, or they’re willing to do whatever is necessary. It can definitely be a better time, but no matter what, it’s a good time to be talking to us just because we can educate them about the implications of buying now versus buying later or some of the pros and cons and just start to get them looking at homes so that they have a better sense of what they’re looking for before. You know, everything kind of goes nuts.

Bonnie (16:13):

We do see a pattern with a lot of buyers that they come out and let’s say they see the perfect house on their first trip out here. A lot of them are hesitant to go ahead and make an offer because they’re like, well, it’s only the first time we’ve come out and, and then come, you know, two months down the line, they haven’t been able to win any bids. And they’re like, shoot, we should have made an offer on that first house. We could have gotten it. Or it only went for such and such a mountain. We could have afforded it then. So that’s another reason to start looking. Now you get an idea of what you want so that when more inventory does start coming out in February and you see something you like, you’re prepared and ready to pounce on it, right. Missing that opportunity cause you haven’t been in it long enough. Yeah.

Susie (16:59):

The other piece, I think it’s cute. I’m curious to see if this is what you’re experiencing this in New York as well, but we had across the board, I think in towns, in Essex county, we saw like a 15% price increase last year, which was, you know, we had seen four to 5% year over year before that. And so 15% is really significant. And so all the list prices went up by that much, but buyers still have it in their heads that the list price that they see on MLS or Zillow is then the base point from which they’re going to have to offer another a hundred thousand dollars, which may be not the case because the prices have gone up so much that the competition doesn’t look exactly the same as it did when it was another 10% less to begin with. Does that make sense?

Susie (17:44):

So we’re maybe getting four offers instead of 15 offers because the list is higher to begin with. But you know, a lot of buyers feel like, well, I can’t compete at that price, so I’m not going to bother, whereas we can tell them, no, no it’s a higher price to begin with. So you’ll probably have less competition. It’s worth it to try for that house. Every house that we saw today on our agent, you know open house previews was definitely priced higher than it would have been a year ago. Absolutely. Yeah. I’m curious to see what they sell at.

Meggie (18:21):

Yeah.

Nigel (18:21):

We have a buyer we’ve been working with and you know, initially when they were putting offers in, it was like, you, you just can’t compete. You know, everything’s at the top of the game, but now the offers that they’ve put in have been extremely competitive and they’ve been in the top running, you know, they lost one because they lost to an all cash buyer and they were financing. So it’s kind of that curve has kind of started to taper off a little bit.

Meggie (18:47):

And I think we have seen, you know, pricing was tricky here because we did see a dip summer 20, 20 prices did drop and people were getting their, you know, COVID rates on things. And so when we went into the spring market, a lot of the comps that we had for appraisals and for listings were from that period and it did skew the prices lower. And it led to all kinds of situations because in the spring and early summer things weren’t appraising because we didn’t have the comps. So people were offering appraisal gap coverage and you know, waiving mortgage contingencies in order to get through those hurdles because there was such a disparity between what things listed at versus what they sold at. But I think as we go into the fall yes, prices have risen, but they’re more on track with what the market can bear right now. So there’s not yeah, similar to what you said, Susie. It might still go slightly over, but it’s not like you’re out by $200,000 right. Of your price range. Yeah.

Bonnie (19:58):

The moral of the story is we always say you’ve got to be in it to win it. So it sounds like that’s the case for New York too. It’s like, just try, you got to put your hat in the ring or else you’ll never know.

Susie (20:09):

Yeah. Well then talk to an expert who’s watching the market every day and every week so that we can tell you, you know, which house is worth competing for which isn’t and you know, we can help predict, although we don’t have a crystal ball, we can at least advise on what we’re seeing.

Meggie (20:27):

Yeah, exactly. Yeah.

Bonnie (20:29):

Awesome. Well, thanks so much for filling us in on everything and we will include your contact informatio in our link and everything. And we’re always happy to see you guys!

Susie (20:39):

And Arturo’s is open so you gotta come out.

Meggie (20:43):

Yeah. We’re due for a trip out there. Thanks for having us. It was great to chat.

Nigel (20:50):

Thanks. Great to chat again.

Bonnie (20:52):

Take care.

Meggie (20:54):

Bye-Bye.