PropertyShark Staff 
New York’s luxury real estate market is currently seeing an excessively abundant supply of apartments with asking prices of $4 million or more. With both the sale prices and sale volumes seemingly dropping from quarter to quarter, there is considerable uncertainty in the market. A lot of sellers are going to have to accept losses or turn to exceptional and thoroughly prepared brokers if they want to sell something with this much competition going on.
We recently sat down and discussed the matter with Jim Farah, licensed associate real estate broker for Compass, to get the insights of an industry expert. A dedicated New Yorker for over 25 years, Jim has a proven track record of several hundred millions of dollars in property sales. His thoroughness and patience, combined with his in-depth market knowledge, lead to countless transactions and happy customers, successfully helping buyers and sellers alike. Read on to find out more about New York City‘s current luxury glut and what it entails.
Q: Tell us a little bit about your background and why you chose a career in real estate.
After a long career in retail and apparel, I retired and found real estate as a great post retirement career choice.
Q: There appears to be a glut of luxury condos in New York City at the moment. What do you think the reason for this is and what impact does it have on the market?
Real estate markets have cycles of scarcity and of oversupply. The current surplus is partially a result of a new declining cycle, but there are also other factors. At the high end, there are also fewer buyers from overseas — for example from the BRIC countries, as they were called.
Q: Both the number of sales and sale prices seem to continue decreasing from quarter to quarter — do you think this trend will continue in 2019?
Most of us in the business hope that we will experience a plateau in 2019 so that the decline slows down and prices and activity will be flat going into 2020.
Q: With new luxury constructions on the horizon, current sellers are offering additional incentives, such as parking spaces, to lure potential buyers to their projects. Do you think this is a better alternative to adjusting listing prices?
When the New Year is finished, I think we’ll see both price concessions and amenities included. I don’t think these are really alternatives. Prices and terms and amenities are all negotiable.
Q: Is there need for a different approach, as a broker, to deal with this much competition?
Absolutely. Agents who do not see the need to reinvent their businesses or to understand how leads are generated will not win in the end. If one has only a high-end business, one must develop leads around lower-priced property. If one focuses on studios and one-bedroom units for sale, then one should consider adding more rentals into the mix.
Q: What advice would you give to both buyers and sellers in this situation?
Don’t be afraid to negotiate and have back-up plans. Be sure to get organized at the beginning of the process, not later.
Q: Are there any other insights you would like to share?
What’s the old saying? When the going gets tough the tough get going!
About Jim Farah
Jim Farah is a licensed associate real estate broker for Compass. He offers services ranging from marketing coop and condo apartments and townhouses to purchasing multi-family investment properties. His specialty lies in managing resale listings, and his sellers entrust Jim with their New York City properties based on his highly effective marketing approach. Find out more about him here.
