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New York Market Shows Early Signs of Recovery

After several trying months, the New York City real estate sector is rebounding. Following the city’s phase 2 reopening phase, data sourced by UrbanDigs indicated that contract activity ramped up 41%, hitting a new peak since the nationwide shutdown in March in response to the COVID-19 pandemic. The numbers also showed the volume of new listings also jumped 57%, which is the highest mark since the first week of March.

While the total number of listings has decreased by 36% since this time in 2019, brokers are optimistic the downward trend in the city’s real estate market will be short-lived. Real estate professionals fully expect that the pent-up demand resulting from months of mandated quarantined will translate into increased transactions in the near future.

Market data compiled by GS Data Services indicates that the median listing price is approximately $1.39 million, which is 5% greater than the previous year, whereas the average price-per-foot fell a mere 3% to $1,560. Real estate professionals say this data suggests that the recovery process is well underway on the listing side and is exhibiting the V-shape trend that was expected earlier in 2020.

Other major metropolitan real estate markets are showing similar activity—particularly in Miami, which has experienced a significant jump  in property trades since the preceding year, as a large number of Northeastern residents—especially those residing in the greatly-impacted tri-state locality—opted to move to Florida in search of more favorable housing costs.

Between June 1 and June 27, a total of 217 contracts have been executed in Manhattan alone, which is 71% less than this time a year ago per GS Data Services reports. This should be unsurprising, however, considering that the city only reopened for in-person property showings mid-way through the month. Aggregated market data shows that prices have not decreased as drastically as some might have expected in light of the coronavirus. Some within the industry had speculated that listing prices would plummet anywhere between 10% and 20% according to Garrett Derderian, the CEO of GS Data Services, but those conditions simply have not materialized. Conversely, there may be a promising aspect for the significant majority of the Manhattan market as employees could potentially seek to be less reliant on public transportation options and walk for their work commute. This could ramp up demand for a significant majority of the Manhattan market and equate to increased property prices in certain neighborhood and price brackets. The same principle is applicable for central Brooklyn and adjacent communities.

If prices do eventually decrease, it will most likely be in July after there is more development in the market. Another condition that brokers find encouraging is that buyers looking for real estate appear to be fully committed to the process. Due to the short-term market uncertainty as the virus continues to spread at exponential rates, the typical profile of the buyer is one who is interested in the near-future potential and is planning on investing in the long term.

While these early indicators all point towards the market is on its way to recovery, it is undeniable that the process for showcasing and purchasing property has been altered as a result of COVID-19. Potential buyers have to jump through multiple hoops including scheduling a viewing 24 hours in advance, wearing personal protective equipment, sign off on a myriad of paperwork accepting the health risks they’re assuming and avoid coming into contact with any surfaces while viewing the property, with the seller’s agent having to open all the doors and cabinets. Regardless, industry professionals feel that New Yorkers are eager to move on with live post-COVID 19 and expect there to be a continued rampant growth in transactions in the upcoming months. Are you in the market to purchase real estate? Having an experienced legal team with a proven track record is essential for a successful transaction. At Andelsman Law, our team will assist you through all stages of the process and are committed to remaining accessible and providing you with the best possible experience. Contact us today via email (info@andelsmanlaw.com) or phone (516) 625-9200 to find out more about how we can assist you.

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How Long Will It Take for the Housing Market to Recover from Coronavirus?

This is the million-dollar question asked by both clients and colleagues. When will there be some “normalcy” in the market?

In the wake of the 9/11 attacks we saw the Fed cut interest rates, followed by consequent increases in signed contracts. Median prices were stable for around six months, before rising 11% in the following year. Within two years, the market had experienced a full recovery (and then some).

The 2008 housing crisis was a different story in terms of the severity of the situation. Following the  failure of Lehman Brothers, the number of signed contracts dropped almost 50%, and median prices were down by 10% in just the first three months. The Fed cut interest rates again, and the government offered first-time buyer credits to incentivize consumers. Thanks in part to measures like these, within two years the number of signed contracts had reached their original level, and median prices were actually 8% higher.

Now, what sets these events apart from our current economic predicament? For starters, in the previous examples there was an end in sight and a clear path forward. The economic fallout from 9/11 was a reaction to a tragic, but isolated event. The 2008 housing crisis, while far-reaching in its negative effects, was not unprecedented. Like before, the Fed has cut interest rates – and the government has stepped in to offer emergency loans to eligible small businesses.

What makes this global pandemic so difficult to predict is the sheer uncertainty of what is coming next. Industry experts have expressed that if the coronavirus turns out to be a short-term severe disruption, buyers are unlikely to see deep price cuts for a prolonged period of time. This assumes a broader reopening of the U.S. economy  in a shorter period. As business and the economy reopens, consumer confidence will rise and employment opportunities will follow. It is then we could see a normalization of the residential market. If you have questions during this time, please reach out. I would love to be a resource to anyone in the lending space who is looking for feedback on their current approach.

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Be There for Your Borrower

From a mortgage lender’s perspective, the borrowers comprising your client base are the market equivalent stocks comprising a portfolio. As such they are the most vital asset to your long-term success as a Lender. Retaining borrowers can be challenging. However, for most borrowers shopping to find the best deal is inherent in their business plan. Even borrowers who are satisfied with your services may seek more favorable terms with no forewarning. To retain your borrower base, it is essential for lenders to implement strategies and internal procedures geared towards establishing, maintaining, and retaining relationships with borrowers.

Consistent Contact = Consistent Business

Maintaining communication with your borrower base is an essential component of retaining their ongoing business. In person meetings, casual meetings for coffee,  requesting a tour of their office, or in today’s day, scheduling a zoom meeting, going above and beyond to demonstrate your commitment to them will pay dividends for you in the future. Communication is king.  Promptly returning calls, emails and texts coupled with a rapid response time to loan requests and fast processing/closing, enhances the service experience, and increases the likelihood, they will continue to choose you. Be sure to also seek out honest feedback from all of your borrowers and ensure that you follow up with those individuals or the key decision makers of those entities. Monitor social media reviews and input closely to see how you can adjust your process to fit the needs of your customers.

Add Value to Your Client Base

One of the most efficient ways for any professional services provider to establish customer loyalty is to serve as a resource and actively refer clients for value-added services. Put in the effort to be known as the go to lender in your business community. This includes encouraging borrowers to contact you for referrals within your network for other services such as real estate brokers, legal, financial, or advertising referrals. Along the same lines, consider building a community forum and forwarding members pertinent trade journal articles or regular subscription emails or establishing a loyalty program that provides member-only perks to long-standing customers.

In a similar vein, be sure to be a regular attendee at key lending industry events and conferences. Networking allows you to be ahead of the curve with the latest up-and-coming trends in the business.

If you are a lender, investor or developer and have questions about implementing processes to grow your business, please reach out. We are here for you and offer our experience in guiding your business to great success.

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Providing Counsel and Leadership – Decisions to Make in Spring of 2020

During these uncertain times, leading with experience and confidence and providing exceptional service and communication is essential. We believe that the real estate market and lending environment will return in a strong steady manner over the coming months. We draw upon our extensive experience handling significant market changes and disruptions, including 9/11, the 2008 Economic and real estate crisis, and Superstorm Sandy. What we have discovered is with each downturn and disruption, opportunities will arise. It is important to us that our clients thrive and be ready to take advantage of these opportunities. Use this time to get ahead and to create processes to ensure that when the time comes, your business is set up for success.

Recent reporting shows that over 71% of attorneys are inexperienced and unprepared for the changes that have occurred and are unable to adjust during and following a crisis. As attorneys, it is our role to provide counsel and guidance for our clients, particularly in a crisis. Whether it be a global pandemic or a daily “crisis” involving closings, corporate matters, contracts and real estate transactions, we are skilled to provide advice, counsel and leadership.

If you need answers during this time, we will guide and advise you on the best practices to move forward. We are making the appropriate adjustments to all matters to protect and best serve our clients for potential COVID related issues. Our 25+ years of experience have prepared us to steadily lead and counsel during these times. We are prepared and will guide our clients through these next steps so that all come back strong, confident and primed for success.