nyc BLOG estate

nyc BLOG estate

Manhattan Real Estate Market and Mortgage Update

It has been a busy year and summer. The busiest August I can remember. Manhattan has been very fortunate this year compared to the rest of the country. Our market continues to be very strong.

The fall out from the sub prime mortgage meltdown during the last several weeks is now affecting the mortgage, credit and financial services industries. The stock market has been volatile the feds added liquidity to the markets and lowered the prime rate.

It remains to be seen what affect this will have on the real estate market in Manhattan. We still have low inventory. Most of the inventory is in new construction and there seems to be plenty of buyers interested in new development condos.

However, borrowing will become harder for many buyers as lenders are tightening their criteria for loans. The mortgage industry will have layoffs, consolidation, mergers, take-overs and bankruptcies.

It is now more important than ever for buyers to be pre-approved and to have a commitment from a lender before they start apartment hunting. The first step in the home buying process involves a good lender who will determine how much the buyer is qualified to purchase.

My preferred lender is Wells Fargo Private Mortgage Banking. For a free consultation, pre-approval and commitment contact Glen Pedersen.

All CASH and large down payments will become more important terms for sellers. A couple of weeks ago when I told a sales agent for a new development that my buyer is ALL CASH the response was "they're all cash to us" I think that attitude will change on the part of sponsors selling pre-construction.

Eighteen months from now anything can happen. Someone qualified today might not qualify eighteen months from now. Wells Fargo has a loan product specifically for new construction that will lock in a rate for a year.

When I bought in a new development on the Upper West Side back in 1989 I had to be approved by citi bank the developers lender that financed the construction. I was able to get financing from any lender as long as I was approved by citi and if I couldn't get financing from another lender I had to go through with the citi loan. I shopped around and went with the Bowery Savings they later became Home Savings of America and then it ended up with Washington Mutual.

I think we will be seeing more of this type of requirement again from sponsors and perhaps listing agents. When I list a property I have Wells Fargo pre-appove the property and provide a financial analysis for potential buyers.

If major mortgage brokers are in trouble and will not be able to fund or close on loans, I will require buyers of my listings to at least be pre-approved by Wells just in case.

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