A message from The Formation Team

As we adjust to a “new normal” during this pandemic we wanted to reach out to all of you during these times to let you know that we are here and available to you for whatever you need, real estate related or otherwise.

Thank you to all who have checked in with us as well. It has been a good reminder of the importance and strength of community.

It has certainly been busy! Since the “pause,” our clients have:

• • submitted offers
  • • signed contracts
    • • engaged in bidding wars
      • • virtually closed
        • • renegotiated deals
          • • actively evaluated new deals

             
            Below are some updates on what we’re seeing in the real estate market right now.

             

            Current Market Landscape

            • Listing inventory is down 50% from last year
            • Days on Market is suspended on Zillow, StreetEasy and RLS (broker access)
            • Real estate showings have been deemed “essential” and may technically resume. However, as safety is paramount, we do not recommend showings given the current COVID-19 situation in New York City
            • It has become standard practice now to include a “force majeure” clause in contracts which allows delay or cancellation due to forces outside of the control of the parties (i.e. COVID-19).

             

             

            A Word About Discounts

            Current discounts we are seeing due to COVID-19 vary depending on the sub-market (i.e., Brooklyn less than Manhattan). Below are high-level results of a poll taken internally at Compass on activity AFTER March 15th:

            • • • • • • 50% of deals have discounts between 0-4% off of the Asking Price
                      • 25% have discounts between 4-7% off Asking Price
                      • 10% of discounts are between 7-10%
                      • 15% of discounts are greater than 10%

            This data is being compiled regularly so we can keep you updated.

             

            What Should I Do If?

             

            ​​​​​​​I Am A Seller.
            If you haven’t listed yet, hold tight if you can until we get out of the “Pause” situation. If you are already on the market, Days on Market is suspended so you can stay on market as buyers are still looking at listings, and you will want to be able to capture that traffic once the “Pause” is lifted. If you have a contract signed, depending on the legal recourse in your deal, the buyer may attempt to renegotiate as financial positions or employment may have changed recently.

             
            I Am A Buyer. 
            A flood of inventory will come to market after the “Pause” is lifted. If you have an existing deal in the works, contact us to discuss the potential to renegotiate or manage closing timeframes given COVID-related delays. Any contracts not already finalized should have a “force majeure” clause.

             
            I Am A Landlord.
            Moving services are considered “essential” so moves can legally occur. However, your building may temporarily prohibit all moves, and your tenant may or may not feel comfortable moving during the crisis. Eviction proceedings during this time are banned, and it is unlikely to be looked upon favorably in the coming months after the “Pause” is lifted, so do try to work an amicable deal with your tenant if he/she is unable to pay rent or wants to extend their lease. Contact us to help with any negotiation.

             
            I Am A Renter. 

            Tenants are still moving. About 45% of new leases are done sight unseen, so apartments are still being rented and many still need to move. The vast majority of rents are not discounted during this time.
             
            Wishing your family health and safety during these times. We are here if you need us.