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The Off Market Real Estate Flywheel

The Off Market Flywheel is Turning

In Manhattan, we are in a heated real estate market. Manhattan inventory is at near-decade lows. The market is flush with a pool of frustrated buyers who have been ready, willing, and able to purchase except for the fact they can’t find what they want or can afford. They are watching interest rates creep up, their purchasing power bleed away, and many are getting outbid on the properties they wish to purchase, only to start searching all over again.

We are once again seeing buyers get priced out of the market. Markets do what they do: cycle through ups and downs.

And this is where we are seeing a resurgence in the buyers who may have at one point tried to tackle the market on their own. Now, instead of hitting StreetEasy, they are searching out great buyers agents who can find them what they are looking for (off market).

off market

Private Exclusives

This didn’t happen by coincidence. Inventory is tight, liquidity is high, and Compass now has a Private Exclusive offering.

Private exclusives are most easily explained as what was once known as pocket a listing. However they are distributed in the listing database but are not for public view. There are specific neighborhoods like Soho or the West Village where quality inventory is so low that many deals are happening off-market.

This is especially true on the high end of the market. But unlike the days of pocket listings, brokers on both sides represent many of these deals. Brokers are working together to create inventory and signed contracts for their buyers and sellers.

Any buyer who has lost out on a bidding war (which is most at this point) or two bidding wars is happy to pay a premium to avoid one. Sellers end up getting a premium if their property is desirable enough. The seller’s neighbor then hears about how the unit above them sold their loft “off-market” for a premium, and the flywheel then begins to turn.

At this moment, I am seeing some of the better listings on the first market surface as private exclusives.

Not surprisingly, we are seeing more frustrated buyers who once opted out of using a buyers broker in their search previously turn the page, and start working with seasoned buyer's agents. Why? Because having a seasoned broker is always better than going it alone. Having a broker on your side that is well connected and respected by their peers will get you access to properties you never knew existed.

Residential real estate is one of the most challenging asset classes to value accurately because no two real estate pieces are the same typically. Knowing when to pay a premium in this type of market is key to a successful long-term investment. It’s never just about $psf. Unfortunately, many buyers now get tripped up with past valuations instead of reading what the current market tells us.

Those who reach a bit for high quality, unique, exceptional, or real estate that offers excellent value will be rewarded 8 to 10 years down the road.

So go ahead and find yourself a great buyer’s agent and put together a team to find your dream home on or off the market.

Happy Shopping


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