Right now, Manhattan real estate is, as the Italians say, l’imbarazzo della scelta. An embarrassment of choice. If we don’t learn how to better operate within it, we’re all going to drive ourselves berserk.
With inventories up nearly 27%, the highest jump since 2009, buyers are out to see evvvveerrrything. We brokers roam the city with blistered feet, phones gritted between our teeth pinging with emails from buyers about all that apartments coming on the market every second, hauling our dehydrated clients on our backs toward the mirage of that One Next Perfect Deal.
It feels like the moment a TJ Maxx opens its doors on Black Friday, and some deeply ingrained part of us driven by scarcity principle tells us there’s one incredible deal in there somewhere, some high-tag cardigan that’s been rejected by the market four times on its path to its 80% off destiny in our arms. We’ve just got to find it. We’ve got to search through the racks and the mess and try this and that and that and that and you just put your real clothes on but maybe it’s worth changing again for this one here? It’s a frenzy.
Is it worth it, or should you rather have just gone to the first round of sales at Saks?
There’s something to be said for just going for the deal, and not obsessing over the super-mega-perfect deal you’ll find or die trying. According to science, you might end up happier and more satisfied with your choice if you do.
The Problem of Too Much Choice
In his book, The Paradox of Choice and his accompanying TED Talk, Barry Schwartz argues too much choice increases our levels of anxiety, depression, and wasted time.
Firstly, as Barry says, “With so many options to choose from, people find it very difficult to choose at all.” I’ve seen this with my clients. It’s become a paralyzing choice. They’re sitting on the sidelines, waiting until even better deals can be found. These people on the sidelines think it’s only going to get worse, that the market’s going to drop.
“The second effect,” says Barry, “is that, even if we manage to overcome the paralysis and make a choice, we end up less satisfied with the result of the choice than we would be if we had fewer options to choose from.”
Once you get in your new apartment, after having seen exactly one thousand places, let’s say the faucet starts to leak. You’ll think, Maybe we should have gotten that one on E 65th. I bet the faucents don’t leak there.
The marathon you’ve taken your real estate agent on serves only as a parade of opportunity costs you can’t forget. Next thing you know you’re up late with a martini, scrolling longingly through listings while you should have called the plumber hours ago and should be sleeping soundly in your perfectly lovely apartment.
That’s why, in addition to paralysis, I’m seeing so much madness, people out there obsessing over everything that’s on the market. They’re seeing too much and they’re not listening to their agent’s advice.
While they’re looking, more things are coming on the market. They jump to make offers on multiple places, but then even more places come on the market, so they go see those. They’re still trying to get this incredible unicorn of a deal.
“Opportunity costs subtract from the satisfaction that we get out of what we choose, even when what we choose is terrific,” says Barry. “And the more options there are to consider, the more attractive features of these options are going to be reflected by us as opportunity costs.”
Here’s another important point: The more options you have, the higher your expectations creep up. Meaning you’re overall going to feel less satisfied with your choice at the end, even if you made the right choice.
The worst part? Barry says that when we’re less satisfied with what we get, even after we had so many options to choose from, we blame ourselves! How could we have messed up so bad as to get an apartment with a leaky faucet when we had a whole 2” binder filled with five hundred color-coded options?
What’s a real estate agent to do?
I am handling this by narrowing it all down for my clients. Part of our job is to buffer our clients from the emotional turmoil of real estate. Helping them find the best options and only seeing those options is one thing you can do to prevent dissatisfaction and regret.
Remember, there is always an extremely limited supply of quality inventory at a fair price in ANY market. There may be 1-2 more quality options at a moment like this, but that’s it. You are deluding yourself if you think there is any more quality supply than a few. I give my clients a smaller set of choices to help them feel like they have more time to analyze the decision, another aspect of choice that creates regret with heaps of options.
Pick 10 apartments, these are the best 10 apartments to see, and hit the road.
What buyers must do for their own peace right now.
Buyers, trust your real estate agent. You picked someone great, right? You trust this person? Help them help you.
If you don’t have a broker you trust, get another broker. If you do have a broker you trust, TRUST YOUR BROKER.
If you go for the bottom of the bin pricing, guess what, you might have gotten a great deal on a piece of crap you wouldn’t have touched in a normal market. And you’re only going to hate it (and possibly yourself) later.
As a real estate guru I get it. This is a huge decision, things are moving so quickly, and did you notice we’re all also dealing with the stress of this pandemic you might have heard about? Deep breath.
Working together, we can all make the most of the current environment of Manhattan real estate and get everyone in a place they love (and don’t regret!)
Share this article with your community: