Let’s make a deal (in Paris)
It may have snowed in Paris on March 12th, but the Paris real estate market is ready for its annual spring takeoff. Where do things stand for the interested buyer? Miranda Bothe of Paris Property Group gives tips for a successful approach to finding a great Paris apartment.
Last year’s mix of a worldwide financial roller coaster, sellers trying to cling to record prices, and President Hollande’s perceived “just say no to millionaires” campaign led to the Parisian real estate market being delicately poised. The market was primarily made up of situational transactions – relocation, inheritance, divorce – while purely opportunistic sellers with the time to wait stayed on the sidelines. The number of Paris real estate transactions was down 25% for existing properties in 2012, as compared with a year before.
This reduced supply was key to Paris prices holding steady in 2012: without a glut of properties on the market, interested buyers had less to choose from. Thus despite gloomy forecasts, prices dropped on average less than 2% citywide, and still rose slightly in the most sought-after neighborhoods, such as the Golden Triangle, Saint Germain des Pres, the Upper Marais and the best of the 7th arrondissement. Mortgage interest rates at their lowest since 1945 are keeping buyers actively looking for the right opportunity.
So what’s the buyer plan for spring 2013? Here are a few things to keep in mind to put together the right buying strategy:
- Listing agents have to work harder to make the sale happen, and the result is they are more receptive to accommodating buyers, rather than being dismissive. A more comfortable position than having to grovel for a property visit.
- Time on the market for property sales nearly doubled as compared with 2011. That doesn’t mean they don’t sell, and if they are priced right there are enough savvy buyers out there to know it. But it does mean that even the more desirable apartments are for sale long enough to actually get in to see them. This is even true in the hottest neighborhoods, particularly for properties over 1 million.
- Willing to go for a first floor, north facing, or a courtyard view? The less-than-perfect opens a good opportunity for negotiation. A recent article in l’Expansion confirmed that this is particularly true in neighborhoods where prices have softened the most (5th, 8th and 18th). Buyers can negotiate up to 10% off even a “correct” asking price for all but the most desirable properties.
- Enough cannot be said about fantastically low interest rates – fixed and variable in the range of 3-4%, as reported in l’Express recently. Owners are actively renegotiating their loans, and anyone looking to buy in the next 2-3 years would do well to take advantage of the opportunity while it lasts. Buyers who don’t need a loan or are willing to waive the loan contingency on the purchase are perfectly positioned to get the best deal.