What's Happening In The NYC Real Estate Market Right Now?
New year, new market? That depends on what market you’re in.
Everyone always wants to know - what’s happening in the market? The best response I can give is actually a question back: Well, what market are you in? Are you a buyer, a seller, a renter, or a landlord? There are always opportunities in every market, but the answer is different depending on what type of consumer you are.
As we start this New Year, I’ll give you a quick breakdown of what’s going on in your market:
Buyers: While prices are still high, they appear to have plateaued - and in some markets, they are beginning to fall. The all-time highest blended price per square foot was set in Q3 of 2015, but we have since fallen at least $12 per foot from that mark. Though current real estate data is always a few months behind (given closings take a month or two to occur), I think we’ll continue to see this dropping of prices. It doesn’t seem like a substantial move, but given that prices had previously increased almost every month since Dec ’09, it’s a clear sign that the peak has been hit, and we should be settling in to a more stable market.
Sellers: It’s no coincidence to me that with a stabilizing (read: falling prices) market, inventory is up nearly 5% from last year (see chart). So, so much of the booming sellers’ market we lived in for the last five or so years was predicated on a complete inventory drought. Now, new developments are taking over the world - just look outside your window - and more sellers are listing. I don’t see this trend stopping in 2016, and would say that if you’re looking to sell to maximize return, your time is now.
Renters: It’s a renter’s world and we’re just living in it. Right now, it’s concession after concession out in this market. And until March 1st or so, tenants are getting great deals. If you’re able to start a new lease in this time frame, you should get the upper hand in the negotiation. For example, BLDG, one of the city’s largest landlords is offering 1-month free rent and an “OP” (which is “Owner Pays the commission” in broker babble). In other words, not only will you get some free rent, but in a lot of cases, you don’t have to pay your agent.
Landlords: If the above text wasn’t enough, let me repeat that its not a perfect time to be a landlord. While blended and average prices are still strong, year over year, the time to offer incentives to tenants is now. If you have a lease coming up for renewal, think long and hard about a slight reduction in rent to keep your tenant happy, or at the very least, keep the rent where it is. If you have a vacancy, you can pretty much wait until March 1 to get it filled, or try to rope in a qualified tenant by offering some form of a concession. Everyone wants a deal, so you have to advertise a bargain.