Special Report: It's a Seller's market

 

NYC’s housing market has shown signs of improvement since the start of February. This summer we are seeing a growing number of new properties originally being developed as condominiums, but because developers are seeing them more profitable as rentals they are converting them from condos to rental property. This has resulted in a shortage of new inventory in the market. I believe real estate prices have bottomed out and we are seeing a gradual rise in prices in NYC signaling that it's never been a better time to buy and own a home in the city. There are several factors that indicate NYC’s housing market is gradually recovering:

  • Apartment rental prices have been on the increase since the summer of 2011. Prices today have exceeded their pre-2007 highs. Currently the average listed rent for a one bedroom in Manhattan is $3,304, which is up from just a year ago. Currently vacancy rates are below 1% throughout the city.
  • This year notable new development condominiums that were meant to hit the market, converted into rentals such as Mima Tower (460 West 42nd St.);- developed by the Related Group, developers of the successful Time Warner Center, and the Mercedes House (555 West 53rd St.) which were both converted to rental properties because of the exceedingly lucrative prospects as rental properties.
  • The weakening of the U.S. dollar has made buying properties an attractive option for foreign buyers more than ever, who are coming in with all cash offers, many times exceeding even the asking price.
  • Mortgage rates are at an all time low, making borrowing money to buy a new home extremely lucrative. Look at these current numbers:

With rentals being at an all time high, and an influx of foreign buyers, the market has seen more buyers than can meet supply, especially in New York City. My recommendation for anyone looking to buy is to have realistic expectations with ongoing market conditions. Gone are the days of really good deals. In today's market, it is the seller that gets to dictate the selling price. Don't mistaken me, there is still a lot of inventory, but not good inventory. Those that are good investments, good locations and those that make great homes are scarce; expect to pay top dollar for them. In Manhattan, you can expect to pay anywhere between $850,000 to $1,000,000 dollars for a one bedroom in a new development condominium. Therefore, my recommendation to you, if you see something you like, put in your offer immediately if you are serious. Chances are they won't stay long.

The Modern Agent's outlook on the future: It will take years before NYC housing supply meets demand. If market forces stay constant, prices will continue to rise for homes in NYC. Just last week, the penthouse at City Spire was listed for $100,000,000 dollars. Listings such as this show us that the luxury real estate market is on the rise. These kinds of properties are more valuable and worth more than they ever were, indicating a strong demand for luxury homes. If however, you are looking to rent in NYC, expect an all around price increase similar to much of the other cities in the U.S. Make no exception; summer 2012 is a peak season for rentals; particularly in NYC. Moreover, the increase in property sale prices, the emergence of new foreign buyers within the U.S. real estate market, coupled with the weakening of the U.S. dollar, is foretelling; indicating the upward gradual revival of the real estate market in one of the most desired zip codes in the U.S.; New York City.