Back HomeNew York Property on the Upswing
N ew York real estate is in a seller’s market. Although the current upswing in prices remains a cyclical phenomenon that will see its fall, experts by and large agree that now is the time to sell.
Widely referred to as the most desired point on the map to reside in by residents and foreign visitors alike, the city’s real estate is nevertheless not impermeable to the pale cheek price swings of the market, most notably, to the stock market and financial services industry. The city’s property owners hold, most commonly, an intimate relationship with these institutions.
Prices during the 2008 financial crisis were dampened, not entirely sunk below grade, but they nonetheless did not experience progressive hikes until late 2013, according to Miller Samuel president Jonathan Miller in The Real Deal. As of late, the increases have been much more sustainable. “In the context of prior booms, it feels like we’re still in the early stages,” said Miller.
Observing real estate price increases between 2013 and the current day, senior director at Standard & Poor’s Craig Lazzara gives his confidence that the recent mild hikes are “sustainable rather than a bubble,” and will support the current upswing.
Foreign investment continues to be a strong trend. Chinese buyers, whether for residential or investment purposes, have purchased $30 billion dollars of New York real estate since 2010.
While speaking at The Real Deal’s U.S. Real Estate Showcase & Forum in Shanghai, Partners Trust China’s founding partner Sean Mei refers to the “big six” American cities Chinese buyers are focusing their purchasing might. New York is at the top of the list. Mei sites the American market’s “liquidity and transparency” as highly desirable attributes to his country’s buyers.
Corcoran Group’s second quarter market report offers an explanation for climbing prices, making the bed for the seller’s market of today. Recent low inventory has not dampened demand to call New York City home. Prices have steadily increased, but there is one dominant factor that has made premiums out of recent listing prices, and that is new development, particularly within Manhattan.
The report elaborates on its hindsight, “The influx of higher priced new development closings combined with low inventory levels, particularly under $2M, drove Manhattan’s median price and price per square foot to their highest level in six years.”
Corcoran Group’s Senior Global Advisor and Associate Broker Antonia Watson observes the buyer’s psychology when comparing prices of new development and resale property. “With developers like Extell and Macklowe constructing high rise condominiums at $3,000 to $10,000 per square foot, properties that are not brand new can utilize their more moderate prices as a very attractive tool. The interesting result is that their property values are astronomically increased because they, ironically, look like a bargain,” said Watson.
The seller’s horizon, it seems, is at its peak.
Written by Alexandra Gámez New York
