Tips, Trends and Tales from a Pro
Viewing entries tagged
new construction
For Manhattan residential real estate, how different will 2017 be from 2016? Last year the market was in transition as the pendulum swung away from sellers to favor buyers (especially for properties priced above $4M) and shifted even more to a preference for condos over co-ops, also continuing to highlight downtown as Manhattan’s hottest neighborhoods.
No matter where we are in the cycle of real estate’s ups and downs, it’s appropriate to consider where we’ve been, evaluate where we are and think about where we are going. This year nearly every industry event I attended focused on the market’s upper end, a subject that has captured the most press recently. Last week’s Annual NYC Real Estate Showcase + Forum hosted by The Real Deal opened with the question “What’s Ahead For Luxury?”
If 2005 was the year of the bubble that wasn’t, how will this sixth year of the second millennium play out for buyers, sellers and brokers?
Last year, boom and bust stories about the real estate market dominated the press with dramatic headlines. For the most part, however, the reports were conflicting, and the media spin on medians and averages proved to be confusing ultimately for readers. There were contradictory interpretations of statistics as data was misread and facts were distorted—particularly in the year’s last quarter which saw a decided drop in the volume of sales, though not in the price of transactions.
Talk continues about a possible bubble in real estate. In the last year, prices have jumped as much as 30-40%, and the pace of trading has been frenetic. In the months and year ahead, however, a return to more balanced activity with modest price appreciation is welcomed.
Inventory has been shrinking steadily. But with new construction and new conversions in the works, more than 25,000 apartments are scheduled to come into the marketplace in the next 18 months. For certain, the market will be impacted. Will the “if-you-build-it, they-will-come” mentality continue? Undoubtedly, some developments will be more secure in their locations than others, like The Plaza, The Stanhope and The Mayflower Hotels.
As momentum continues in Manhattan’s real estate market, with record setting prices the focus of media and cocktail party attention, shouts about a possible bubble are turning to whispers. In 2004, prices across the nation rose faster than in any other year since the 1970’s. Despite disappointing employment and corporate numbers, declining consumer confidence, high oil prices, sagging U.S. and global stock, and worldwide uncertainties, prices in New York surged in a tight market amid heightened demand and frenzied activity. High incomes and low interest rates fueled ever-rising values. In nearly all segments of the real estate market, bidding wars drove prices up by leaps.
Construction cranes are everywhere in this city, and new development business is booming. According to The Real Deal, by the end of 2005, more than 9,000 new condominium units will have come on the market this year. To put that number into perspective, only 1,300 new condo apartments were offered in 2000; 2,200 units were added in 2001; 2,900 in 2002; 3,000 in 2003; and 4,800 last year. With the high number of new projects complete with amenities packages not found in older products, buying opportunities and choices abound. However, caveat emptor—buyer beware—was never more important than when buying new construction.
