As 2016 has officially been put behind us, there is no doubt that there has been a dramatic shift in pace and demand for New York City real estate. Between the after-effects of the Brexit vote and the outcome of the 2016 Presidential Election, investors have seen a surprising positive turn in the real state industry.
This past year has seen much demand for both development and investment in New York City real estate. NBC New York highlights that “a total of 1,102 properties had contracts signed for $4 million or more this year, down sharply from 2013-2015 but still higher than 2012, before the condo boom started” (1). This proves that even in wavering economic times, real estate continues to prove itself to be a strong and wise investment for the future. In addition, it seems that economic speculation shows 2017 to be another prosperous year in real estate investments.
One of the predictions for the real estate industry in 2017 concerns the subject of foreign real estate investment. Steve Couzzo of the New York Post writes “The Trump Effect: Residential developers are praying, and we’re certainly hoping, that Donald Trump’s rise to the presidency will encourage, rather than scare off, continued foreign investment in high-end condo apartments” (2). That way, the current surplus of condos that are for sale will equal the demand the investors have. This will allow developers to continue developing luxury condos to keep up with the market’s demand. This will further stimulate the economy and create jobs both in and out of the real estate industry.
Another prediction is that the interest rates will continue to rise – which we have already seen implemented by Obama in the fourth quarter. Amy Zimmer quotes Mdrn. Residential’s Zach Ehrlich: “More sellers will adjust pricing to ensure they don’t get caught in receding sales market,” he [Ehrlich] said. “More buyers will lock-in and pull the trigger given upward trend of rates” (3). This will create a more competitive market among prospective investors, which will increase the return on investment in New York City real estate.
Looking back on 2016, the outer boroughs saw a surge in condo prices, as developers focused on areas in both Brooklyn and Queens. Comparatively speaking, investing in a condo in Manhattan is becoming more attainable to investors who were looking elsewhere. In 2017, the Manhattan real estate market could attract more investors than last year. Zimmer writes “as pricey new developments floods the market in Long Island City and parts of Brooklyn, Manhattan might not look too bad anymore, brokers said…migration will go in all directions, said Eric Benaim, CEO of Modern Spaces” (3).
Olshan Realty states that “there is enough demand to sell apartment sight unseen. Olshan [also] said 58 percent of all condo sales were new construction sold off just a floorplan” (1). This further confirms that there is a strong demand for real estate as a solid investment and that the industry is once again stable after the 2006 housing crisis. Overall, despite market fluctuations, real estate remains a stable and wise investment: especially in New York City.