New York City: A Buyer’s Market
Investors have always had their eye on New York real estate. Strategically speaking, they are waiting for commercial and residential prices to drop before they make their move. This requires much foresight and analytics in order to make the best investment decision given the market conditions.
In an interview with the New York Times, Harry Mackelowe comments about the state of the New York real estate market and how it will affect the demand for condos. Mackelowe is a real estate developer and expert that has been in the business for over sixty years. “The upper end of the market is justifiably slow,” Mackelowe says (1). This means that prices are starting to cool because of the large supply of condos (specifically in the luxury market sector). Investors should take advantage of the market now, before the demand drives up condo prices again.
In an article titled “The biggest price cuts on luxury pads this week,” Miriam Hall of The Real Deal magazine discusses the price cuts as seen in the luxury condo market sector. For example, one Penthouse in the Nomad neighborhood has been reduced by 20 percent, making the price tag $15 million. The seller has also added amenities to the property, to further entice buyers and attract reasonable offers for the condo. With the Trump administration in full place and the stock markets doing well, the value of real estate could soon rise as well, making for a wise investment decision today. Ari Harkov, a New York City broker writes regarding the effects of the election so far that “many affluent New Yorkers will benefit in the short term from looser regulations and high stock prices, and others will psychologically seek a sense of normalcy through buying and selling real estate” (3). It is in the luxury market specifically, that buying real estate is a rather safe investment, because of the regulations put into place. This will encourage buyers looking into ultra-luxury condos, commercial spaces and real estate developments to begin purchasing real estate once again. Overall, this will stimulate the economy and encourage buyers on price points to invest in real estate. And we can see that it has already begun.
When comparing 2016 to the start of the new year 2017, there have been a few similarities in regards to the luxury market sector. Ari Harkov of the New York Daily News writes, “One of the dominant real estate stories of 2016, the $10 million and up market in New York City continued to remain oversupplied, with extensive price cuts and substantial negotiations. Overall, that market has fared better than many anticipated” (3). It is a great time Harkov later adds that “we will begin to see more public price cuts in this market in 2017. Some developers and sellers will have to sell, others will do so for fear of future softening, and these reductions will create some liquidity in this market as buyers will embrace new pricing when there are significant reductions” (3).
Overall, this will be a great way to stimulate the economy as well as boost the real estate industry in New York. The future of real estate specifically is very promising with President Trump in the White House. Steve Cuozzo of the New York Post quotes Cushman and Wakefeild’s President John Santora: “If there’s an easing of regulations, we’ll see growth by financial institutions, especially in New York,” Santora said. “And that will be good for New York” (2). The growth of financial institutions and real estate are often paralleled, especially in times where there is a transition of power. Since the stock markets have been doing well, naturally the real estate industry is following, as always. “Commercial property-related taxes [alone] brought in $20.4 billion last year, according to the Real Estate Board of New York — enough to pay for all the city’s teachers, cops, firefighters and other municipal workers” (2). This evidence clearly shows that the real estate industry has been an economic pillar for New York and the industry will continue to be a buyer’s market as real estate investments in New York flourish.