2021 was a year of recovery for New York City real estate. As the height of the pandemic subsided, we saw an increase in demand for apartments in the city after many returned to New York – and residents felt more comfortable with city living again.
2022 is expected to be even more robust for the city’s residential and commercial real estate.
Platinum Properties CEO, Khashy Eyn, sat down to discuss the state of the market and his predictions for 2022:
What does the market look like for renters early next year?
I have a very positive outlook for the rental market early next year.
Renting apartments is all about supply and demand. During the pandemic, many New Yorkers moved out of the city, prices dropped and those who were originally priced out of Manhattan were able to scoop up rentals at historically discounted rates. When prospective renters caught on to this, everybody wanted to move to Manhattan which drove inventory down.
Inventory is still expected to remain low in 2022, due to an increase in demand and competition, especially with the anticipation of major conglomerates like Amazon, ESPN, TikTok and Disney opening up new offices and bringing more jobs to the city – all of those employees will need to find a place to live.
For those being priced out, there may be hope: we could see some inventory coming up as the 18-month leases expire – but those will be scooped up quickly so you’ll need to act fast.
Why aren’t builders building rental properties when they are in high demand?
Developers aren’t investing in building rentals right now because of the high costs to build.
The current high cost of land and the high cost to build doesn’t bring a huge return for rental developments, which is why developers are shying away from adding more rental properties to the city landscape right now.
There may be some existing office spaces being converted to residential properties next year, which could allow for a quick uptick in inventory that renters should jump on.
How does the market look for buyers next year?
I don’t see prices increasing as significantly for buyers next year, but I believe that the inventory we have is going to get absorbed rapidly again due to those new jobs being created by these high-tech firms offering big salaries.
Where should buyers look to get an affordable property before price hikes?
The Financial District is still relatively very inexpensive compared to the rest of the market. A lot is happening down here especially with the Seaport improving.
However, all of the traditional markets like Brooklyn, or even in parts of New Jersey where some commuters would go for cheaper properties are now more expensive than ever. Rising prices aren’t just a New York City problem, it’s happening all over the Tri-State Area.
So, landlords can potentially get a lot of money for the units they are renting, right?
It’s definitely a landlord’s market.
The landlords went through a very tough time during COVID, they offered major concessions when COVID hit. Now that demand is higher, those concessions are fading and rents are trending toward “normal” pre-COVID prices again.
That doesn’t mean concessions are completely gone – I think you will see concessions in rentals here and there. If there is a new development going up or a new building, they are going to offer concessions, but not as drastic as during COVID.
Is now the right time for sellers to take advantage of this market climate?
I don’t see prices coming down anytime soon. As inventory decreases, sellers have the power. If someone is thinking about selling, now’s the time.
How do you think the recent bump in inflation has affected the market?
I think the drastic rise in inflation is a problem, but I don’t think we are going to see that problem truly affect the market for another couple of years. Inflation is real – the cost of goods is going up significantly. Luxury assets are extremely expensive but right now everyone is still buying. There is a big supply problem, but once the supply is back to normalcy, you might see prices stabilize.
What would you say to anyone in 2021 who said New York is dead, or New York has changed?
New York has come back better and stronger than ever and will continue to be the number one city in the world. I think that for every restaurant you saw close, you will see two more open next year. I think a lot of restaurants will also be opening ghost kitchens because the startup cost is almost zero.
How can Platinum Properties help renters, buyers, sellers and landlords next year?
At Platinum, we have the tools, staff and resources to help any client on their real estate journey. 2021 was an amazing year for the brokerage. We did outstanding work with residential sales, helping thousands of clients and even set records in the residential leasing space.
At Platinum, we are nimble, creative and committed to our clients, we operate without needless layers. Instead, we invest more in our people, our marketing, and our tech, so we are primed to create opportunities.
We know that true innovation comes from the diversity of thought, and we hire to ensure a wide range of experiences, knowledge, and perspectives.
This collaboration strengthens us, both as individuals and as partners, making us smarter and more successful. When our clients succeed, we succeed.