Top 3 NYC Real Estate Trends for 2016
1. Decelerating growth in both the sales and rentals market.
2. Slight cooling of Manhattan’s ultra-luxury market.
3. Millenials are coming… to the sales market.
Slower Growth in 2016
While the slowdown is evident in the numbers – with the 2015 growth rate at 5.7 percent and the 2016 rate at 2.2 percent – it is really just a return to normalcy. This cooling in price will cover each one of the city’s boroughs, with Queens and Brooklyn seeing the greatest slowdown. The rental market will also see a stunt in growth; however, it will likely exceed sales price growth in 2016. The median rentals growth rate is forecasted to rise 3.2 percent, a whole point higher than that of the sales market.
A Cooling of Manhattan’s Luxury Market (continued)
What happens when a glut of supply from the rush of 2014 meets a slowing demand in 2016? The cooling of Manhattan’s luxury market is an on-going effect of the growth throughout 2014, as developers over-produced to meet global investor demands for premium NYC Real Estate. Prices in Manhattan’s top end sales peaked in February 2015 and have since been in a steady decline through October 2015, according to Streeteasy. As supply catches up with demand, we can expect prices to decline to match a more balanced market.
Higher mortgage rates will affect high-cost markets the most. The Federal Reserve raised its interest rate by 0.25 percent, and said it would increase rates by about 1 percentage point a year over the next three years. Platinum Properties president, Daniel Hedaya, reports on the ramifications and explains, “Many buyers are now looking to capitalize on the still-low rate before additional rate hikes take effect.”
Millennials: Serial Renters to Steady Buyers
As a dominant force, millennials represented nearly 2 billion sales or one-third of home buyers in 2015, according to RealtorMag. They are predicted to continue the trend with the majority of buyers being first-time home buyers.
Kevin Kraljev | Millenial Co-Op Buyer
Agent Kevin Kraljev (22) just completed his purchase of a co-op studio in Prospect-Lefferts Gardens and remarks, “I recognized the value of investing rather than throwing it [money] away on a monthly-basis.” He had the resources, and saw the major upcoming development plans for the area, like those of David Kramer of Hudson Inc.
