2016 NYC Real Estate Market Forecast
January tends to be an exciting time of the year- the holidays have passed, the dust begins to settle, and it feels like a fresh start in life and work. This is the month of taking stock of how last year played out, and parlaying the lessons learned into beginning a stellar new year.
In 2015 we saw significant growth in the condo market, which counted for 50% of all sales - the highest percentage since the beginning of 2009. New development sales accounted for 26% of sales, up from 17% a year ago. The number of sales rose 12% compared to 4Q2014, and the average and median price for all apartments set new records. (More facts and figures in the Brown Harris Stevens 4Q2015 Market Report)
Unbelievably- the average home price in Manhattan is now $1.87 Million. (Her'es a Link to the New York Times article.)
What do these numbers mean for 2016?
I expect a continued increase in condo sales as more and more new developments become available. Inventory ranging from ultra-luxe on down will continue to expand outward from “Billionaire’s Row” on 57th Street into all parts of the City - from more traditional haunts like the Upper West Side, to neighborhoods like TriBeCa and Williamsburg, and into Queens and the Bronx.
New visions of glass and steel
Meanwhile, new skyscraper development in midtown and especially around Central Park South and 57th Street have been all the rage! 2015 was also an exciting year downtown, with the release of new images showing the possible future of the World Trade Center complex. (More on Curbed)
in 2015, units in Extell’s new One57 (pictured at the top, photo credits to StreetEasy) notably took four of the Top 10 residential sales at Numbers 1, 6, 7, and 8 with price tags ranging from $91.5mm at the top of the list to a mere $47.4mm for Unit 86 in this new development. Details are sparse on whether human beings will actually inhabit any of these units. (The 10 Biggest Residential Deals in 2015)
Safe harbors and rejuvenation
New York City real estate remains at an all-time high for investment purposes, especially as global unrest continues to push foreign capital into our market. We are in the midst of a new development boom that is raising the tide across boroughs. Meanwhile, I would expect to see growth in major capital improvements at existing developments seeking to keep pace. I was especially excited in 2015 about renovations at 360 Central Park West and elsewhere in the Upper West Side. (I wrote about it here!)
Record-breaking condo sales at new developments like One57 have pushed up statistical prices per square foot around the City, and some contrarian investors on the high end are going to bide their time in the luxury rental market. For my part, I am excited to have John Tamasi as a new addition to my team. He has considerable experience in the rental market, and I expect he will be a fantastic resource for our rental clients.
Musical chairs for Millennials and new Grandparents
Flux and growth are almost assured in 2016, City-wide. Many younger people and longer-term investors are setting their sights on areas that are reasonably close to Manhattan and haven’t undergone the full brunt of gentrification yet. Millennials have flocked to New York City for years and are starting to get married, settle down, and have children. And many of them are attracting their Baby Boomer parents, who wish to be closer to their children and grandchildren.
Overall I think the most thrilling part of New York City real estate, though, is that there are so many exceptions to every rule under any market conditions. This is where I shine! At the end of the day individual success with buying and selling real estate depends on having the right listings for the right clients, and bringing the right people to the table at the right time. In many ways this is a matter of intuition.
If you’re considering buying or selling an apartment in 2016, or if you know someone who is, definitely contact me! I can be reached at (917) 371-6723 or by email at MLubin@BHSusa.com