For those who look at the New York City Housing Market all the time, like me, it would be nice if there were some better sense of a direction in which the market is moving.
However, it has been a month, perhaps a year even, of mixed messages.
How much of the news is noise?
How much is related to pricing in Manhattan and Brooklyn?
mixed messages.
Let’s take just a few in the “Pro” Column, that could generally indicate a stronger housing market:
- The stock market continues to strengthen
- Property Inventory is extemely low
- Unemployment is extremely low
- Banks are reporting killer quarters, outperforming estimates
- Crime in NYC is so low, it’s actually off the charts
- Mortgage Rates remain historically low, even if they’ve risen from the very lowest lows
- The Rental Market is firming up across Manhattan and Brooklyn
- The amount of new construction across all 5 boroughs is staggering
Now let’s take a few in the “Con” Column, that could indicate potential issues with a weakening housing market:
- Retail vacancies are crazy, and growing across Manhattan
- Developers are building and building with a pileup of New Development inventory
- Real Estate Taxes remain crazy
- Median Sale Prices Across the City fell for the second straight quarter
- Absorption Rates year-over-year continue to climb, as much as 30%.
Less depending on neighborhood
- Softness in certain pockets of the Bond Market, along with emerging market issues
- Continued distractions with the current administration and its saber-rattling
- Realities of the liabilities and implications of the Dec 2017 Tax Plan continue to unfold
- Prices continue to soften in many neighborhoods and at higher price points.
- Mortgage rates continue to rise
- Time on Market has gone up across price points for NYC properties
I won’t make a prediction, nor do I see a good way of how to distinguish news from noise at present.
What I can tell you is that we’re in a market looking for a bottom:
- Buyers feel less urgency than I’ve seen in many years.
Units trying to fetch 2016 prices will be disappointed.
Savvy buyers, growing every-savvier, will not abide by unrealistic sellers.
Period, full-stop.
- Properties’ time on market demonstrates that well-priced properties have a market, or will sit if overpriced.
- Prices at the high end are in many cases back to 2014, 2012, 2010, even 2008.
As taxes and inventory both rise, along with carrying charges, buyers think not just twice, but many times, about diving into the market again
- Buyers don’t want to be the ones to catch a falling knife.
- Buyers are fully empowered to make low offers.
We’re seeing it right now across the board, even for smaller apartments.
They’re excited to find a bottom.
As price discovery continues, buyers will get increasingly confident to make offers, and sellers will be increasingly aware of recent sale prices.
It is bound to be a higher and higher volume 12-24 months after a long time of a slowdown.
What I mean is that more and more deals will come together as buyer confidence and seller price education collide.