A Summary of The NYC Realty Market
Housing Starts dropped 12% in the month of June. Housing Starts refer to the number of new residential construction projects that have begun within a month. As of June 2018, they dropped by 12.3% which is looking like the lowest it has been within the last nine months. This information is derived from the Census Bureau and the Department of Housing and Urban Development. In addition, building permits fell 2.2% and starts for single-family homes in particular dropped by 9.1%. Multi-family units have had a bigger hit with a decrease of 19.8%.
One explanation for this drop could be tied to Millennials. While Millennials are reaching an age where they should be becoming homeowners, there is a lack of purchase power due to factors such as high student loan debts, expensive health insurance plans and low paying careers.
What About the Manhattan Real Estate Market?
The market has definitely cooled down in 2Q18. There were fewer closings, an increase in inventory hitting the market, and prices reaching a baseline. Could this be an end of a soaring market or the start of the housing bubble? That’s a firm no. This is just a reasonable reaction to a number of things such as volatility in the markets, the recently passed tax reform bill that hurts the SALT (State and Local Income and Real Estate Tax) deduction, and the surplus of new developments you see in the city on every other block. This of course is slowing down buyers from pulling the trigger. But not everything is bad. There was an increase in signed contracts and an uptick in sales. The demand for Manhattan property is still high.
What Does This Mean for You?
If you are a potential seller, you just need to be a little patient. As long as your property is priced at a reasonable level, don’t fret. If you are a potential buyer, this is a great time to consider your options and make your move.
In Brooklyn, for most of 2018, majority of Brooklyn condominium units are already filled. In June 2018 alone, developers and sellers closed on over 500 condo units. This could be due to a number of things. For starters, the commute from Brooklyn to Manhattan can be as long as 45 minutes (South Brooklyn) to 15 minutes (Crown Heights). Brooklyn is the new Manhattan and prices, although can still be very steep, are competitive in relation to what you get in New York City. This is the uniqueness of New York City. If Manhattan isn’t your cup of tea, you have Brooklyn just a few stops away to give you that City feel, or the other two surrounding boroughs – Queens and the Bronx. A few have ditched Manhattan for the other boroughs. Even so, there are still affordable areas in NYC to consider such as Harlem and Washington Heights. To select the best area for your economical situation, compare a number of factors, such as the daily commute, the safeness of the neighborhood, and the overall quality of life if purchased.