As the end of Summer nears, people everywhere are looking to soak up the last stretch of the season – whether that means picnicking in Central park, or heading out east to savor those final magical moments outside the city. We hope everyone is enjoying the long sun-drenched days and a bit of much-deserved relaxation. The LevinKong Team would like to wish everyone a very happy, fun, and safe Labor Day weekend.
New Yorkers have been the fortunate recipients of some beautiful summer weather as of late – a welcome respite after this summer’s extreme heat. The real estate market has, for the most part, mirrored the lazy days of summer in its pace (but not the scorching heat). The summer market in the city has historically been our slow season. However, this year’s market conditions have been further affected by macroeconomic and inventory factors that have led to even more favorable buyer conditions.
Buyers have been proving slow to pull the trigger on purchases, as inventory levels have climbed and options have increased. Manhattan saw a year over year increase in inventory from the second quarter of 2017 to the second quarter of 2018 of 10.7%, according to Miller Samuel’s market report. Brooklyn witnessed an even more profound rise in inventory over the same period of 18.5%, and Queens saw an increase of 8.9% according to the report.
Buyer hesitancy has varied across different price points, neighborhoods, and property types. The lower price-points and outer boroughs – which had been relatively immune to the slowdown – are now feeling the shift in the market as well. The buyer pool is in a “wait-and-see” mode concerning their personal tax implications based on the new tax plan and although the expectation is for modest incremental increases, interest rates are rising.
Due to the smaller buyer pool, well-informed purchasers and investors can take advantage of these conditions to negotiate price and find opportunities that don’t come around often in our typically competitive market. This is especially true in the new development condo market. Developers are holding onto high levels of inventory; as their costs continue to eat into profits and payments to investors come due, we are seeing a willingness to come down from their asking prices, and levels of concessions that haven’t been seen in almost a decade.
Sellers that are in turn purchasing more expensive properties have the opportunity to take advantage of the bigger discount on their subsequent purchase. It always makes sense to upgrade in a down market. Unique properties, prime locations and well-priced properties are still attracting buyers, so the conditions for all sellers across the market are not identical. This is certainly a time to understand where your property falls within the context of the market as a whole.
We will continue to keep you up-to-date on recent happenings and trends in the market, and hope that you have found this informative and useful. As always, please reach out with any questions on how you can take advantage of these current trends, or how to protect your real estate assets. We can also answer questions regarding a specific trend or segment of the market. The LevinKong Team is available to serve all your New York City real estate needs and those of your friends, family and colleagues.