We at The LevinKong Team send you our most sincere wishes for a happy, healthy, and prosperous 2019. We would also like to extend our gratitude to our past and present clients for trusting us with such important endeavors throughout the year. We have made some big changes, expanded our geographical reach, and look to continue to take market share – all while helping our clients find incredible investment opportunities, and maximizing the potential of their real estate assets.
2018 was a precarious and challenging year for the New York real estate market. The downward shift that began in the luxury segment of our market in 2016, found its way into the middle segments of the market by early 2018, and ultimately permeated the entire market. While NYC was the last region hit by the housing market’s crash in 2008, it was among the first to show evidence of the dip this time around. After a robust multi-year seller run that began in 2010, buyers firmly established their dominant position last year- sales down 14%, the largest decline since 2009.
As we have been repeatedly mentioning over the last year, the shift was predominantly caused by macro-economic and political uncertainty, the locally unfavorable ramifications from the new tax plan, rising interest rates, a decreasing foreign buyer pool, and a build-up of inventory particularly in the new development market.
In the final weeks of 2018 – and the early part of January – we have witnessed a significant uptick in buyer interest. In the final week of 2018 alone, we saw four of our listings get accepted offers. Local buyers, investors, and buyers from other areas are reaching out at a significant clip to see if this is the moment to take advantage of a discounted NYC housing market.
While 2018 was categorized by a “wait-and-see” mentality in the would-be buyer pool, there has been a recent confluence of events, which is spurring some new activity. Buyers are still looking for, and getting strong value, most profoundly in the vulnerable new construction condo market. They are once again in the market. The announcement of major tech company expansion in our city, the widespread belief that interest rates will remain at this historically low level for the near future, and an unsafe stock market are all having a positive impact. New Yorkers are not known to be particularly patient; so, after an extended period of waiting on the sidelines, a good portion of the money that they are pulling out of the stock market should wind up directed at our safe and depreciated asset – NYC real estate.
Consumers pause when they are confused; however, when they see this historically high-performing asset at a discount (with other investments looking suspect at best), shrewd buyers climb the wall of worry and it appears that 2019 will be a very active year. While in 2008, we were late to the ‘party’ and late to recover, this time around we have been in the down cycle (originally in the luxury market) for almost two years before most domestic markets, and it appears that we will be the first into this cycle’s recovery. There are many factors at play, and different asset classes and locations are seeing differing degrees of activity.
This is truly a time to be well-informed, strategic, and glean a real time understanding of market conditions. Due to our co-op and condo market’s delayed sales pace,
the market data and media reporting is typically at least three months out of touch with the market by the time it is reported. We promise to keep you up-to-date on recent happenings and trends in the market, and hope that you have found this market update 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 offer a wealth of knowledge regarding specific trends or segments 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. Please let us know how we can help!