A new year has just greeted all of us, but would that mean that we will see brighter horizons for NY real estate? If we look back into the events that happened in 2018, we could say that it hadn’t really been majestic for the real estate industry. Even for most of the other sectors of the economy, 2018 wasn’t on the positive side. The previous year was characterized by increased interest rates, enforced import taxation, decreased spending capacity, and stagnant wages.
Because of such facts and many other contributing factors, New York was greatly affected as seen in the slide down of property sales figures last year. Will Manhattan, Brooklyn, and Queens continue to experience a deterioration of property sales? Will buyers acquire greater power in terms of price negotiations vis-a-vis the need for landlords’ tenant retention and sellers’ asset liquidation?
No matter which player you are in the real estate industry, this article will help you set your expectations correctly. We will look into the possible scenario for buyers, sellers, landlords, and tenants for this year. Are you ready? Then let’s start off with our 2019 NY real estate prediction.
1) Will property buyers find cheaper deals this year? Will purchases be easier?
According to analysts, 2018 was a year for NY property buyers. But why? Basically, buyers had greater negotiating power in the previous year because of the fall in property demand. Since some sellers wanted to liquidate their properties faster, then buyers also had the chance to get a bargain that is beneficial for them. Since it is not yet foreseen that there will be any considerable and positive change in the country’s economy, then we could safely predict that 2019 will continue to be a buyer’s market.
So are you planning to purchase your own NY property this year? If so, then we suggest that you still be wise on your purchases. Don’t be easily lured by cheap rates. How do you make sure that buying a property is a good deal?
The ultimate advice that we can give you is to assess the value of the property that you are looking to buy. Treat your property as an investment that must offer good returns in the future. Here are the factors to be evaluated when planning to buy a property:
What is the type of property?
How does the community look like?
Is the price comparable to other sold properties in the area?
When do you intend to move in?
What’s the range of your budget?
Can you negotiate the terms?
Once you have properly evaluated the property, your desire, your need, and your capacity to purchase it, then make your decision with a looking forward view to the viability of your investment in the future.
Despite the NY real estate market leaning towards the buyer’s side, there still remains a hindrance to the realization of buyers’ plans. One of the greatest blocks to new property purchases is the current administration’s federal tax law. The new policies have caused a decrease in possible deductions for taxes on property purchases and also a decrease in the allowable mortgage amount. Considering the high taxes in the city, then you also have to reconsider your plans for buying.
2) Will sellers need to endure more trying times?
Are you one of the NY property sellers who is filled with high hopes and visions for the city’s real estate? Have you been so used to getting stellar deals due to constantly increasing property valuation in the past?
Maybe this year is the time to change your perspective in order to liquidate your properties faster without the risk of losing your earning potentials. Last year, many of the sellers have been forced to accept the fact that their properties may no longer be valued to how they have expected them in the past. As a seller, you need to be able to assess the current situation properly. The market today is definitely not the same as the real estate market two or five years ago. Adjust your prices accordingly if you want to break a deal.
So how would you know if your property will do good this year? Let us base the assessment on facts from last year.
We can expect that studio and 1-bedroom apartments may continue to sell a lot lesser this year. If they had already suffered from a great decline last year, there is no reason at all to see their recovery anytime soon. Most of those who are buying these kinds of properties need bank financing. Do you think that they would likely purchase considering the hurtful effects of tax regulations? A bad prediction may continue for sellers in Manhattan since most of them have already faced significant losses in 2018. Based on statistics, 20% of Manhattan sellers have sold their properties at a loss in the last 5 years. If you have properties to sell in Queens and Brooklyn, the same scenario may be expected but for slightly lower degrees of disappointment.
How do you make up for the external factors affecting property sales? How do you make sure that you still close relatively good deals this year? One option to encourage buyers is to offer terms that can help them such as by shouldering the common charges for a specified period. This can let them think about the deal as beneficial for their finances and make negotiations easier.
3) Will there be a mutually positive 2019 for both renters and landlords?
The trend for the leasing industry since 2018 has been to offer concessions such as free rent for the first month or up until the second month. Will the trend of concessions continue this year?
It is most likely that concessions will continually be offered by landlords. Currently, more expensive apartments are still facing an oversupply. In order to retain tenants and keep rental fees, landlords would have to offer concessions. If you are leasing an apartment in New York, you could approach your landlord and seek for concessions. Use the current market status to your advantage. Even when you are only in the process of looking for an apartment, you could also negotiate with landlords to get a better deal.
So, what else can we expect in the coming months for NY?
One of the exciting things we will see is the building of more high-end apartments that offer luxurious amenities such as indoor swimming pool, kiddie centers, valet services, and even coworking spaces. All these developments would mean that high-end renters can have better living experiences during their stay in the apartment. Most of the developments would also take into consideration the need of their tenants to accessible boutiques, restaurants, cafes, and shops, thus they will have commercial spaces along with residential units. The incorporation of pet-friendly policies and amenities is also gradually becoming accepted among developers. Thus, we can look forward to living harmoniously with our pets in these apartments.
2019 is surely a wonderful opportunity for buyers and renters to take advantage of the market condition. Sellers and landlords need to take into consideration current situations and adjust accordingly so as to prevent further losses and sustain their businesses. Overall, property development in New York is gearing towards becoming more livable and responsive to the needs of people.