Real Estate Predictions For 2017—The NYC Market May Cool
It looks like 2017 will be a home buyer’s market. The bad news—it’ll still be expensive.
The real estate gurus at StreetEasy, Citi Realty, and elsewhere have spoken. Based on their reports, 2017 will be a home buyer’s market. That could mean—no more multiple bids above asking price, no more all-cash offers making mortgages redundant. They base their predictions on a few undeniable facts.
Firstly, prices for luxury dwellings on the top end of the chain declined throughout most of the year—and this is expected to filter downwards. Compounding this is the fact that there was a glut of new constructions in 2016. Every postage stamp-sized parking lot had a glassy skyscraper built on it. We have reached a tipping point where the rate of development is simply outpacing demand.
“For the buyers—if you’re thinking about making the leap, have saved enough money for a down payment, have your financial house in order—now might be a good time to make a move,” Krishna Rao, economist with StreetEasy said. “If you are seller, you don’t want to price too aggressively and have your property sit on the market and get stale,” he added.
The elephant in the room, of course, is interest rates. The Federal Reserve raised them for the first time in 2016 on December 14. If they increase over the next year, mortgage rates will increase, too, and buyers may stay on the sidelines. To tempt them, seller may decide to lower their rates and the market will cool. Other potential buyers may just decide to remain renters—which will be good for landlords but not so peachy for sellers.
If you didn’t know already, all outer borough neighborhoods are claiming to be the new Brooklyn. This trend will continue in 2017, with buyers and renters taking advantage of new subway lines and new developments to move further afield. The StreetEasy report boldly stated that The Bronx’s Kingsbridge will be 2017’s hottest neighborhood.
Other ones the watch, in their opinion, are diverse batch—Fort Greene, which has long been gentrified, Bath Beach, the already hot Prospect Park-Lefferts Gardens in Brooklyn, and Bayside in Queens. Not on their report—but sure to feature in the future—is Staten Island, with the vast development happening there around the waterfront, in particular, Urby rental building.
“By need or desire, they are looking at places that weren’t on their hit list,” Roa said. Years ago you didn’t have as much luxury outside of Manhattan. Now there are buildings going up in Long Island City that create an amazing lifestyle.”
Conversely, Mdrn. Residential’s Zach Ehrlich told DNAInfo that “The run-up in pricing in Brooklyn and Long Island City will get some residents to look back at Manhattan.”
Accessibility is the key for any neighborhood’s success. The Second Avenue subway will have an electrifying effect on the Upper East Side. A slew of luxury buildings are going up and renters will flock there. The overcrowded 7 train will continue to push people towards Queens—in particular, Sunnyside, Woodside, and Jackson Heights, as Long Island City becomes a little too pricey for many.
“You’ll start to see more modern, architecturally-driven product there,” Eric Benaim, CEO of Modern Spaces to DNAInfo. “Queens is where it’s happening.”
And that’s a sentence once few could have predicted anyone saying with a straight face.
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