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“More than 60,000 new units under construction”
February 12th, 2019 | Posted in Real Estate News
Below is our latest newsletter on real estate and happenings in NYC. Hope you enjoy. Always great hearing from you, so please let me know if you have any thoughts or questions.
I hope you’ve all found the perfect gift for your Valentine since traditional conversation hearts will not be an option – finding the perfect apartment may not be as easy as some in the industry are suggesting. About a year ago we heard that the decline has less to do with the market and more to do with a lack of real supply, open listings labeled as “off market” and overpriced properties. However, as the year progressed it was evident that a lack of supply was not the primary issue, 2018 closed out with nearly 7,000 active listings – the highest inventory has been since 2011.
Across New York City there are more than 60,000 new units under construction. With population growth sitting around 50,000 people per year it’s going to take some time for these units to be absorbed. If you target the ultra-luxury market, the glut of penthouses available may suggest that the way New Yorkers view luxury real estate is changing. We can expect to see inventory rising over the next few years as projects in progress are completed, and there’s still more inventory than there are serious buyers out there. According to the Financial Times the stock of unsold luxury homes has been steadily increasing. “For properties priced above $3.0 mm, the ratio of homes sold to those currently for Sale in Manhattan has gone from 1:3 to 1:6 in a year. For homes priced above $10.0 mm, the ratio is 1:10.” These ratios do not include shadow inventory that developers hold back from the market.
You have to take a step back and ask yourself, who is going to buy all of these luxury homes? The market is facing other hurdles such as rising interest rates, new tax laws, and a decrease in foreign investment. If you are in the market for a luxury property now is the time to look.
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