Happy New Year from the Stein Team! We would like to thank our loyal clients and many supporters for helping us achieve another successful year. A detailed state of the market - looking back at 2017 and looking ahead towards the New Year - is highlighted in the article below. As always, we remain committed to bringing our buyers and sellers the best in client service and industry expertise. We wish you all a very healthy and happy new year.
Market Update
2017 has been a year defined by uncertainty, a state of being that is never great for real estate. The first 9 months of the year were especially slow as prospective buyers grappled with the new norm: where the financial markets soar and the economy posts generally solid numbers despite the consistently unpredictable world order. By September of 2017, it started to feel as if buyers had come to understand that uncertainty is simply the new way of life and as such, they started to grow more comfortable with being uncomfortable — enough so as to actually move on with their lives and start buying property despite feeling uncertain of the future. Buyers emerged from what had been a deep freeze - perhaps in part due to sellers acknowledging the new market and finally dropping their prices.
Comparing 2017 to 2016 we saw one very significant change in the luxury market; in 2016 it took on average of 318 days for $4m+ properties to enter contract whereas in 2017 it took 433 days - almost 4 months more. As well, the same properties had to reduce their asking price by 8% before entering contract. Overall this tells us property remained overpriced and only sold when sellers and brokers priced reasonably.
We saw an increase in domestic investor clients - buyers who looked to diversify their portfolios and viewed NYC RE as an asset class they wanted to get into for a longer term. Longer term investors (over 7 years) returned to the market and took advantage of anxious developers of new projects that had been stung by the loss of many foreign buyers. It is clear that US domestic buyers now have a chance to buy into special new developments at prices below what their foreign counterparts paid 2-3 years ago.
As the year comes to a close, we now have the new tax plan to grapple with. The ultra rich will benefit most from this plan - not the 1%, but rather the top 1% of the 1%. High tax states such as New York will be affected and in general the concern is around how much this will reduce real estate values. It is early to say but our sense is that the high-end market will be affected less than most, and the middle and lower end of New York will persevere given the consistent demand.
We have a number of properties we are preparing to launch for sale in 2017 and are working with some committed buyers who are looking forward to making purchases in the New Year. Overall, we are optimistic about the market.
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