By Daniel J. Bollinger
Spring is almost here and, as we all know, it is the most active season for the market. With that said, interesting things are transpiring in real estate. The rental market is continuing to soften as landlords continue to offer more and more concessions like one-to-three months free rent and also paying the broker’s fee. If you are currently seeking an apartment, I would advise you not to pay a brokers’ fee because enough no-fee apartments are being offered. One metric that I can see changing this trend is the graduating college students who plan to move here. The question is, “are there enough graduates moving to NYC to support the current softening market?” We shall see.
The sales market is more attractive: The $1-3 million dollar luxury market is still going strong as there is a lot of value on the market in this range especially on the Lower East Side. The ultra-luxury market hasn’t made up its mind yet. One week you read signed contracts are down, and the next week you read that signed contracts are up. I would recommend fellow luxury brokers’ like myself to read The Global Property Handbook, produced by Warburg Realty, Barnes International, and Wealth-X. It is the first report to put the luxury global real estate market into perspective—detailing the real estate habits of ultra-high net worth individuals and the primary factors that influence their purchasing decisions. In addition to learning what your potential clients will be looking for in a residence, they also have produced the first ever “Alpha Cities Index,” which is an index that lists the top 50 cities for luxury purchases based on practical, emotional, and financial factors of this group. Heidi Barnes best sums up this market by saying, “Global financial uncertainties combined with the economic, political, and social conflicts that weigh on our society remind us as if it were needed, that real estate and especially luxury property remains a safe haven. Wealthy clients seek out luxury property because it is one of the best avenues for maintaining financial value.”
One other metric to take into account is interest rates. Interest rates have been trending higher since hitting all-time lows in July 2016, and exploded following the presidential election. This trend does not show signs of reversing. I would recommend that once you receive an accepted offer to get a lock rate mortgage since interest rates adjust daily.