Times of transition are always tricky: for families, organizations, politicians and real estate market participants, alike. This time is no different: the NYC real estate market is undergoing a transition and is still settling into a new norm of sustainability. The linear upward trajectory we experienced a few years ago is behind us, as we predicted, and the market is finding its new norm, a steadier norm.
That doesn’t mean that the process of transitioning itself is clear, immediate or readily visible while in its midst. This injects a level of uncertainty on behalf of buyers and sellers who don’t see the broader market trends that real estate professionals do, day in and day out. In the land of imperfect or incomplete information, worries abound, often unnecessarily. And this is where we find ourselves today. People are worried that the market shock of a decade ago may rear its ugly head again, but we’re here to tell you: don’t bet against NYC.
This is not just because NYC is always in the top two destination markets for world-wide investors and high-net-worth individuals. This is also not just because NYC’s employer landscape is more diversified than ever, less embedded in the Wall Street reality than ever before. This is also not just because the number of businesses starting up and migrating to the city is on the rise. If you put all that aside and look purely at the supply and demand dynamics behind the NYC market… they are healthy.
We are not seeing an oversupply of property, nor a lax lending environment, nor a lack of demand from property buyers nor a dramatically escalating interest rate environment. None of the fundamentals appear at risk, as we debrief with Jonathan Miller and follow the numbers.
Indeed, transactions in the $1-$5M range, along with studios and 1 bedrooms, remain robust. We are seeing movements across the full price spectrum, fueled by sellers who recognize the market transition. What this means is that the market is flattening out in the immediate short-term as it looks to build a new foundation from which to grow. This is the stage for “the new up”. Not broker babble, just asset pricing 101. Headlines get eyeballs and sell ads, but this doesn’t mean that they’re true. Each developer and seller has his own opinion of where the market is going, and may have motivations beyond market timing (think expiring loans, personal cash needs, etc.). That’s the beauty of a fluid and liquid market, after all. But rest assured: the sky is not falling, the markets aren’t crashing and deals are getting done, with happy buyers and sellers, alike. So if you’re in the market, stay in the market, and if you’re not – it may be a good time to jump in during this new foundation-settling environment.