Manhattan is still the leading market to invest in, according to a number of real estate experts. While sales have declined somewhat in the past several months, the long-term value of the market appears solid. Perhaps more importantly, for those looking for a place to live in the near future, mortgages are still readily available to the city’s comparatively high-end clientèle.
The bottom line is that most markets are experiencing a slackening demand and an oversupply. It is true that demand is waning for New York City apartments. However, the supply side of the picture is decidedly different. The city’s already crowded living spaces have simply not been able to keep up with continuing migration into the city. While new condos are coming onto the market at a relatively quick pace, builders have had a hard time keeping pace with the demand for new apartments.
This is particularly stark in several sectors, most notably the luxury market, where a number of new buildings are finally coming on the market, just starting to accommodate the growth in demand that occurred during the last economic boom.
Compare this to Miami, for instance, where builders had huge swaths of space to build massive new condo complexes. That city’s market is expected to bottom out in the next two quarters, and it is doubtful it will be strong until the end of the decade.
With the end of the 421-A tax abatement, anecdotal evidence suggests that building rates will slow further. While this may be a bad thing for the health of the city’s affordable housing, it is surely a good thing for the long term value of apartments in this city.
New York’s supply has a long way to go to meet the rise in demand of the past business cycle, and it’s likely that it won’t be able to do that before the next economic boom comes, further fueling the price increases the Manhattan market is still experiencing.