New York City’s luxury real estate market cooled down in 2016. The number of high-end sales went down 18 percent, according to realtors Olshan Realty Inc. This general trend was predicted by a site called StreetEasy, which predicts New York City’s real estate market trends every year. If they were able to get that right, there’s a good chance we should be trusting their prediction for 2017. Here are a few things we can expect to see happen to the New York City housing market according to StreetEasy:
- Manhattan’s Sales Market Will Experience Slow Growth
Out of the five boroughs, Manhattan is expected to have slowest sales market growth. Over the past few years, high demand and high-priced inventory lead to high resale prices in Manhattan. However, the market is now being dragged down by these luxuries. In November 2015, Manhattan’s luxury tier became the first segment of the market to see price declines and the trend has continued since. This trend will most likely spread to all segments of the market. 2017 is expected to be one of the slowest years for price growth for Manhattan sales in years.
2) Neighborhoods Will Change Due To Transportation Changes
The real estate conversation in 2017 will be largely affected by public transportation. There will be a number of major public transportation changes in New York City in the near future, including the opening of the Second Avenue Subway, the L-train shutdown, the M-train repairs and the 7-train extension to Hudson Yards. According to research, rent and sales prices increase when a home is close to convenient transportation.
3) People Will Turn To Homeownership
In 2017, we can expect rent to increase across all five boroughs. Rent is likely to far outpace income growth. This past November, Queens rents increased 4.1 percent year-over-year, outpacing both Brooklyn and Manhattan. Over the next year, Queens rents are expected to continue increasing by 2.4 percent, while Manhattan rents are expected to increase by 2 percent and Brooklyn rents by 1 percent. As sales price growth slows and rents increase, many renters who have saved for down payments will become homeowners in 2017. If we look at the tipping point, or the point in time at which the costs of buying will be less than renting, we see evidence of the shift to home buying occurring in the near future. According to StreetEasy, more than 80 percent of all New York City neighborhoods that have recorded tipping points, have tipping points of less than five years as of November 2016.
4) Hottest Neighborhood Will Be Kingsbridge; The Rest Will Be In Brooklyn
Each year, StreetEasy comes out with a list of the city’s hottest neighborhoods, showing where New York apartment shoppers are expected to look in the coming year. At the top of the 2017 list is Kingsbridge in the Bronx. Six of the ten spots are occupied by Brooklyn neighborhoods. How present were Manhattan and Queens? The only two neighborhoods from these boroughs that make the cut for 2017 are Yorkville in Manhattan, and Astoria and Bayside in Queens.
Overall, we can expect a lot of changes in New York City’s real estate market in 2017. It will be exciting to see whether these predictions come true.