As we leave 2018 behind, it is important to survey what happened last year, especially since sales prices and volume decreased dramatically compared to 2017. There are several factors that contributed to the downward market, including:
• The Tax Reform bill, which has significantly affected New Yorkers due to the high state and city taxes that can no longer be deducted from the income tax
• Substantial increase of inventory in new development projects and units
• The loss of foreign buyers due to the depreciated value of foreign currency compared to the dollar
• Increased mortgage interest rates, due to the overall rise of interest rates.
• Domestic political uncertainty, the stock market fluctuations, and increased concerns of depreciation in value property.
All of the above contributed to a dramatic slowdown in residential real estate.
2018 was a year of transition: sellers had to come to the realization that prices were significantly lower, and buyers needed to understand and feel some confidence that the market has come to or near its bottom.
OUTLOOK FOR 2019:
While most sellers have finally accepted the new reality, there will always be some who feel that their apartment is exceptional and believe it will fetch a relatively higher price. And of course, there will be buyers who believe that prices will decrease further and won’t make offers because they want to wait till what they perceive as the “true bottom of the market.”
In addition, the geopolitical and domestic political climate could become even more combative and divisive. This is likely to create continued volatility in financial markets and will affect the residential sales market in New York City. In fact, the market may be as tough as it was in 2018. Nevertheless, many sellers and buyers may hold firmly to their beliefs that the market will still shift in their favor, which will make the broker’s task of bridging the gap even more difficult.
The role of a skilled real estate agent will likely be more important and at the same time more difficult. Brokers need to be knowledgeable not only about real estate markets, but about the financial markets and geopolitical issues as well. Agents will also need to carefully hone their marketing strategies to be effective. Learning top negotiation skills will allow an astute agent to bring about a meeting of the minds between their client and customers, and have both sides feel mutually gainful.
If you’re interested in buying property in NYC, our exclusive Buyer’s Guide will assist you in understanding what is involved in purchasing residential real estate in Manhattan, and will explain how we provide you with the best service throughout the process. Or if you need any further information or valuation of your property, please do not hesitate to contact us. I will be more than happy to answer any of your questions.
All the best–