It’s common to put things off until after the holidays — whether that’s cleaning out your kitchen or finding a new place to live.
While we won’t help you scrub your cabinets, we did speak with experts to find out what to expect from the New York City residential real estate market in 2016.
Experts advise potential homebuyers in 2016 to be patient and look for prices that match those in 2015.
Prices will rise in the beginning of the year but will have to return to 2015 levels if buyers don’t keep up, according to Doug Perlson, co-founder of the sales listings site RealDirect.com.
There are fewer buyers in the market this season than at this time in recent years, according to RealDirect data, and the Federal Reserve’s decision to begin raising interest rates is likely to exacerbate that trend, according to Perlson. So, sellers will have to adjust prices to remain competitive.
“If you do your homework and you do your research, you’ll be able to find something,” he said of “savvy buyers.”
There are exceptions, however. StreetEasy anticipates sales prices in upper Manhattan, for example, to rise 10.2% in 2016, after demand for the area surged in recent years.
“So if that’s your target market, it does not behoove you to wait,” Lightfeldt said.
Regarding current prices in the rental market, “there’s a certain level of disconnect between what owners want and expect and what tenants have the ability to stomach,” Citi Habitats president Gary Malin said.
He expects more than 5,000 new rental units to hit the market in 2016, most will be in high-end buildings, such as 70 Pine St. and 66 First Ave., that are gorgeous and expensive, filled with upscale amenities.
But while developers have to charge high prices to break even on their building and land costs, Malin said the inability of renters to foot the bill is reflected in the city’s rising vacancy rate, which Citi Habitats logged at 2.02% in November.
To lure renters in 2016, property owners will adjust prices and offer incentives, which they normally do in the winter anyway, he said.
“Even if owners need to make some adjustments, it’s not as though they’re not doing extremely well,” he assured. “It’s just that they’ve gotten a little ahead of where customers are comfortable transacting.”
But Lightfeldt, of StreetEasy, had another perspective. While the vacancy rate rose steadily in 2016, it’s still below 5%, which the state government considers a housing crisis, he said.
So while landlords may be slightly more stressed about attracting renters, the market is still competitive for apartment-seekers and will only get more expensive, Lightfeldt said. StreetEasy projects that city rents will rise 3.2% in 2016.
Renters need to be ready to transact immediately, Lightfeldt said.
“Bring your checkbook to the open house,” he said. “A lot of people sight-unseen will produce a check [for a down-payment] and they might have a guarantor lined up to sweeten the pot and show the landlord that they’re ready to go.”