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Real Estate

NYC winter real estate market very hot, experts say

Houses along the east side of Revere Place

Houses along the east side of Revere Place between Dean and Bergen streets in Crown Heights, Brooklyn. Photo Credit: Linda Rosier

Winter is notoriously quiet for the New York City real estate market -- but skyrocketing prices and lower vacancies are not in hibernation.

Here’s the scoop from local experts on where the market currently stands:

There is a lot of new sales inventory hitting the market right now, according to Citi Habitats president Gary Malin, but it's mostly in the luxury market.

Last year saw about 2,500 new units open in around 59 total new buildings, he said. For the 2015 sales market, Citi Habitats is predicting about 6,500 new units in about 100 new buildings.

"The apartments are brand new, state-of-the-art, best of the best," Malin said, and are "commanding the highest prices."

As a show of hope, the cost of the average one-bedroom in Manhattan dropped from $730,000 in the fourth quarter of 2013 to $710,000 a year later, according to a recent Citi Habitats sales market report.

But Alan Lightfeldt, a data scientist for StreetEasy, said this isn't comforting enough.
"I categorize the Manhattan market as high and dry — incredibly high prices and dry inventory," he said.

With mortgage rates at a 20-year low (the average interest on a 30-year fixed-rate was 3.73% in New York as of Wednesday, according to Zillow Mortgages), it makes sense that units are selling rapidly.

Inventory is gobbled up not only by local homeowners but also from foreigners investing in New York City properties, according to Barry Brandt, director of sales at Argo Residential.

"Of all the places to invest, New York continues to be the safest," Brandt explained.
To get a break, look in Queens, such as Jackson Heights and Sunnyside, Brandt recommended.

"Queens is becoming a really desirable and value-oriented option for people who are priced out of Manhattan and Brooklyn," Brandt said. "There are still areas where you can get wonderful homes with really good value."

New Yorkers have a wealth of high-end options, with an influx of luxurious new apartments hitting the Manhattan rental market, Malin said.

"People are building really phenomenal properties, almost condo-like," with high-end finishes and luxury amenities, he explained.

For example, 2 Sutton Place North, a new rental building on the Upper East Side, has beautiful views, a gym, a pool and is fully staffed — services you normally see in a condominium.

But prices are suffocating renters, Lightfeldt said.

"Rent affordability remains a problem for the entire city, but particularly so in Brooklyn," he said.

In Brooklyn, the average renter will spend 60% of his or her annual income on rent this year, according to StreetEasy. Renters in Manhattan will spend not much less — 49% — and those in Queens and the Bronx will shell out about 44%.

Affordable rent is typically considered 33% of a renter's annual income or less.

And rents are only on the rise as apartment supply decreases. The average Manhattan apartment rented for $3,430 in January 2015, $49 more than the month before, according to a Citi Habitats rental market report released Thursday, while the vacancy rate in Manhattan fell from 1.74% in December 2014 to 1.60% last month.

"Demand for rental housing in New York City is far outpacing the supply," Lightfeldt said.
Where to look
According to our experts, here are neighborhoods to look for apartments that offer good value for your buck:

-- Astoria/Long Island City, Jackson Heights, Sunnyside
-- Bedford Stuyvesant, Crown Heights
-- Upper East and West sides, towards the river


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