Sailing in New York Harbor | Photo by Tony Sargent (C) 2013
While 2013 has seen Manhattan luxury real estate flying off the market the larger story is that every great 1 to 3-bedroom apartment has 3+ buyers desiring to buy it. Here are 6 reasons why this trend is sustainable:
- Manhattan apartment stock is approximately 70% rental. With only 30% of apartments for sale there is already a built in potential for inventory shortage as society becomes increasingly affluent and established. Also while only 25% of apartments are condominiums/new developments, they accounted for approximately 50+% of all sales in the boom years, foreshadowing today’s re-sale inventory shortage. Additionally, co-op owners stay in their units longer than condo owners putting enormous pressure on existing re-sale inventory.
- New development construction dried up for five years starting in 2008. Today most new developments are aimed at the high-end market and priced at $2,000+ per square foot leaving overall mid-level re-sale inventory at 12-15 year lows.
- As newly minted Social Media and Internet entrepreneurs join the growing ranks of the global “1%” and baby boomers buying in New York, while Wall Street performance continues to be a barometer of the strength of Manhattan’s market, in 2013 the market has become less dependent on Wall Street’s middle level employee bonuses to remain strong.
- Lifestyle & Safety = people-friendly, family-friendly and senior-friendly. The safety of Manhattan and New York (look at Brooklyn) has grown exponentially with computer-modeled policing and development of areas once seen as off-limits. Long-time residents mingle with baby-strollers as families decide to remain in New York. The great cultural lifestyle offered in Manhattan is drawing back wealthy baby-boomers to Manhattan from the suburbs while keeping those who would have left 20 years ago, in the city longer.
- High Rents and low mortgage rates continue to drive buyers of all price points back to the sales market.
- TV, Innovation & Tech: Entertainment filmed in New York adds to the city’s appeal to people, globally.
A beacon for leading creative or financial professionals, as well as global entrepreneurs desiring to make a splash, all arrows are pointing up again in New York.
