by Adrienne Albert
The Marketing Directors, Inc
2009 was a year of transformation. The general consensus is the turning point of this recession happened in June 2009. Starting in the summer and gaining strength into the fall, 2009 improved in all sectors, as we predicted.
Manhattan and the surrounding areas have already seen resurgence. The 30%-50% price drop never happened in Manhattan and it is unlikely that it will occur. The mindset of buyers who previously were hesitant to move forward has shifted to one of tentative motivation.
There are currently 117 new construction offerings in Manhattan below 100th Street, over 59% of which have sold. The backlog of unsold homes is diminishing further strengthening the market.
Foreign buyers are still a large part of our marketplace. They realize that New York is a world class city and find our values to be low compared to other major cities worldwide. Europeans are particularly advantaged because of the Euro/dollar relationship.
However, Asian and South American buyers are still bullish on New York and are putting their money where their mouth is by buying residential real estate. They see the value available today and are taking advantage of this moment in history.
Mortgage rates are still astonishingly low allowing buyers today to leverage their purchase. The mortgage market is loosening the tough criteria it had adopted at the beginning of 2009.
The major banks are repaying the TARP money, and have been asked by the current administration to lend to those needing money for the purchase of a home.
Although lenders are not as aggressive as in the past, home sales are needed to further support this economic recovery. Once the banks adopt this strategy, it should further the residential real estate market in all segments.
Job creation fuels both the rental and for sale markets. The rate of unemployment typically lags behind the economy in the recovery process. Until we have clearly reduced the unemployment rate, recovery will continue at a slow pace.
However, as jobs grow in this market, recovery will also accelerate. The groundwork is in place.
And there is life beyond Manhattan, Jersey City is the star of the Gold Coast, now a residential destination of its own. Both sales and rentals have been brisk throughout the end of 2009 and into 2010. There are great opportunities for those who find Manhattan prices still just a little too expensive.
Brooklyn is making a resurgence. Areas that are established, like Brooklyn Heights, are seeing closings of sales made in 2009 at values higher than the average asking prices for those areas.
Inventory even in Williamsburg, which had the bulk of the building activity in Brooklyn, is diminishing and prices are stabilizing. There are opportunities everywhere!
Rentals in Manhattan have also tightened. As an average, owners were giving as much as three months concession in the fall of 2009. Now, owners are giving less than a one month concession.
The FiDi rental market still suffers because that is where most jobs were lost, but even there inventory is shrinking and concessions are also tightening.
For those of you considering selling your home, gear up for a spring market. Use this time to learn the marketplace, interview brokers to help you with this process, and decide how to best present your home to prospects.
Values may not have returned to those of 2007 for all homeowners, but they certainly are firming beyond those of 2009. It may be time to sell your old home and move up to a new home which has a better chance to ride the wave of appreciation as it grows in the coming months.
So for those of you considering a purchase at this time, now is the moment! Things are changing quickly and you no longer have the luxury of time. The market is getting stronger, inventory is dropping, prices are firming and buyers are coming out of hiding!
Bonuses are being paid in the financial sector this year and we anticipate this will further fuel the residential marketplace. If this purchase is to be your home, now is the time to find a home that meets your needs and elevates your lifestyle. Don’t let this moment pass.
Adrienne Albert, CEO
The Marketing Directors, Inc.
750 Lexington Avenue, 18th Fl.
New York, NY 10022