The new US tax law implemented on January 1, 2018 has created significant background noise in the media. If you look at the fine print, however, the law will be a boon to many corporations and real estate investors, including foreign buyers. For current homeowners, it's a bit more complicated, as uncertainty around the law has tilted the market toward buyers. We are now in a buyer's market, but for how long, we don't know. If you are looking to purchase a Manhattan luxury condo, now may be time to make the move. We wrote an in-depth review of the tax reform effects on Real Estate investors and home owners that will help clarify the situation.
The new tax code definitely created a jittery market and is reflected on the latest NYC condo sales market reports, causing activity in Q1 to be down about 10% the same quarter last year. This weakness in volume was found across price points, as people waited to flesh out the impact of the new tax reform, but was especially felt most in the high end, in the $5-7 million and over segment. There’s a huge inventory of luxury properties in this segment targeting affluent buyer and sellers are now finally negotiating in that segment.
It is worth noting that many luxury buildings in prime Downtown Neighborhoods like NoHo, SoHo, Tribeca, West Village and Flatiron, and the core of the Upper West Side are fairing quite well. Well-priced condos are moving fast (pending sales are up over prior month and year) and we are still seeing 20% of deals being made above asking price, not an insignificant number.
Taking a look at new developments condos in the city, we are noticing that the phrase location, location, location definitely helps developers when marketing their properties for sale. Luxury buildings like 40 Bleecker in NoHo (featured image) and 250 West 81 Street in the Upper West Side are seeing brisk sales being just a few months on the market. Just as one example, one of our clients recently purchased an $8.5 new development condo at Madison Square Park and only got a $100k discount because the pricing was right. Of course, the apartment is unique and the building is located in the right neighborhood.
For the one in the Upper West Side, 250 West 81 Street (below), the chosen architect is the acclaimed Robert A. M. Stern who has designed some of the most important luxury condo buildings in NYC, such as 15 Central Park West, Superior Ink, 20 East End Avenue, 520 Park and 220 Central Park South. While the prices at some of his other buildings are out of reach for most, pricing here is much more reasonable.
For 40 Bleecker (featured blog image), for us the buildings' appeal is the combination of being located in a celebrity magnet neighborhood and the well thought out architecture that matches the neighboring properties while offering exclusive luxury boutique living. Is important to remind that the 12-story building by Rawlings Architects and interior design by Ryan Korban, will offer only 61 residences.
When listings are well-priced, we are seeing that these units are moving quickly at this beginning of the Spring season for buyers looking for condos in the $1mm - $2mm range. Otherwise, sellers that don’t adapt to the current buyers market, will see their properties sit longer on the market, changing broker hands and future reductions.
To finalize, looking at the big picture, the US Economy and New York City, in particular, have been experiencing strong economic performance in early 2018 and this explains the strong buyer demand that we are seeing out there! Below are some stats:
New York City employment rose to an all-time high of 4.426 million people. NYC gained 702K jobs since 2009, an 18.9% increase, the highest increase since WWII and much higher than the nation, which added 11.5% new jobs. Technology, media, healthcare and tourism-related businesses were the industries that drove the most hiring over the last 10 years.
Dow Jones average has increased 25% since one year ago, clocking in at 25,000. With almost all companies reported for 2017, 75% of companies reported that their fourth-quarter profits beat expectations.
Unemployment Rate is 3.9%, the lowest rate since 2000.
Manhattan Miami Real Estate’s main niche is helping buyers and investors looking to purchase luxury properties in New York and Miami. Keep abreast of the latest Manhattan & Miami real estate market news or learn more about our services below:
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