Wow! Contrary to media reports, I have been busy as usual this year. My lack of posts each month is testament to that. We all have seen what has happened in the financial sector this year. While nationwide it may seem bleak, allow me to give you some insight into what it means here in NYC.
New York is primarily a city of renters. There are many people who own and sublease the unit for various reasons. The vacancy rate for rentals is above 1% for the first time in years. I expect this to plummet below 1% again with the changes in the financial sector. While this is still the best place to invest in over a 5 year period, the outlook by many is that there is only so much that the market can bear and that prices will plummet soon. I have lived here for over thirty years. I have witnessed firsthand the Bronx burning in the 70's, fire in the sky with towers falling at the start of this century and I can testify that is not going to happen. Sure, there will be more room to negotiate a price on a property that is a resale or in an older building. Places that are priced too high to begin with will sit on the market longer.
The last major change in our country was 9/11. Even after those attacks, the market here rebounded to levels never before reached. In studying the history of real estate in this city over the past 100 years, I have noticed that there is always a slight dip
for one or two out of every twenty years. After that, things continue to rise steady. Look at the link for sales figures of the last quarter sales2quarter2008.pdf . Now compare that with figures from the rental market 8-2008-mra.pdf and lastly, look at the market reports for 2002, just after 2001 may2002-oct2002.pdf also for 2006 bw2006.pdf . What you will notice is that there is one constant, rents continue to rise.
With more people than ever before assuming that the market will crash, do you really think rents will drop if the vacancy rate drops again due to more people renewing leases and renting as opposed to buying? For the first time since 2001, I noticed several landlords of high end rental buildings offering concessions to offset the cost of a broker's fee. They are looking to keep the building full. This is in order to keep the buildings at the lowest possible vacancy rate so that they can charge the highest possible market rent!
While not an option for everyone, if you have between a 10-40% down payment saved up, this is the perfect time to buy as many owners are fearing a drop in the market and thus a bit more negotiable than ever. Also, mortgage rates are at an all time low. This city is fast paced and not for the weak of heart. If you are even thinking about what to do in terms of renting or buying, call or write me for expert advice!
No comments:
Post a Comment