As someone who’s default sentiment is optimistic, times like these require a little patience.
Instead of some monolithic market from top to bottom, I am watching lots of mini-markets that do not operate in sync with one another.
We have the most recent absorption reports
that show quite a mixed bag.
Uptown on the West Side, apartments are moving, at all price points.
Upper East Side, quite a different story along Park Avenue.
Sales at the very high end for condos have slowed down substantially along 57th street and Central Park generally.
But these markets are not really connected other than that they both have seen the pricing pendulum sometimes swing too far out.
And so, a “Great Repricing” is occurring right now.
To my mind, a terrific sign that overzealous sellers are getting realistic as I’d hoped.
There are some great deals out there.
Some have gone as far to say (rather ineloquently) that “the next two years will be the year of the deal.”
Those sellers who get ahead of the market will sell
their properties, and those sellers who don’t will simply have to learn the lesson more painfully.
So- What can we expect into the fall season?
What will spark renewed level of sales?
Will we see a pickup of inventory at the low-end and mid-sections of the market?
What’s happening in Manhattan?:
- Too much condo 2-bedroom inventory downtown.
Some developers I work with are speaking about the downtown condo market being “frozen” or “paralyzed.” I’m probably most concerned about this part of the market
- A nice uptick of inventory for smaller apartments, but nothing insane.
- Rates are still very low- and purchasing power remains quite strong.
- Sellers are starting to accept lower offers without dropping prices. That is, it’s time for buyers to get more confident to make offers where they see value.
- There is amazing development happening downtown and in Hudson Yards.
This will forever change the complexion of Manhattan and is worth long-term investment for those real estate investors willing to tune out any potential noise (like what I’m writing here…)
- There are incredible things in Midtown East and Midtown West.
30’s, 40’s, 50’s.
Neighborhoods are filling in.
It’s just a question of how well these developments are going to be priced.
- Downtown, East Village, Lower East Side, Chinatown, Financial District.
So much happening, it’s hard to even process.
But it’s too early to tell how quickly all of this can be absorbed.
I hope that, more than anything, that the developments on the desolate parking lots of Delancey Street will all come to completion.
What about Brooklyn?:
- While we’re seeing a significant uptick of townhouse inventory, prime Brooklyn, like Williamsburg, continues to boom.
“Brooklyn is its own island” is one particularly positive quote I got from a prominent developer last week.
- We have seen prices for new developments in Brooklyn reaching extraordinary levels.
The Standish in Brooklyn Heights where they have come out at
We will see if that is achievable pricing for 1bedrooms.
Given its incredible location- 5 minutes from the
2/3 train at clark street.
That said, walking through Brooklyn Bridge Park this weekend, I completely understand the draw of the location.
It is stunning.
Walking towards Dumbo, the structural shift to residential neighborhood feels relatively completed.
While it is a bit overrun by tourists, I don’t think it is overwhelming in the way that Soho has felt for the last decade or so.
So, in short, I get it.
- That said, there is way too much rental inventory in Downtown Brooklyn.
So the purchase for primary use makes more sense for those looking long-term.
- Lots of repricing across Bushwick, and I suspect that when Streeteasy is advertising “Price Chops” all over brooklyn, then there’s already much, much more going on in this direction.
In all, it is shaping up to be a very interesting Fall market.