KSI Realty New York Inc.’s Broker and President, Marc-Henri J. Kijner, attended the first REBNY Residential Sales Council of the year. Were present, managing Brokers from top firms in Manhattan, inclusive of Senior Lending Officers Todd Meyers and Sari Rosenberg from Citibank who gave us a state of the current mortgage sector with rates for 30-year conforming loans averaging 3.43%. Their expert insights enable us Brokers to convey the best mortgage strategy to our clients. John Banks, REBNY President and Michael Slattery, Senior Vice President of Research as well as Gregory Heym, Executive Vice President, Chief Economist Terra Holdings, LLC joined in with invaluable information.
The discussion started with updates from Gregory Heym who highlighted the economic growth contraction in NYC. He attributed these to several factors such as the slowdown in hiring and business investments in the second quarter of 2016 and the restrained growth from the NY economy at 1.7% annual rate down from the prior quarter but still above the national rate of 1.1%. The timid employment rebound shows that job creation is still the number one factor in determining how well the economy does as people can project themselves with home purchase when they have the stability of long term income from a steady job. The mortgage rates have been stagnant over the past summer due to the Brexit fear (the UK vote to exit the European Union), the low gas price and the sluggish optimism that the US election is instating into people’s mind. Many are in a wait and see position although there are no real quantitative data that substantiate whether Hillary or Donald will have either a negative or positive impact on the NY economy.
The below $3 million market in Manhattan is still very hot and sees a very low day on market turnover. The $3 million and above market is neutral and the top market is much softer due to the previous reasons highlighted above. The easiest way to gauge the state of the real estate market is by looking at the absorption rate which is the rate at which new properties stay on the market before being sold. This shows us whether we are in a buyer’s market or seller’s market. It is currently considered a seller’s market for anything below $3 million, a neutral market for the $3 to $10 million market and a buyer’s marker for anything above $10 million. As a result, high-end luxury properties will most likely see a correction in pricing as there has been 6 years of continuous growth. A market cool off is the best time to negotiate that luxury coop or condo you have been looking for to acquire for a some time now.
Spring of 2017 will be an important date as it will determine the landscape of the real estate market for the remainder of the year.
We discussed further topics such as the AIRBNB crackdown, the EB5 programs and the impact of foreign buyers that are crucial in the continuous support and growth of our market in Manhattan as well as the changes seen with the 421 A program for affordable housing.
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