Andrew Heiberger, Founder and CEO of Town Residential, shared some of his thoughts and predictions on the Manhattan real estate market for 2012. I think these points should be very helpful for buyers, sellers, investors and renters trying to navigate the Manhattan real estate market in the upcoming year.
If I were renewing a lease right now I would try to extend for two years if given the choiceOn the Manhattan Sales Front:
If I were renewing a lease right now I would try to extend for two years if given the choice
- I believe that prices and price per foot in all parts of Tribeca, the far West Village, Noho, and west of Park Avenue on the Upper East Side will rise the most due to a lack of supply. The same is true for townhouses and other single family residences, where quality supply is also limited.
- Overall I believe 2012 will see more sales transactions and slightly higher prices in Manhattan, with the market buoyed in part by interest rates remaining at historic lows during this upcoming election year.
- People still have faith in home ownership, especially in Manhattan. Together with an abundance of international buyers as well as affluent buyers from around the United States, the demand has remained strong for Manhattan real estate.
New Development Sales Market:
- I believe Gary Barnett’s One57 will be a grand slam and THE success story of 2012. Its success will also pave the way for other super-high end developments in and around the Plaza District to its east, including the much-anticipated development at the former Drake Hotel site.
- On the Upper East Side above 57th Street there are at least six major luxury developments, both ground-up and conversions, expected to file offering plans in 2012. We expect prices for many of these properties to start at $2,500/sf and likely exceed $5,000/sf in some cases.
- In Soho, the far west village, Noho, the Chelsea Highline area, and all parts of Tribeca, it will be the year of the boutique condominium. Many super high-end new construction projects and well-conceived conversions are proceeding and expected to come to market. I believe they will sell out very quickly with prices starting at $2,000/sf and ordinarily capping out at around $4,500/sf. In other parts of Manhattan such as Hudson Yards and the East 30’s to 50’s, it is more likely that we see most new developments built as rentals.
On the Manhattan Rental Front:
- The vacancy rate will remain low, and rents are sure to rise starting around the 2nd quarter. If I were renewing a lease right now I would try to extend for two years if given the choice, because once employment numbers pick up rents will jump even further to record highs.
- Low mortgage rates are keeping rents in check because the alternative of buying becomes feasible once you approach the $80/sf threshold for units under $1.5 million.
As the Manhattan real estate market is constantly changing, contact me if I can expand on these points. I also have many rentals available at varying budget levels on my listings page. Please feel free to give your comments below.