Stephen G. Kliegerman
President of Development Marketing
New York City was one of the few shining gems in the country's flailing real-estate market this year, with high rental and purchase demand and steadily increasing prices. But will the Big Apple's good luck carry over into 2012? Real estate experts are placing their bets on five trends in the city's booming market next year.
Investment in new development
You might see a few more skyscrapers in the skyline.
Low interest rates and continued strength in NYC's rental market will draw major investors to put their money in new developments here, said Stephen G. Kliegerman, president of Halstead Property Development Marketing.
"These low interest rates have driven more investors to real estate, as they have very few tangible investment options that offer as great an upside potential as New York real estate," Kliegerman said.
And guess where some of those investors might be coming from: Wall Street.
"With rents skyrocketing and Wall Streeters wary of betting on the house, they will choose to invest [their bonus money] in new developments rather than the currently unpredictable stock market," Kliegerman added.
Overseas investors will be particularly attracted to NYC development, said Gary Malin, president of realty firm Citi Habitats, because - yes, you're reading this right - the city is still a deal.
"The fact is, New York is still a bargain when compared to other international cities," Malin added. "Wealthy people in emerging economies see NYC real estate as a safe bet."
Want to own? Do it now!
Given that rental prices are close to record highs and mortgage rates near record lows, doesn't it make sense to go ahead and purchase your next home?
On top of that, inventory in the rental market is getting tighter, so the squeeze "may push more clients into purchasing in 2012," Malin said.
Also, there may not be a lot of time left to score a good deal.
"Now is a golden opportunity for [people] to purchase before the economy improves and prices rise," Malin said.
Buy before it's built
As real estate inventory shrinks and demand for housing remains high, developers will offer great deals on apartments in complexes that haven't even begun construction yet.
"Buyers will capitalize on the ability to leverage prices and avoid bidding wars with pre-construction sales, which will result in renewed sales momentum for developments still under construction," Kliegerman said. "A number of our clients are considering beginning sales prior to having an on-site model due to high demand and low competition."
No crazy amenities
If you were looking forward to getting a facial at the spa in the lobby of your building - well, sorry.
"Developments across the board will feature fewer over-the-top amenities, as many buyers do not want to pay high costs associated with their upkeep in maintenance and common charges," Kliegerman said.
It's a lot like when you see an expensive pair of shoes that you don't think you can live without - until you let the purchase price sink in. Do you really need a rooftop deck with a swimming pool, cabanas (and cabana boys), a fully stocked bar and waiters carrying hors d'oeuvres? Scale it back.
"Buyers today are more practical and are looking for value," Kliegerman said.
The kingdom of Queens
The Atlantic Yards' 15 minutes are up; when it comes to new developments, the next big locale is fit for Queens.
The borough's waterfront should explode with new projects in 2012, Malin predicted.
Why? "There is available land for development, which is rare," he said. And past projects there have rented or sold quickly, proving that the area is viable.
Also look for increased development activity on Manhattan's Far West Side, Malin said.
Tuesday, December 27, 2011