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New York City Real Estate Rundown
Week of March 12th
Thomas Moran
March 12, 2024
Market Pulse
This past week Manhattan's luxury real estate market has been active, proven by a slight increase in activity with twenty-eight contracts signed at the $4 million and above mark, nudging ahead by one from the prior week. The preference for condos over co-ops is clear, with a decisive 20 to 4 lead, complemented by four townhouses entering the fray. Reflecting on the year's opening quarter, the market nearly mirrors its preceding year's performance, registering 235 deals against last year's 240, despite facing a discernible shrinkage in sponsor deals by 24%—a shift from 88 in 2023 to 67 in the current year, potentially attributed to a tightening grip on new development inventory. The financial figures tell a story of robust engagement, with the total weekly asking price sales volume touching $197,210,985, alongside an average asking price that stands tall at $7,043,249, and a median that positions itself at $6,200,000. However, beyond these figures, a significant undercurrent shaping this activity appears to be the growing confidence among buyers and sellers in the prospect of lowering mortgage rates. This optimism is catalyzing a more active market, as stakeholders anticipate more favorable borrowing conditions and increased competition
Key Statistics for Last Week's Luxury Real Estate Contracts:
Total Weekly Asking Price Sales Volume: $197,210,985
Average Asking Price: $7,043,249
Median Asking Price: $6,200,000
UrbanDigs
Top Sale
1 West End Avenue 29B | Compass
The top sale of last week's luxury real estate market in New York City was apartment 29B at 1 West End Avenue, which closed at an impressive $17,950,000, down from its initial asking price of $19,500,000. The duplex condo, boasting a generous 5,302 square feet, is the epitome of luxury living, featuring four bedrooms, 5.5 bathrooms, and a 33-foot great room with double-height ceilings that lead out onto a sprawling 3,299-square-foot terrace. The residence is further enhanced by an upstairs library, offering a quiet retreat. The building itself, home to 245 units, provides its residents with unparalleled service and amenities, including doormen, a concierge, a garage, a 75-foot swimming pool, fitness center and spa, terraces with cabanas, and spaces dedicated to children’s play, media, billiards, and games, alongside ample storage. The property caught the eye of a family from the Upper West Side, who, after first viewing the unit in December and embarking on negotiations in mid-January, have now made it their own.
Federal Investigation of Mayor Eric Adams
Bloomberg
Despite prevailing market optimism for an impending decrease in interest rates, fueling increased market activity in NYC, recent inflation data suggest a more cautious approach by the Federal Reserve. February's core consumer price index (CPI), excluding food and energy, rose by 0.4%, marking a 3.8% increase from the previous year, signaling sustained inflationary pressures. This trend underscores a potentially longer timeline for any rate reductions, as the Fed aims to navigate inflation dynamics carefully.
The core CPI's consistent rise over recent months highlights the underlying inflation trends that are likely to influence the Fed's decision-making process. With core inflation rates remaining above expectations for consecutive months, the immediate prospect of rate cuts seems slim. This persistence in inflation, particularly noted in shelter and service costs, reflects broader economic pressures that may delay the Fed's actions towards easing rates.
Given the current economic indicators, the anticipation of lower interest rates in the near term appears optimistic. However, it is crucial to understand that real estate investments are not solely about timing the market but rather the duration of time within the market. Currently, NYC faces a notable lack of inventory in the residential sector, which presents a unique opportunity for transactions. The rationale is straightforward: securing real estate assets now, before any potential rate decreases, could position investors and homebuyers favorably as prices are likely to escalate once the easing begins in response to softened monetary policy.
FreddieMac
The essential takeaway for our clients revolves around the strategic timing of real estate investments. In a market as dynamic and resilient as New York City's, the focus should be on leveraging the current conditions—where the anticipation of future rate cuts and the existing inventory shortage intersect—to make informed decisions. The prospects of substantial price increases post-rate adjustments provide a compelling case for engaging in the market sooner rather than later. While the broader economic indicators suggest a cautious approach by the Federal Reserve concerning interest rate policies, the underlying strength of the NYC real estate market, coupled with current inventory dynamics, offers a strategic window for transactions. The wisdom in real estate investment often lies in the long-term view and the understanding that the value derived from time spent in the market frequently outweighs the timing of market entry.
NYC's Midtown Rezoning Plan for Residential Housing
NYC Department of City Planning
The Adams administration's ambitious plan to rezone Midtown's industrial zones aims to create approximately 4,000 new homes, leveraging the area's untapped residential potential. This initiative focuses on converting 42 Midtown blocks, historically designated for industrial use only, into a vibrant mixed-use area. Spanning between 23rd and 41st streets and bounded by Fifth and Eighth avenues, the plan includes parts of the Garment District and sections of Flatiron and Chelsea known for their loft-style architecture.
This transformation, dubbed the Midtown South Mixed-Use Plan, emerged from a conceptual phase into a detailed strategy after extensive public input. It proposes the introduction of up to 1,110 income-restricted apartments within a broader goal of creating around 3,975 new residential units. The rezoning will not only preserve manufacturing capabilities but also embrace R10 zoning—New York City's densest residential designation, currently predominant in Upper East and West sides. This approach aims to foster a dynamic live-work neighborhood, pivotal for the city's recovery post-pandemic.
The success of this rezoning effort hinges on the cooperation of local property owners and the legislative support to facilitate office-to-residential conversions and lift restrictions on residential density. The city plans to enact design guidelines ensuring new developments resonate with the neighborhood's iconic loft character, considering the area's overlap with historic districts like Madison Square North and Ladies' Mile.
This initiative represents a significant step towards addressing New York City's housing crisis, marked by the lowest vacancy rates in six decades. By creating a more inclusive urban environment, the Midtown rezoning plan is a key component of a broader strategy to make the city more livable and affordable for all New Yorkers .
Pick Of The Week
For those of you who might not know, beyond the bustling world of real estate, I'm avid the sports fan! With that being said, why not sprinkle a little fun into our newsletter? Every week, I'll share my "Pick of the Week" for sports betting. While my expertise is firmly in real estate, I think this will be an enjoyable twist for our readers. But remember, it's all in good fun and purely for entertainment – always wager responsibly!
Will Zalatoris & Jordan Speith
With the Players Championship unfolding this weekend, I'm have a bold selection for those who embrace risk. Consider betting on Jordan Spieth and Will Zalatoris to to win outright, excluding competitors Justin Thomas, Scottie Scheffler, Xander Schauffele, or Rory McIlroy, at +2,200 odds.
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