As you already know if you follow Manhattan real estate or read this blog, the market for luxury condos in New York City has recovered almost completely from the crash of 2008. 2011 was a pretty good year for real estate in Manhattan. Condos sales had a banner year in Upper Manhattan and Harlem, and the market more or less avoided the usual slump that’s expected with the early winter months. To ring in the new year, the Real Deal polled a group of real estate experts and industry insiders to get their predictions on how the market would play out in 2012. What they said wasn’t particularly surprising; most of them agreed that this year would see a continuation of last year’s trends. But, good news for all, they provide an overall positive view of the market for luxury condos in Manhattan.
There was basic overall consensus that certain trends we saw last year would only continue. The historically low interest rates won’t budge until after the election in November. The growing Euro crisis indicates wealthy foreign buyers will continue being a large presence on the market. And the concentration of wealth in Manhattan will likely keep the market for ultra-luxury condos even healthier than the market overall.
Individual predictions implied certain new shifts, but nothing drastic. Most of the experts agreed that prices are likely to increase, but disagreed on how much. One expert said increased rent prices would push condo prices slightly up, while another said they would rise substantially. One industry insider said condos in the Tribeca, the far West Village, NoHo, and west of Park Avenue neighborhoods would be more expensive, because inventory is especially scarce. Another said that price increases would cause developers to build smaller houses for middle-income families.
There were a few breaks from this consensus positive image. One expert predicted that houses—particularly older houses—would linger on the market while owners tried to gauge their accurate value. And a single renegade expert contradicted all the others by saying that an increase in housing foreclosures would send prices down.
Assuming the experts are right, and nothing wholly unpredictable pops up, 2012 seems to be another healthy year for the market. It’s a good time to be an owner, and possibly an even better time to be an investor. For those looking for a place to live, we recommend neighborhoods with higher inventory. Harlem, Midtown West, and the Lower East Side are all good bets on that front. There are also several new buildings scheduled to go on sale in the Lower West Side this year that should positively increase activity.