It’s in the numbers: New York City dwellers are leaving renting behind, and taking the plunge to buy homes. Here at New Construction Manhattan, we recently reported on the high number of sales within Manhattan's real estate market, noting how lower-priced units are being bought at exceptionally fast rates. There has been a surprising spike in sales of studios and one-bedrooms, and with the spring being the busiest time of year to purchase a new home, it's safe to say property ownership in New York City will continue to increase.
The surge in sales of studios and one-bedrooms is primarily attributed to those looking to buy a home for the first time. The units, classified as entry-level apartments, are being picked up by buyers hoping to take advantage of the market's current state. With a high demand of rental units, and such a low supply, the price to rent in Manhattan is skyrocketing, and because it so expensive to lease, owning is becoming an attractive alternative.
First-time buyers are highly price-sensitive, and purchasing an entry-level apartment allows them to make a financial investment, instead of simply throwing money away. Additionally, interest and mortgage rates are at an all-time low. After years of falling numbers, home values have finally bottomed out, and first-time buyers have taken notice; even buildings that are under construction are being sought after. For instance, 422W20 is a 37-unit luxury condominium building that launched sales at the end of March. By the first week of April, 62% of the units at the Chelsea apartment complex had gone under contract for purchase, with only one one-bedroom unit was left available.
Clearly, confidence has returned to Manhattan's housing market, as people are beginning to feel secure about jobs again. With home values bottoming, buyers will continue to jump on property purchases. Many are finding that owning is not only cheaper, but also smarter, so we can undoubtedly say the entry-level buying market is back in New York City.