Dear Friends,

A lot can be said about the opening of 2016; most of all, it certainly wasn't boring. This is due to a cooled-off real estate market, financial market turbulence, crashing oil prices, a “colorful” presidential campaign, and one very mild winter that made it interesting for us all.

With so much drama, nervousness can cause some to pause. It’s therefore no wonder that the real estate market in New York City slowed during the beginning of this year. To make matters worse, our presidential candidates can’t seem to stop talking about our country’s problems (which of course, only they can solve).

Personally, I’m with Warren Buffet, who in his annual shareholders letter released Saturday 2/27, wrote that the politicians are “dead wrong”. He says, “The babies being born in America today are the luckiest crop in history. American GDP per capita is now about $56,000 – six times the amount in 1930… America’s economic magic remains alive and well.”

Zooming in on our market, I also think that a decrease from over 3,600 transactions in the 3rd Q 2015 or 2,973 in the 4th Q 2015, to a more sustainable level, say 2,200 – 2,500 transactions for apartment sales in Manhattan, is not necessarily a bad thing. Rapidly rising prices, tight inventory and bidding wars should be the abnormal, not the normal.

Looking at several new developments we are working on and our city’s new development projects, new condos will have to be very “gentle” with their pricing, and offer a much better product to beat the competition and sell apartments. Resale product (apartments for sale, not in new developments) is still very tight. Buyers today are faced with a less-than-ideal selection of properties, yet at the same time, rising rents and low interest rates still make a compelling case for buying.

Overall, I’m optimistic about 2016 and looking forward to seeing mild price growth, additional resale inventory, beautiful, high-quality new buildings, and an early Spring!

The fantastic image above is a rendering from our featured new condo project at 100 Norfolk in the Lower East Side, with an expected closing the end of the year.

Thanks for reading, and have a beautiful ‘pre-spring’ season!

Ariel

2016 | What can you expect of the spring market?