Stagnation in New York Real Estate Market

The U.S. economy continues to be on the upswing, with dramatic improvement since 2009. But the federal government has classified New York’s real estate market, especially the high end of the market, as being a bit stagnant. This is enough to cause the government concern, because the progress of the real estate sector is an important component of overall economic progress. And when other sectors are fast growing but one is lagging behind, it calls for attention. This is exactly the situation for NYC’s real estate market right now.

What factors could account for this? Could it be that people are experiencing financial hard times? Are individuals gradually diverting their attention away from real estate to something else? The questions are just so many and complex that it’s difficult to pinpoint the problem precisely. The only obvious thing is the fact that the luxury real estate market isn’t as fast-moving as it used to be. Perhaps people are trying to conserve in anticipation of rainy days ahead, instead of spending on luxury apartments.

Reports have shown that the city’s sales of both condos and co-ops have been rather slow right from the start of the year.  As far as rents of Manhattan apartments are concerned, they have been ranging between being steady to being slightly lower than the previous year. Rents in both Brooklyn and Queens have increased, but at slower rate compared to 2015. Both the rental and the purchase markets of high end real estate have experienced sluggishness indicating excess supply. This has been the general observation all over the city for high end units.  The reason for this market stagnation is the presence of too many high-end luxury apartments, in excess of the demand for them.

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