Real Estate Market in NYC: What to Expect in 2023
Jan 19, 2023 brooklyn,Brooklyn Buyers,Brooklyn Buyers Agent,brooklyn landlord agent,Brooklyn Landlords,brooklyn real estate,Brooklyn Renters,brooklyn renters agent,brooklyn sellers,Brooklyn Sellers Agent,real estate trends,realty collective,trends
The real estate market in NYC is a dynamic one, with the value of homes and apartments being affected by a number of economic and cultural factors. Let’s take an in-depth look at the 2023 NYC real estate forecast, so you have a great idea of how to navigate your real estate purchases this year.
Renting in New York City 2023: Returning to a more normal search
With the city slowly recovering from the pandemic, will the rental market return to its pre-COVID pattern?
In 2020, prospective renters found themselves in an extreme sellers’ market. The competition was intense and most applicants had to provide extensive documentation to secure a lease. Additionally, many landlords utilized technology for virtual tours and other measures to facilitate time-saving and socially distant applications.
In 2023, we expect that the process of renting in New York City will be more traditional with prospective tenants researching neighborhoods they are interested in, touring rentals online, and meeting with landlords face to face.
Answering the tough questions: Will rent go down in 2023 NYC? Is now a good time to rent in NYC?
At the end of 2022, New york city rents closed out at near-record highs. Records highs soared during the spring and summer months, with Manhattan’s average rent passing $5,000 in June and median rent of $4000 for the first time in May, reported Douglas Elliman.
But with that in mind, bidding wars are falling out, concessions are showing back up again, for example, 1 or 2 months free, and rents are not increasing in price. Allia Mohamed, CEO of rental listings and building review site Openigloo said a more stable year for renters is predicted.
As more people look for lower rent prices out of the city, excess inventory could drive down costs in the short-term while high-end apartments remain unaffected by these trends. Additionally, tenants may have more bargaining power when it comes to leasing an apartment in 2023 since landlords will be competing for limited customers and we also might see the Good Cause eviction legislation come to fruition.
Buying Property In New York City: Prices and rates remain the same but where is the competition?
If you’re expecting the prices to fall, you’re surely mistaken. This is NYC after all. You can expect small discounts in 2023 or at least, negotiability on closing costs and other perks.
But on a good note, some buyers are getting spooked making competition for apartments to buy in New York City, scarce. This is because buyers are in what the Brick Underground is calling the “wait-and-see mode”. Buyers are waiting to see what will happen to mortgage rates.
Other trends that are being predicted are lower inflation, leading to lower borrowing costs, the market reverting to seasonally appropriate levels according to UrbanDigs, and sellers might become more negotiable. But of course, as always buying depends on your individual situation and financial capacity. Generally, if you can afford to purchase the property outright, or you have a steady income that will help with making mortgage payments, it could be a great time to buy property in NYC.
See houses for sale in Brooklyn NY, by clicking here.
Trend Alert: Finding deals at new condo developments
Developers Construction of brand-new condo buildings has started offering incentives to close deals, especially if sales are low. There is a 15 percent threshold required for the project’s approval by the Attorney General’s office. Some of those deals may still be around in the first quarter, says Dawn David, a broker at Corcoran. Buyers may want to consider this segment of the real estate market in NYC.
New developments are also becoming greener! More New York City projects are including Passive House Design. The concept uses airtight construction to reduce heating and cooling costs while improving indoor air quality. Similarly, are buildings being LEED Gold certified and NYC buildings going electric to comply with Local Law 97, which reduces energy emissions and results in cleaner air quality?
Selling NYC: Will Buyers return?
Yes, buyers are expected to return to the city as montage rates stabilize. Throughout 2022, mortgage rates kept increasing little by little. This caused sellers to retreat from the market. Here is a fun fact: 84.4 percent of owners in New York State have a mortgage rate below 5 percent, according to first-quarter data from Redfin. This discourages sellers, after all why give up a low rate to borrow at a much higher one?
What do we need to see happen?
Well…There needs to be a surge in new listings, creating a sharp drop in prices, and being that competition is thin, listings are sitting for longer.
What can sellers do for now?
First, start entertaining the idea of negotiating, the market value of the property has decreased since it’s been up on the market.
Second, Consider lowering the price of the property. Buyers still believe prices are still high and the listing prices are not meeting buyer expectations, according to UrbanDigs. Because of this sellers are likely to be in a holding pattern till spring.
At the end of the day, every situation is different, which is why working with a buyer’s or seller’s agent is always a smart move. We have seen it all! So if you are considering buying a new home or selling in 2023, reach out today to get a free consultation.
If you’re interested in learning more about the buying or selling process, download our free Buying Into Brooklyn Ebook or Seller’s Guide. We share a ton of valuable resources to demystify the Brooklyn real estate based on 20+ years of experience.