NYC Real Estate

How NYC’s Real Estate Market Continues To Change

As one decade ends and another begins, the New York City real estate industry is taking all it’s learned within the past ten years and applying it to 2020. Throughout the past decade, there’s truly been a shift and growth within the cities real estate market. Brooklyn has become a hub for millennials and young families, Manhattan has gotten pricier as always, and Harlem is going brownstone. The east coast concrete jungle is forever changing with the times and as 2020 approaches, agencies are preparing to keep up with that change. 

One of the major changes that’s taken over the city within the past decade is how many more condos have been built. Unfortunately, this trend isn’t exactly succeeding, as according to Bisnow Magazine, Manhattan currently has more than 9,000 condominium sale units still empty. Real estate agencies are blaming the constant influx in real estate prices in Manhattan; no one can afford the borough. 

“Everyone has seen the reports of unsold apartments, about 30% of the apartments sold have come on as shadow rental inventory. I do think we will see some repricing in the condo space,” Michael Givner, A Morgan Stanley Executive Director, said.

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Givner went on to discuss how condo repricing has already begun, and ever since Labor Day the industry has seen an increase in buyers as a response to a decrease in asking price and inclusion of more incentives. Prices in the city are becoming more negotiable through corporate sponsorship; however, the results haven’t been as successful as expected. 

Many of the residential buildings in the city are built around the same time, that’s how overall neighborhoods change in an instant. So while the demand may be there, the supply can tend to overcompensate. In addition, agents are noticing an increase in office space rentals over residential renting in areas of Downtown and Midtown. While the leasing market may be thriving through this process, the fact that more residential families aren’t moving into these spaces that were constructed for their market specifically hurts the industry in the long run. 

When certain areas of the city begin to be known as areas of business, or office spaces, that branding serves a long term impact, and it becomes way less likely that the intended market for that area will actually fill the space. That’s what agents are seeing happen in the Mid/Downtown areas. 

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“One of the millennials in my office said that Midtown is where fun goes to die. 2020 will be an interesting year to observe how Midtown rebrands itself. How long will it take, who will it attract and how will it evolve over the next 10 years,” said Colliers International NY Tri-State President Michael Cohen.

It’s also been reported that the hotel market in New York City has remained fairly stagnant for the past few years. While “stagnant” may not mean “declining,” that doesn’t mean it’s a good thing either.  A flat real estate market means not enough profit is coming in either and when it comes to the city’s hotel industry that’s what’s seeming to happen. Because of overall rising room costs, in combination with an oversaturation of hotels in the city and increase in popularity in services such as Airbnb, the industry just isn’t thriving as it used to. 

“The important thing that we found, in hospitality, is managing expenses and keeping a lean staff providing what guests want when they come to New York City. The hotels we are building have a great room, a clean bathroom, not a lot of amenity space and not a lot of staff, and what we found is that’s a recipe for success.” said Hidrock Properties CEO Abie Hidary.

While aspects of New York City’s real estate market haven’t exactly kept up with all the development it’s seen, agencies are learning from the mistakes of the past decade. As stated above, the hospitality industry is mainly focusing on what’s working and delivering that to its clients. That’s the general consensus over how to handle any and all of the problems in the industry, especially in the city.