Buying Real Estate in Manhattan

manhattan skyline

If you were unable to join us on Tuesday, 2/7, for our presentation on “Buying Manhattan Real Estate”, and you are considering making a move to the city, below are some of the key points from the presentation.

The island of Manhattan is 88 km2 / 23 mi2. The population is 1.64M (July 1, 2015 U.S. Census Bureau Estimate). 64.2% of the Manhattan population rent (unchanged since 2015). The vacancy rate has been under 5% for six decades. By 2030 population will rise to 1.869M (city of New York Population Projection). For the first time in a long while, Manhattan is turning to a buyer’s market. Julia Hoagland, Manhattan Real Estate Agent, whose team has been the #1 ranked team from 2013-2016, said that she and her team have increasingly been able to negotiate with sellers and builders when that has not been the case historically. Other shifts seen in the Manhattan market include:

  • New development paradigm shift: supply, negotiability up; bedroom count, permits down
  • Rental market softening: inventory, concessions, vacancy up; rents, cap rates down
  • Fed increased fed funds 25bps; mortgage rates up 4.81% YOY but still at historical lows
  • Technology challenging Wall Street: Amazon, Google, Facebook all increasing Manhattan footprint
  • Strengthening dollar up against euro and pound; uncertainty abating effect
  • Brexit: mixed effect on Manhattan. Finance jobs increasing in NY; investment opportunities increasing in London/pound
  • Trump elected U.S. President

If you aren’t looking to live in Manhattan, but are considering buying an investment property, you might want to consider the differences between investing in a new property vs. investing in a resale.  Below are two examples:

100 East 53rd Street (New Development Condo)

  • 2BD, 2.5BA (1638SF)
  • Purchase Price: $7,325,000
  • Annual Rental Income: $360,000
  • Annual Costs (cc+tax): $59,556
  • NOI: $300,444
  • Cap rate: 4.1%

200 West End Avenue (Resale Condo)

  • 3BD, 2.5BA (1627SF)
  • Purchase Price: $3,875,000
  • Annual Rental Income: $144,000
  • Annual Costs (cc+tax): $40,392
  • NOI: $103,608
  • Cap rate: 3.0%

Are you intrigued to move to Manhattan but have a home to sell in Millburn Short Hills NJ?  If so, the Shannon Aronson team would love to help you sell your home!  The market is good.  In 2016, 299 homes sold.  The majority of the homes that sold were between 1 and 2 million dollars with an average of 47 days on the market.  The listing to sold price ratio was 98%.  2017 is off to a great start.  The number of homes under contract between January 1 and February 7 in 2016 was 14.  For the same period is 2017, that number is 27.  A number of factors go into determining if you need to sell before you buy.  These factors include financial package, optimum timing, preparing your home, and pricing.

The Shannon Aronson team would be happy to meet with you to walk through what is best for you and your situation.  You can contact us by phone at 973-637-0004 or via email at Shannon@ShannonAronson.com.  To learn more about current Millburn Short Hills NJ real estate trends, click here.  For more real estate information, please visit my website at www.NJRealEstateDirect.com.