Will you ever afford a home in New York City, where in 2015 the median sale price for a two-bedroom was $1.1 million?
If you’re a believer — and you should be — the time to look is now. “Spring is really the hot time of year for the sales market,” says Alan Lightfeldt, data scientist of NYC residential real estate authority Street-Easy. “It’s the most amount of competition, and ultimately, the most amount of supply.”
Lightfeldt gives us the scoop on the current market.
Buyers gaining power
“In the last few months, we’ve seen continued price growth in Manhattan and Brooklyn, and there’s no sign of it going down,” says the expert.
But before you start looking into Westchester, there are some bright points. “Unlike in previous years where we saw very, very dramatic price increases in the spring, we expect this spring to be somewhere muted,” says Lightfeldt.
“Prices will continue to climb, but the rate of growth will be lower than 2014 and 2015.”
The reason: Buyers are getting savvy. “What we’re seeing now is buyers who have endured years’ worth of record-breaking prices in Manhattan and Brooklyn finally taking a breather, pressing the pause button and being a bit more choosy with their purchases,” says Lightfeldt. “In January, we saw that in Brooklyn and Manhattan time on the market for homes was much longer than last year.”
This slowdown puts pressure on sellers who have become accustomed to bidding wars and receiving offers that are over the asking price.
“We’ve also seen, at least in Brooklyn, discounts are on the rise as well,” says Lightfeldt. “That’s another indicator to us that buyers are able to wrestle more power at the table. They are negotiating more discounts and, at the same time, taking some more time to buy.”
All signs point East
“East Brooklyn — where I would include Crown Heights and Bed-Stuy — is the area of the borough that is seeing the most price growth,” says Lightfeldt. According to StreetEasy’s January report, prices in the area grew more than 25 percent from last year. “This is the highest growth year-over-year of any submarket in the city. And it’s the highest annual growth that we’ve ever seen at StreetEasy,” he says. The silver lining is that although prices are growing the fastest in that general area, they still remain relatively low compared with the rest of the borough. “There is something happening in East Brooklyn,” says Lightfeldt. “And it’s directly related to affordability. And more buyers are opening their search to neighborhoods like East New York, because of really high prices elsewhere.”
Hot neighborhoods for ’16
“We calculated, using an index, what neighborhoods are prime to see the most new demand in 2016,” explains Lightfeldt. It’s no surprise the results were mostly in Queens and Brooklyn. No Manhattan neighborhoods made StreetEasy’s Top 10 list. “Really what they all share is access to the subway and relatively low prices,” says Lightfeldt. “As far out as Jamaica is — and I love to highlight this — it’s actually highly connected. It’s easy for you to get to Long Island or into the city. With any of our top 10 neighborhoods, it really is a story about affordability, and more New Yorkers moving further away from Manhattan and Brooklyn to find value. They’re doing that in neighborhoods like Jamaica Estates or Woodside or Midwood. These are the areas that New Yorkers are turning to. It’s not Manhattan or prime Brooklyn.”