While New York real estate boomed in 2015, the United States saw prices start to flatline in the second half of the year, possibly providing a preview for 2016.
While the demand for New York real estate will remain high for the foreseeable future, there are mixed signs as to what might happen with the country’s high-end market as a whole. Domestic and international economic factors will play a role in prices, while a growing millennial market could begin to impact what amenities are offered.
“As Internet technology and social media continue to evolve, younger generations are adapting quickly to a variety of options offered in the real estate market,” said Javier Lattanzio, director of sales at Time Equities Inc. “With so many factors to consider such as location, views, architecture, interior design and quality of lifestyle, coupled with increased access to data, there is increased competition between buildings.
“Working in the TAMI (technology, advertising, media and information) and financial industries, high earnings among millennials allow this group to afford luxury residences that offer a desired lifestyle and amenities that are convenient,” he said.
“New developments are now thinking outside of the box, by offering a wide variety of amenities such as jet concierge services, valet parking, unique programming for residents of different age groups, observatories, luxury spa services, pet-friendly facilities and on-site work spaces, among features, to appeal to this demographic.”
Youth in the market
Millennials are likely to make up the largest portion of home buyers in 2016, with young Generation Xers (aged 35-44) also making up a significant portion of the market. While the statistics might not hold out on the high end of the market, the shift in the overall real estate market could have an impact.
In a real estate prediction statement, property developer and business strategist Borix Mizhen anticipates, “In 2016 we can expect to see builders move away from their focus on luxury homes and rise in more affordable products.” If construction of luxury units falls, it follows that prices will increase due to a supply-demand imbalance.
This is particularly true in New York, where the recent financial crash is a distant memory and prices are soaring, which could lead to eager buyers hoping to enter the market before being priced out.
“For home buyers my advice would be not to hesitate – prices are rising and time is your enemy,” said William Ross, senior vice president managing director, Halstead Property Development Marketing for Downtown Brooklyn and Brooklyn Heights.