New York real estate in a holiday mood

The American economy is continuing to grow from a “modest to moderate pace” from early

October through mid November-2013, as per the Beige Book report of the Federal Reserve.

The Federal Reserve releases the Beige Book eight times a year that reports about the

business conditions in each of the Federal Reserve’s 12 regional bank districts. The

economic growth as per this report in the Second District – New York has continued at a

moderate pace ever since the last report. Both the commercial and residential New York

real estate markets have seen mixed results since the last report.

Economists are predicting that there may be continued home price appreciation nationwide

even though at a slower rate over the next few wintery months. Buyers and sellers should

anticipate a seasonal holiday slowdown in the real estate NYC market. The contacts in the

western New York State was robust in October and early November. The sales volumes of

the available New York properties for sale have been exceptionally strong with the

prices continuing to rise and there are ongoing reports of multiple offers and price wars. The

multi-family construction is continuing to experience moderate to strong growth with the

strength concentrated on the apartment segment. The vacancy rates declined within the

real estate NYC.

The sales activity in the New York City’s co-op and condo market has retreated during the 4 th

quarter preceded by an exceptionally strong third quarter with the prices having leveled off.

There is however, a reasonable amount of new development in the available luxury home

sales at the high end of the market. Inventories across the rest of the market remained

lean. Manhattan’s renal market has also softened slightly with the rents running modestly

lower when compared with the previous year. Single-family construction in this city remains

weak amidst a fair amount of multi-family development in addition to renovation and

alteration work.

The commercial real estate market has produced mixed results in the fourth quarter. In

Manhattan, the outer boroughs, and Long Island the office vacancy rates continued to

decline while the asking rents continues to rise though modestly for the available New York

apartments for rent and for Class A properties. Nevertheless, in the Westchester and

across upstate New York vacancy rates climbed to multi-year highs. The international real

estate buyers off late have changed their real estate investment plans due to economic

crisis. Industry experts opine that there occurred major repercussions within the major

sources of international capital in addition to a major shift in the investors’ plan for investing

in the real estate.

According to the Real Capital Analytics (RCA) data, real estate buyers from Asia both

consisting of individuals and institutional funding organizations have increased their stake in

Manhattan property from under $200 million in 2010 to $1.36 billion in 2012. During the

same period, Australian investors and investors from certain European countries especially

Germany have exited from Manhattan real estate market. International real estate

buyers and investors have started to make investment directly in the Manhattan real estate

market by providing equity or debt financing to a local developer instead of investing in a

real estate investment trust. These investors want to have a direct control over their

decisions instead of depending on third party transactions.