New York City is one of the most desirable and expensive places in the world to own real estate, though a recent dip in the market has made it ever so slightly more affordable in many places. Craig Nassi, the CEO of New York-based BCN Development, says real estate prices in the city have declined by at least 10% from their 2015 peak. He anticipates some further weakening in 2019, especially on the upper end of the market, driven by an influx of new units as well as a cooldown in foreign buying.
According to CoStar Group, there were more than 60,000 units under construction in the city as of early-2018, the most in any U.S city. Vacancy rates remain very low at less than 4%, about half the national average, and Nassi expects the market to stabilize by the end of the year, with a possible return to growth in 2020.
Wall Street Among the Districts Hit by Falling Prices
Little Italy, the Flatiron District, and the Financial District were three of the hardest hit neighborhoods in the city, with median prices in each district falling by at least 32% year-over-year. The slumping stock market during Q4 didn’t do any favors for the home prices in the Financial District, which fell by 34% to $1.06 million.
Median prices even fell by 18% in TriBeCa, one of the most expensive neighborhoods in the world, where the average sale set buyers back by a hefty $3.85 million.
Several districts enjoyed big gains though, including the Garment District, where prices were up by 41%, Greenpoint (up by 37%), West Village (36%), and Chelsea (19%).
Craig Nassi says that the year-over-year figures are often volatile however, and should be taken with a grain of salt, being heavily impacted by ultra-high-end developments, which skew prices up (during the year they become available) or down (in the year following their release). He points to the Flatiron District’s 32% year-over-year decline as an example, noting that dozens of luxury condos at Madison Square Park Tower were sold in 2017 at an average price of $6.5 million.
Manhattan, Brooklyn Remain Most Expensive Boroughs
New York City’s 25 most expensive neighborhoods are all in Manhattan and Brooklyn, with the top 7 and 16 of the top 25 found in Manhattan. Craig Nassi claims that Manhattan’s high-end market remains very strong, posting a double-digit surge in new leases costing $10,000 per month or more during the first four months of 2019, making it extremely appealing to developers.
Nassi himself recently purchased the Union Theological Seminary’s 90,000-square foot dormitory on Claremont Ave. in Manhattan with the goal of converting it into residential use after the school’s lease expires in a few years (the school is in the process of building a new dorm nearby).
Several areas of Queens are ranked among the 50 most expensive neighborhoods, while The Bronx and Staten Island were shut out of the top 50 entirely.
About Craig Nassi
Craig Nassi has been voted by his peers as the Ernst & Young Developer of the year for the State of Colorado. With various professional accolades to his name, Mr. Nassi has constructed a portfolio of exceptional developments nationwide.