January 2017: Welcome to 2017!
With the New Year, we have turned a new leaf, hopefully putting the emotional rollercoaster of the fall behind us. With this new beginning, we expect a flurry of activity in the real estate world, not in small part due to the increased volatility of interest rates. Read on for everything you need to know to navigate the current climate… plus a few other fun things to keep your spirits bright!
The Story: Strike While The Iron is Hot
The Jump Off
When we bought our first apartment, interest rates were just shy of 8% — no, that’s not a typo! Needless to say, over the course of 15 years and several properties, we have continually refinanced to take advantage of the downward trend in rates. Prior to the election, rates were at historic lows. Now, with some strong economic influences, rates have ticked higher. And although the present impact is minimal, 2017 might be the year we see an upsurge.
The media frenzy would have you believe that affordability is spiraling out of control. But let’s look at the facts: on a $1,000,000 30-year fixed-rate mortgage, monthly payments went from $4,490 to $4,702, on average, compared to a year ago — a $212 increase. On a $500,000 mortgage with the same terms, payments went from $2,245 to $2,351, on average — an increase of $106. That’s just one less Starbucks coffee a day.
The Wrap Up
While no one can foretell exactly where rates will land by mid-2017, given the economic trends we are seeing in tandem with the Fed’s objective to raise rates, most economists agree that interest rates will continue to slowly increase in the mid to long term. Considering that for now we are still in a historically low-rate environment, this may mean it’s the right time for you to buy and/or sell.
The Conversation Cheat Sheet
What to say to your friend who still has PTSD from the subprime mortgage crisis…
While NYC real estate doesn’t always follow the national market trends, there is big news out there. For the first time in over a decade, government-owned mortgage companies Fannie Mae and Freddie Mac will begin backing larger mortgages. This means it will be easier for buyers in more expensive markets (like Manhattan, Brooklyn, Aspen, Miami, San Francisco and LA) to finance their purchases. Hint: Compass has offices in all these highly sought-after locations!
The high-end of the market softened over the last few months, but foreign investors still consider NYC real estate as a solid wealth preservation strategy for their portfolio. While bread-and-butter segments of the market don’t usually show an immediate correlation, a price correction in the luxury segment might eventually trickle down. Read more here.
Thinking you rather just rent? While low rents might tempt you to postpone your purchasing decision, rent concessions usually only last for a limited time. By the time your rent starts rising again, interest rates will be rising as well making it more expensive to buy. Short term gains can easily turn into long term losses, so be careful.
What to say if your oven doubles as off-season clothing storage…
Not sure if everyone will agree that 2017 is the year of the butterfly, at least as far as home design goes… but foldable appliances and even entire rooms (!) will sure to be a hit in NYC. Read here for more design trends!
Another interesting design tidbit? What reclaimed wood is to Brooklyn, high-lacquered wood is to the rest of the world. Check it out!
Thinking of painting your new home white? There are so many shades of white to choose from, but if you’re up for some color in 2017, Pantone has a reputation for being spot on with their color trend predictions.
And just to get you out of the house…
Enjoy some time in the great outdoors without ever leaving the city at the Central Park Winter Jam. Then warm up at one of NYC’s coziest bars and restaurants. For a dose of culture, check out what the city has to offer in honor of the upcoming Chinese Lunar New Year.
New York Fashion Week is here February 9–17th. And although you’ll likely have a tough time scoring tickets to any events, if you want to get in on the fashion action you can check out the Rent the Runway flagship store.
The Gabriele Moment
Here’s what I’ve been up to these past few weeks as I walk, bike and race between the bridges and the parks.
I promised my mom I wouldn’t post this picture on the internet… but my newsletter doesn’t count, right? Even after 18 years of living in the U.S., the American mattress system is still a mystery and I’ve gone through great lengths to avoid dealing with box springs and whatnot (we actually bought a Hastens bed instead). So imagine my panic when the kids needed new mattresses and I had to add that to my crazy holiday shopping list! But then Casper changed my life. The ads on the train made it look so simple. All I had to do was to select my mattress size and they would deliver a new mattress and foundation the next day for free. But in good German tradition, I could not buy a mattress without trying it out. So my mom and I went to the Soho Casper shop and took a test nap. Nestled in our own little “bedroom” shielded from curious onlookers (Casper clearly knows how to sell their product), we hung up our coats, tossed and turned and took home this picture as a souvenir. As advertised, it took less than five minutes to order online, everything arrived on time, was easy to set up and customer service was impeccable. The best thing: the kids love their new mattresses! Makes you wonder what took so long for Casper to arrive on scene. (This, by the way, is not a sponsored plug… I don’t even usually review products!)
They Said It
“Gabriele was impeccable with her professionalism, proactivity and positive outlook for the maximum potential sale. We courted many different agents to sell our apartment, and by far she was the most compelling, considerate and capable.” ~ C.H., Seller
Don’t take my word for it! Read more independent reviews of my services from members of Park Slope Parents.
In Case You Missed It
Billion Dollar Trio: Here’s a look at NYC’s Unicorns of 2016 | New York Business Journal