Few cities offer luxury real estate like New York City. Essentially, the sky's the limit so long as the buyer has the funds for it. For the past few years, those dealing in multi-million dollar homes have enjoyed a fast-paced seller's market, but a recent Forbes article points out how the luxury real estate market might be cooling.
In 2021 and the first months of 2022, multi-million-dollar luxury listings in New York flew off the market in the blink of an eye. Those contracts have slowed significantly in recent months, though we're still seeing closings of those deals, impacting today's numbers.
What's Cooling Luxury Real Estate Sales in New York?
The residential real estate market was white-hot at nearly every price point in 2021, the luxury sector included. With prices at an all-time high, many prophesied that the market would soon reach a ceiling. Some even feared the bubble would pop as it did in 2008. While most agree that a 2008-style real estate crash isn't likely, they do believe that a cooling has begun.
This cooling can be attributed to multiple factors. Investors are tempering their speculation as the economy suffers and threats of an impending recession loom. Further, the Feds have raised interest rates significantly. We also can't discount the impacts of inflation.
The Market's Delayed Reaction
Those looking to buy or sell in the NY real estate market should remember that the numbers reflected in recent closings may not indicate current home value. The numbers reported lag behind actual values because they reflect deals made months ago at the market's peak. Sellers would be wise to consider the actual home value vs. what the home would have been worth last year, and smart buyers should make sure they're getting their money's worth before jumping into a contract.
Hire a Commercial Real Estate Lawyer in New York
If you have buying, selling, or default issues concerning property in New York, call the office of Melvin Monachan, Attorney at Law, at (347) 389-1682, or contact us online today.