{October 2022} The Case of a Smart Buyer
Throughout my real estate career, I have committed myself to being a fact bearer. I abhor becoming the real estate agent who claims perennially that it is a good time to buy. But today I would like to make a pitch to all the buyers out there, who are on hold and watching, that now is a good time to buy. Here are my reasons:
The rents are so high which means there is fundamental demand for housing in NYC. Rent increases have outpaced price increases in the last two years. This has pushed up the rent yields for NYC properties. Investors are now looking at 3%+ rent yields, which are nearly unheard of historically.
Since reaching its peak prices in 2015, the NYC market’s recovery has been stopped twice literally in its tracks: once in Jan 2020 and then again this past May. In both cases, the inner workings of the market (supply and demand) were ripe for prices to go higher, but both attempts for prices to push higher were stopped by brutal external forces. We saw how forcefully the market bounced back post pandemic last year.
As the Fed fights inflation, the labor market is expected to cool down. With the workers having less leverage, does it mean more people would feel compelled to come back to the office more than 3 times a week? If so, the NYC real estate market has another leg to stand on for recovery.
Obviously, prices can go down more from here. But if you have to pay rent anyway, why wouldn’t you take this opportunity to dip your toes in the market and be the party in charge, instead of being one of the 10 offers when inflation is under control? It is just so nice to be a buyer now - no one competes with you and you have all the power.
Good Read:
Let’s all take a drive and soak in the wonders of the 55 Most Beautiful Small Towns in America!
The NYC real estate market is at an interesting crossroad. On the one hand, we feel a lot of pent-up demand from buyers who have been watching and waiting for rates to go down.