A warm welcome to our current newsletter. In this edition the focus is on the New York area market, which has had a very positive 12 months. We are also launching a new NY project, called The Aston.
Looking at Manhattan first, condo pricing is in general 9% higher than 12 months ago. This equates to a median sales price of around $1.3m or around $1,500 per sq ft. These are healthy gains, but perhaps the most newsworthy statistic is the number of sales being made. In Q2 of this year, almost 4,000 contracts were signed, which is the 3rd highest in history. Making this all the more notable is there is still a lack of inventory, particular in the sub $5m price point, where there is 9% less than 12 months ago and there was precious little inventory then.
However, there are many different segments within the market, both in terms of property type and neighbourhood, where not all of the above holds true. When many of our clients purchased their NY area property, the property they purchased was classified as ‘new development’. Some of these properties were true new build, others renovations of existing buildings. Over the last year there has been a substantial reduction in the latter, so now ‘new development’ is almost all brand new, out of the ground, buildings. The average price of new development now stands at $2,452 per sq ft, which is over 30% higher than a year ago. One reason for this particularly high price point is that developers (or sponsors as they are known in NY) have favoured building larger more luxurious product. It is quite normal to see new 1 bed condos greater than 1,000 sq ft in size. Plus the cost of developing from the ground up is naturally higher than renovating an existing building.
It is this and the luxury section of the market that has shown the most signs of change in the last few months; with 26% more inventory now available, developers are looking more closely at the sub $5m market. Inventory in this category is still 9% below last year’s level, but there are 44 new developments scheduled to be launched between now and the end of the year, giving buyers a choice of product across a wide range of prices. Some of these developments are being launched in New York City’s other boroughs, including Queens, which in our opinion has neighbourhoods worthy of consideration, as they offer a combination of good value and easy accessibility to Manhattan.
Across the Hudson River, in Downtown Jersey City, the median price has risen by 12% over the last year and the average sales price is now $600k. Property is selling 16% quicker here than a year ago too. On the Jersey Gold Coast (the area of NJ located directly across the Hudson from Manhattan), almost all new residential construction is for apartment buildings and not condos. Out of 34 projects in the pipeline, only 4 of these are scheduled to be sold as condos.
In Brooklyn, the average condo sales price is over $900k and some parts of this neighbourhood has seen 60% price growth in 4 years with a median sales price higher than that of Manhattan.
Finally, a question we get asked from time to time is, ‘With prices rising in NY, is now a good time to sell our property’. It is certainly true that in almost all cases prices are higher than they were 2-3 years ago, however, with there being a number of promising market specific factors and US economic factors, we remain optimistic that there is plenty of growth potential ahead.
Should any client be interested in selling in NY, purchasing in NY, or would like advice, JMA can manage all aspects of the transaction.
New Opportunity in Forest Hills – The Aston
We are pleased to advise that a development we have been following for many months has just been released.
- Brand new construction, 17 storey condo tower, due for completion in Q1 2015
- Just 97 condos in total
- 1 bed condos starting under $600k and 2 bed condos from just over $800k
- 1/2 minute walk to Forest Hills 71st Ave Subway station, with an 18 minute journey to Midtown Manhattan
- Forest Hills is the 7th most affluent neighbourhood in New York City, with a mean household income of $289k
The Aston offers buyers a luxury product, in a desirable neighbourhood with an easy commute to Manhattan. Prices start from $800 per sq ft, with the added benefit of lower than average running costs due to a planned 421A tax abatement. Each home has 9 ft ceilings with floor to ceiling windows, a full range of onsite amenities including a roof garden with views of the Manhattan skyline.
Forest Hills is one of Queens’s premier neighbourhoods; it has its own Michelin star restaurant, is a former home to the US tennis open and is known for its independent shops and a number of parks. With its excellent transport links and Forest Hills being a established neighbourhood in its own right, we feel The Aston should perform well in the mid to long term.
For further information including a brochure and estimated cash flow, please contact firstname.lastname@example.org.