Projections for real estate in the new year
The New York City real estate market will continue to improve in the new year, experts estimate, as interest rates remain low and new properties hit the market.
Rental prices inflated in 2012, as an underwhelming number of new buildings went up, forcing many residents to stay put and creating less available space for new renters.
This trend is expected to continue in 2013, experts said.
Gary Malin, president at CitiHabitats, said January is typically a busy time for the rental market, which slows down in February as people wait to move in the warmer weather.
But "next year there's not a lot of new product coming on the rental side, and there's still going to be great demand," he said, so "prices are going to remain strong throughout the year."
Stephen Kliegerman, president of Halstead Property Development Marketing, said in the rental market's prime in recent history, 10 to 15,000 units came on line in the city per year.
While there will be some new rental developments in Manhattan and Brooklyn, such as Gotham West at 45th Street and 10th Avenue which will offer more than 1,200 units in 2013, and 202 8th Street in Park Slope, Kliegerman expects to see only about 8,000 new units in the new year.
"As the economy continues to heal and as New York City's job situation continues to get better, you're going to see an even further tightening of the rental product," he said.
But the tight rental market, coupled with the federal government's pledge to keep interest rates low until unemployment hits 6%, fuels the buying side, experts said.
Low interest rates will encourage banks to be less stringent with their financing requirements, Malin said.
"There are lots of people right now that would love to purchase a home but they're having difficulty securing a loan," he explained. "As the economy starts to get in a better way and these banks start to feel a little more comfortable, it opens up the buyer pool."
The buying market will see mostly higher-end development, such as 364 Union St. in Brooklyn, with more boutique-type buildings hosting roughly 100 units or less, experts said.
Kliegerman said the $3,000 per square foot marketplace will see the most new inventory in 2013.
However, market reports won't reflect new developments until the sales close in 2014, he said.