With the perspective of a new year in mind, PropertyShark surveyed its clients, NYC real estate professionals, to find out their market predictions for 2017. Some of the results might come as surprising so read on to find out more. Here are just some of the key findings:
- According to the pros surveyed, NYC’s most in-demand neighborhoods will be East New York and Bushwick, followed by the Lower East Side and the Upper East Side
- First-time homebuyers should check the market on the Upper East Side, Murray Hill, Bay Ridge, and Bedford Stuyvesant
- For buyers who will look beyond the city in 2017, Westchester will be the top choice, surpassing New Jersey and Long Island
- NYC real estate pros were split almost evenly between a buyer’s and a seller’s market
- 74% of pros say that buying will be the better option in 2017 compared to renting
- Manhattan’s luxury market will continue its slowdown in 2017, say 84% of respondents
NYC’s hottest neighborhoods in 2017 according to real estate pros: East New York and Bushwick
As so many people are looking for an answer to what will be the next hot neighborhood making the headlines and commanding interest from buyers and investors, we really wanted to know what market players predict. NYC real estate pros largely favored Brooklyn neighborhoods in their answers and the top two neighborhoods come from this borough.
The top choices might make some pause at first, but both East New York and Bushwick seem to have the credentials for being 2017’s hottest neighborhoods for buyers.
On April 20, 2016, the East New York rezoning project passed through City Council despite concerns that it will invite gentrification to the area. The project is part of Mayor’s Bill de Blasio’s plan to preserve affordable housing and to promote the development of neighborhoods, and the anticipation that the area will experience growth in the next years landed it a spot at the top of NYC’s hottest neighborhoods for 2017. The median sale price in 2016 was at $339,275, a 19% increase year-over-year and a 44% increase in the past 5 years.
As buyers are priced out of other in-demand Brooklyn neighborhoods, Bushwick might be their next stop in 2017 even if it’s still overshadowed by its more popular neighbor, Williamsburg. The median home sale price in Bushwick in 2016 was $510,000, lower than Brooklyn’s median, and it didn’t make our list of top 50 most expensive neighborhoods in NYC, but we look forward to seeing what 2017 price stats will show.
East New York and Bushwick are followed by the Lower East Side, where the median sale price reached $800,000 in 2016, a 26% increase from the previous year. Considered to be a rather affordable option, by Manhattan standards at least, it made the top of respondents’ preferences together with the more famous Upper East Side.
Where should first-time homebuyers head to? The top choice might come as a surprise: The Upper East Side
First-time homebuyers, head to the Upper East Side! According to NYC real estate pros, this neighborhood should be at the top of your list when looking for your first home. And while at first you might dismiss this advice, keep in mind that this neighborhood is seeing one of the highest number of transactions of all NYC neighborhoods each year so home buyers have enough inventory to choose from. There are currently a little over 1,000 homes on the market on the Upper East Side, with prices starting at $300,000 for co-ops. In 2016 alone, 2,612 homes were sold here. The median sale price was close to $1,150,000 here when looking at all homes sold; however co-ops have sold for a median of $875,000 in 2016.
Second on this list comes Murray Hill , with a median sale price of $845,000 in 2016, followed by two Brooklyn neighborhoods: Bay Ridge and Bedford Stuyvesant. Bay Ridge in particular stands out with a rather affordable price point in 2016, a median of $449,176. Carol Robinson, real estate broker at Douglas Elliman, says: “First time home buyers will continue to be the hot market. Brooklyn will continue to attract more buyers.”
Check out the other neighborhoods recommended for first-time homebuyers, mostly from Manhattan and Brooklyn with Queens making one appearance. The list appears to be a mix of more pricey, well-established neighborhoods and still-under-the-radar, more affordable ones:
Heading for the suburbs? Try Westchester.
When asking whether 2017 will see many homebuyers taking their search to the suburbs instead of the city, the respondents were once again almost evenly split between yes and no as 51% predict that buyers will still prefer the convenience of living in New York instead of heading to nearby cities. As for the other half who predicted that buyers will actually look beyond the five boroughs, most mentioned Westchester County as the place to go to, with Yonkers as an example of a real estate market that could answer the needs of priced out buyers looking for a quiet location and more living space.
The other locations in the top 3 were Long Island (Nassau, in particular) and New Jersey, both considered to give a lot more value for homebuyers and being close enough to the city for those looking to commute. David Gerts, a real estate broker in NYC, confirms this trend of looking beyond the city: “Rising energy costs and low inventory will force home buyers further into rural areas. Transportation and access to NYC will be a major factor in the decision making process for first-time homebuyers as they are forced further away.”
NYC real estate pros split evenly between buyer’s market and seller’s market
The pros that answered our survey were split evenly when it came to assessing NYC’s real estate market in 2017, half supporting that it will be favorable to buyers while the other half leaned towards sellers. Increasing supply will continue to shift the market towards the buyer mostly in the luxury segment but for lower price points there will still be competition.
74% of respondents say that buying will still beat renting in 2017
The majority of respondents believe it will still be better to buy than to rent in NYC next year as 74% of respondents say that buying will still beat renting in 2017. Dennis Cotto from Keller Williams predicts 2017 will be a strong year for buyers: “The market is poised for another record breaking year for buyers – investors as well as first-timers.” Elliman’s Elvin Roytman describes Brooklyn’s condo market in the following manner: “The condo market in Brooklyn will still be the best deal in all NYC real estate due to the glut of rentals with sky-rocketing rental prices and the rapidly increasing influx of residents.”
NYC real estate pros overwhelmingly believe that Manhattan’s luxury market will continue its slowdown in 2017
One of the main topics that dominated NYC’s real estate market in 2016 was indeed Manhattan’s luxury market slowdown, and we’re all wondering how that will play out in 2017. This was the question that gathered by far the most consensus as 84% of the respondents believe the slowdown will continue this year. Furthermore, 81% say that the supply glut in NYC’s development market will still be a reality in 2017.
Trump’s impact on the real estate market is seen as largely positive
We couldn’t steer away from this topic either as the inauguration of Donald Trump is close by. When asked what kind of impact they think the Trump presidency will have on the real estate market, 50% of respondents mostly see it as a positive one. Only 22% believe the Trump presidency will have a negative impact, with the rest of respondents considering that it will not have any impact.
Sacha Mobarak from Town Residential shares his opinion on the possible influence of a Trump presidency: “I feel that Trump’s policy of tax cuts, infrastructure investment, combined with rising interest rates will eventually encourage an inflationary environment. Historically real estate has been a good hedge to inflation which may have an influence on the market. Uncertainty in real estate markets and the economy steers global real estate investments to gateway cities, London with Brexit is losing influence as the financial gateway to Europe leaving New York in a good position to capture additional gateway city investors.”
China tops the list of foreign buyers interested in NY real estate, followed by Russia
Regarding demand from foreign buyers, 42% of real estate pros believe it will not be strong in 2017. Of those who believe we’ll continue to see interest for NYC real estate from outside of the US, 42% name China as the top country these buyers will come from, followed by Russia and India.
We also ran a similar survey for commercial real estate brokers and investors. Stay tuned for the results to find out what pros predict for the CRE market in 2017 – which neighborhoods will be hotspots for investments, what will happen to Manhattan’s office market, and more!
This survey ran on the PropertyShark website for 1 month, starting on December 7, 2016. There were 203 responses from residential brokers, investors, and appraisers who are PropertyShark’s clients.