Posted by Wei Min Tan on July 21, 2022
July 2022 highlights manhattan The real estate market update is:
- Record median sale price and highest rents on record
- Get away from the seller’s market
- Opportunity in new completed developments
Record median sale price and highest rents on record
In the second quarter of 2022, median selling price hit a record $1.882 million, up 5.8% from the first quarter and 14.1% from a year earlier. The price per square foot is still not as high as it was in 2017, but the median price is the highest ever. The number of sales is up 9.4% from a year ago to 1,768. Listing inventory is up 18% from the previous quarter, but supply is still low.
The Inflation high for 40 years and rising mortgage rates have made it much more expensive for buyers, so the rental market is the hottest it’s ever been. According Miller Samuel June 2022 Rental Reportthe rental price per square foot increased by 26.5% to $82.18, while the average rental price increased by 29% to $5,058 over the previous year. Vacancy rate was 1.90%, compared to 6.69% a year ago.
In the sales market, the volume of sales is decreasing due to high mortgage rates. The slowdown is most pronounced in the sub-$2 million segment.
Weimin’s article: Historic Condo Price Trend in Manhattan
Get away from the seller’s market
The offer increased a little in June and at the moment it is going down again because it is summer. Summer is a slow season in Manhattan due to summer vacation. Many sellers would delay a sale until the fall when the market picks up.
We are still in a seller’s market but heading towards neutral. Why? It’s because mortgage rates almost doubled compared to a year ago. It is much more expensive for buyers who need funding, and 50% of Manhattan buyers need financing. This is another reason why the rental market is the hottest it’s ever been and rents are at record highs.
The 30-year mortgage rate in 2021 was around 3%. Currently, it is at 5.51%. It’s doubled, making it much more expensive for buyers who need financing. The sub-$2 million segment, which represents studios and one bedroom, is much slower than the $2 million+ segment (two bedrooms and above).
Opportunity in new completed developments
New development sales were up 26.7% from last quarter and 101.8% from a year earlier as buyers took advantage of the last remaining developer concessions. Buyers able to conclude all in cash should buy new developments that can close immediately and take advantage of record rents.
This is a great opportunity as buyers can get concessions from developers while getting a brand new property. If the buyer intends to rent the apartment, the buyer can take advantage of record rents where there is almost no rental inventory and good units snap up within a day.
Sales of new developments are strong and there is an opportunity to capitalize on new developments which are completed. They need to be completed so they can close in 30 or 45 days, no new developments where you have to wait a year or two to be completed because we don’t know where the rental market will be at that time.
Weimin’s article: Launch of new condo projects in Manhattan
What we do
We focus on of global investors buy condos in Manhattan for portfolio diversification and long-term return on investment.
1) Identify the right purchase according to the objectives
2) Manage the buying process
3) Rent the property
4) Manage tenants
5) Market the property during the eventual sale
Wei Min’s media interviews by CNBC, CNN, New York Times about investing in Manhattan real estate