Posted by Wei Min Tan on Jun 10, 2022
The key takeaways from the June 2022 Manhattan Real Estate Market Update are:
- Inflation at 8.3%, investors turn to real estate as a hedge
- Supply increases but remains a seller’s market
- Rising rents
Weimin’s article: How to Invest in Manhattan Property, Profit and Repeat
Inflation rate at 8.3%
Since April 2022, the the inflation rate was 8.3%. That’s why global investors are looking for ways to hedge against inflation, and real estate is one of the most popular ways to do that. Because when the inflation rate is high, rents also increase since housing expenses are a key component of the inflation index.
The current inflation rate of 8.3% is a 40-year high. With the stock market not doing well, we are seeing many global investor clients moving into real estate. Investors appreciate Manhattan real estate because Manhattan is one of the most stable real estate markets in the world.
Supply increases but remains a seller’s market
Supply is increasing but we are still in a seller’s market. We have had a limited supply for the longest time, since early 2021. Right now the market is giving buyers relief as more and more new listings are coming to market. The supply is slowly increasing, and from the buyer’s perspective, the buyer would have more options to consider.
The highest bid was at the end of 2020, when it was close to 10,000 units on the market for sale. At the beginning of 2022 it was around 5,000 units, but it has been steadily increasing. It’s still a seller’s market, just a bit better for buyers than a few months ago.
Weimin’s article: House prices in Manhattan
From the perspective of investors, rental yields are increasing. From the tenant’s point of view, it is not as good because the monthly rent expenses become much higher. It can be 20-30% more than what tenants were paying a year ago.
For our landlord client apartments, we have increased rents by approximately 20-30%, depending on where previous rents were. The average rental price increased by 32% over last year and the price per square foot increased by 25%. The number of new leases decreased by 50.5% compared to last year and the rental inventory decreased by 77%. The vacancy rate was 1.55%, the lowest in the United States.
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