This past year was a historic one for the entire real estate industry, specifically the NYC market. Here, countless price records were bested with commercial deals routinely topping $1 billion, and a $90 million unit at One57 primed to take its position as the most expensive Manhattan condo sale ever. It was a big year to say the very least.
So what about 2014? Plenty already. With Mayor-elect de Blasio on deck many in the luxury real estate market as well as those looking for invest in it are waiting anxiously to see what the new fiscal and zoning implications will be, if any right off the bat.
Conversely, following the President’s appointment of Janet Yellen as chairman of the Fed, many of those same stakeholders breathed a tentative sigh of relief, amid hopes this known supporter of the bond-buying program that has kept interest rates low will continue maintaining the foundational requirements needed to ensure funds are just as easy—and still fairly inexpensive—to come by next year. However, we’re still going to be far from the historically low rates we’ve experienced more recently, potentially landing somewhere in the 5% range by year’s end. That said, expect lower down payment options as well as low-credit score mortgages being made available as lenders strive to attract and lock in new segments of the prospective buyer pool.
With a spike in prices and increase in rates anticipated, many buyers will look to downsize their home searches come next year. While the trends when rates dropped below 3.5% was to go big, tomorrow’s home buyer will be more disciplined in her hunt, choosing a well-sized home for their family versus the biggest bang for their buck, from a square footage perspective. Why? With shifting priorities and a desire to sock more aside from both a short- and long-term vantage point, homeowners aren’t risking sinking it all into a house but, instead, are diversifying and making this critical buy just a piece of the puzzle.
Through all these changes, home values are actually expected to increase 3% while homeownership will dip nationally, to what’s expected to be its lowest point in almost 20 years. What does that mean for you, the prospective buyer? While prices may increase the availability of fairly low-cost money will make homeownership still well within reach for many looking to make the leap from the multi-million Manhattan condo market to the suburbs. We’ll see you there!