New York City real estate is launching into 2024 with record breaking deals!
2024 Real Estate Trends
Two of the industries most notable deals have gone into contract in the first 2 weeks of the year:
- 500 West 18th PH 26 in contract, last asking $49,000,000
- 217 West 57th Street Floors 107/108 in contract, last asking $149,500,000
Recent luxury and ultra-luxury transactions have been structured as cash purchase transactions, concentrated in the new development market. Specifically, 68% of all NYC real estate purchases in Q4 2023 were all cash. This trend will continue as purchasers remain keen to avoid high interest rate financing options and leverage the certainty of cash offers to secure optimal deal terms. Expectation for 75bp cut in 2024 is generating some exuberance for housing.
Lower inventory is a meaningful trend. Presently, the market is seeing 3.5% less available inventory than during vs. pre-pandemic levels. Less inventory is actually accelerating interest in the Super Luxury real estate market, as buyers aggressively chase trophy property to add to their portfolios.
NYC Real Estate Investment Strategy
Buying in NYC now is recommended before interest rates begin to adjust downward and premier inventory is no longer available.
The Federal Reserve hiked rates 525 basis points from 2022-23, the fastest velocity of hikes since the 1970's. This has shifted the balance of real estate transactions in favor of the power of the cash buyer.
Less inventory is available in the new development space where demand is most robust. Sell-outs are now projected to be completed within 3.4yr term, whereas previously 8.5yrs could be expected.
Why Buy in NYC Now
The US remains the largest economy in the world, with 26% of global GDP. US equities dominated 2023, up 26% in comparison to its peers. Consistently, the US outperforms other global markets, both developed and emerging. The US enjoys safe haven status, the economy is resilient, the US enjoys liquid markets that are well-regulated and it drives innovation and growth.
We believe the overall stability and growth potential in the US is a highly compelling thesis to drive investment into the NYC residential real estate market. While geo-political risks could escalate in 2024, the US market should remain constructive and reasonably insulated.
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Sources: The Olshan Report, Jonathan Miller, Goldman Sachs Wealth Managment 2024 Outlook
