$1.2 Million Apartments: Market in NYC

For a buyer with a budget, maybe you’ve been hearing that 2017 was a buyer’s market in NYC, has that continued to present day? Let me start by saying how I see a buyer’s market. It begins like a virus, deals start looking mysterious, no one really knows what’s going on. Some sell, some don’t, it’s hard to catch on. Then 6-8 months later you realize comparables are selling for less. Offers that had seemed low you’d be lucky to get. All of a sudden you are in a completely different market. The “virus” is deeply embedded. Everything has changed in favor of buyers and they get to pick and choose.

However, this current buyer’s market is affecting certain price brackets more than others. Up to $1.3 million, there is still not much inventory on the market in New York. Soho apartments really start around $2 million. Once you’re looking for a one bedroom condo for $1.2 million, in prime neighborhoods like Soho or Chelsea, it gets very competitive. For that budget, the only areas that make sense are Financial District or Hell’s Kitchen, lots of new developments or condo conversions going on in those neighborhoods. Above $1.5 million, $1.8 million, inventory opens up and a buyer has more options.

Another consideration for purchasing with a budget is how you will finance the purchase. As with any sale, cash is the easiest way to control a deal. If a buyer is mortgaging half of a $1.2 million purchase, $600,000 , it really matters what interest rate you can get. For a foreigner, you’re looking at 5%, 6% interest, which means your monthly mortgage payments are $5000-6000 plus carry charges and taxes. You might be better off renting, especially since the New York rental market is down about 30% right now, you could get a very good deal. For $6,000 a month you can get a nice two bedroom these days, and you don’t have to worry about extra monthlies, property maintenance, etc. Then again, if you can get a low mortgage rate around 2.5%, buying in that bracket might still make sense.

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