By Orlando Lee Rodriguez
As it was nationally, 2012 turned out to be a year of strong sales growth in New York City, especially in Manhattan and parts of Brooklyn.
Low supply levels, higher rents and continued demand for New York real estate were key drivers, according to brokers who said that, even in the normally slow holiday season, demand was still stronger than usual.
“There is good solid activity,” said Gary Malin, president of Citi Habitats. “People are out there looking for deals. It is still busy for this time of year.”
According to the latest Douglas Elliman report, rents in Manhattan and Brooklyn rose more than 5% in 2012 while vacancy rates for Manhattan fell 0.73 percent to 1.59% in the same period. That, said Malin, is driving buyers into the market.
“People realize interest rates are really attractive. There are a lot of great buying opportunities because rents have gotten so ridiculously high,” he said.
While housing starts in the northeast have declined 26 percent over the last year, New York continued to grow in 2012, even in the aftermath of Hurricane Sandy.
“Our region’s economy was on a moderate upward trajectory before Sandy struck,” said William C. Dudley, president and chief executive officer of The New York Federal Reserve said late last month. “While the storm had many severe effects, I do not expect it to derail the region’s ongoing economic expansion.”
One reason for continued market strength, is international interest in New York City real estate as a solid capital investment in an era of economic uncertainty.
“In New York City you are getting a lot of overseas buyers looking for a safe haven,” said Jonathan Daniel, CEO of Silo Financial Corp, a private equity real estate financing company. “I think that is really off-setting any sort of softening you might have.”
“People want Manhattan real estate — end of story. They know the brand, they know there is limited supply and that’s the piece of real estate they want to own in the United States,” he said
With all that New York has going for it on the demand side, national trend numbers indicate that 2013 will be a year of continued recovery and strong sales. Existing home sales rose 5.9 percent nationally in November, according to the National Association of Realtors.
“With lower rental vacancy rates and rising rents, combined with historically favorable affordability conditions, more people are buying homes,” said Lawrence Yun, chief economist for NAR. “Areas impacted by Hurricane Sandy show storm-related disruptions, but overall activity in the Northeast is up, offset by gains in unaffected areas.”
Going forward, Gary Malin of Citi Habitats said that he expects to see continued growth in 2013, as lots of buildings continue changing hands.
“There are tremendous amounts of property coming on the market, which is great,” he said. “If you look at what’s coming, a lot of them are smaller buildings, 100 units and below. I think you are going to see pretty brisk activity there.”