City Real Estate Market May Slow Down In 2013
Real estate experts are offering predictions on what to expect when it comes to buying, selling and renting in 2013. NY1's Real Estate reporter Jill Urban filed the following report.
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In 2012, the New York City real estate market was back on its feet. There was a lot of sales activity with high demand, higher prices, low inventory and very low interest rates.
As for this year, Sofia Song, the vice president of Streeteasy, predicts things will remain relatively stable, but believes the city will see a downturn in activity.
"I think we are going to see a slow down in activity," Song says. "When Congress passed the deal to avert the fiscal cliff, it means higher income taxes and higher capital gains taxes. Also, there is a 2-percent increase in payroll taxes so this means buyers may be able to afford less, and for sellers, it will cost them more to sell."
She also says inventory will remain low, especially because many sellers cannot afford to trade up or qualify for financing, so they are opting to stay put.
Stephen Kliegerman of Halstead Development Marketing says some new high-end inventory will come to the market this year, but he expects sales for future developments to be the hot sell.
"For the first time in over four years, we are talking to developers about selling off floor plans again and we are talking about product that won't hit the market for occupancy for 2014-2015 coming to market this spring," Kliegerman says.
In terms of planning new development, he also says we can expect to see big design changes as a result of Hurricane Sandy.
"Many buildings are planning to move their mechanical systems from the basement to the second floor or the roof, their elevator equipment rooms are going on the roof," says Kliegerman. "A lot of buildings in the [Evacuation] A Zone are planning water barriers so they don't flood their lobbies."
Those changes will increase construction costs, which will drive up prices.
Despite the high prices, however, many expect the international buyers to continue to have a major stake in the market, because while things may seem expensive here, compared to some foreign cities, New York City is still a bargain.