LOOKING BACK: THE 2017 REAL ESTATE YEAR IN REVIEW
(Photo credit to my daughter, featuring golden hour and foggy morning Central Park Reservoir)
Despite a number of major influences, including the inauguration of a new president and the passing of the first major tax code overhaul in 30 years, New York real estate weathered the storms of 2017 to end the year on solid footing.
In Manhattan, the median price of condos was up 2.7 percent over 2016 to $1.7 million; co-ops ticked up 3.2 percent to $800,000; and new development sales were even at $2.6 million. Median sales prices were especially strong in Queens and Brooklyn where they jumped 7.5 percent and 7.8 percent respectively.
But strong median pricing doesn't mean sales activity was even throughout the year. As CEO Frederick Peters pointed out in Warburg's 4th Quarter 2017 Market Report, 2017 started out strong for homes priced under $7 million, and especially under $2 million. Election uncertainty dissipated, and according to UrbanDigs, Q1 2017 contract activity was up 16.6 percent year over year.
By spring and summer, however, enthusiasm had dampened slightly, but activity kept pace with 2016 levels. This is when sellers began to adjust expectations and realize that, as Fred put it, "Optimistic pricing does not sell property in 2017." Pricing was everything, especially in the mid-range and luxury price points, and sellers had to position properties accordingly or risk them languishing on the market. This was especially true in the luxury condo market, where there was plenty of inventory to choose from, and buyers were quick to dismiss those with unreasonable price tags.
Thankfully, after Labor Day, pricing fell in line, activity picked up, and things seemed on track for a strong ending to the year. October signed contracts were up 3 percent over 2016, November contracts were up 5 percent … and then conjecture over the Trump-led tax plan, with its new limits on mortgage and local tax deductions, sidelined cautious buyers in December. Contracts dropped 13 percent compared to December 2016.
The last quarter of the year is always the slowest for real estate, due in large part to the many holidays and chilly temperatures. Because of 2017's big December flop, however, you'll see some lower-than usual-figures across the flood of Q4 reports that come out this time of year. According to data from real estate appraisal firm Miller Samuel, the number of closed sales was down 25.4 percent over Q3 and 12.3 percent compared to 2016. Average sales prices also dipped to $1.90 million, down 5.3 percent from Q3 and 10.6 percent from last year.
The good news in Q4? Days on market held steady at 97 days, which is lower than the Q3's 101 days and just above last year's 94 days. Active listing inventory in Q4, at 5,451 properties, was up 1.1 percent compared to 2016.
The impact of the election is called out frequently in the Q4 reports, but in The New York Times, Jonathan J. Miller, president of Miller Samuel, also points out the significant impact of the increasingly dry "legacy pipeline" — contracts on pricey new development condos initiated years ago, but closing now. Those lingering agreements have driven up average sales prices since the new development boom of 2014, but their effect is dwindling, which shows in the numbers.
I want to reiterate that despite ending the year on a sour note, real estate activity in 2017 was quite stable, and there's plenty of reason to look forward to 2018. Even in the midst of a very strong 2008 market, last year’s prices were up 29% from a decade ago.The economy is strong, unemployment is at record low levels, and Wall Street is roaring. Even the reserved New York Times seemed bullish on the year ahead, noting that despite the continuing slump in ultra-luxury sector, the overall residential market is healthy with strong demand, especially in the entry- and mid-level price ranges. Overall, the Times forecasts a "relatively stable market" in 2018.
While the term "buyers' market" might be misleading, current market conditions do favor buyers at many price points far more than they have in recent years. Still, preparation is key when considering the purchase of a new home or investment property. If this is one of your goals for 2018, I'd love to have a longer conversation about how to make that goal a reality. Here are a few tips to get you started on the right track.
Take time to get your finances in the best possible shape. Pay down debt, bulk up that down payment and consider how the new tax laws will affect your purchase.
Set your budget and get pre-qualified for your mortgage, if necessary.
Know the differences, advantages and disadvantages of condo versus co-op, and begin assembling necessary information for a successful board approval process.
Make a list of preferred neighborhoods and buildings, and start contemplating your must-have versus can-live-without amenities. I have a very comprehensive knowledge of all types of NYC inventory, from the very diverse world of new development and resale condos both uptown and downtown, to the sometimes tricky to navigate world of co-op buildings and boards.
Launch the process of preparing your own home for sale, if you'll be buying and selling concurrently.
Grateful for my clients
More important than any how-to guides or personal tutorials, are the relationships I build with my clients. I’d be honored to guide your real estate journey and help you figure out what says “home” to you. I'm proud to have ended 2017 as Warburg's top producer, and I've been a top-five producer at the firm for the last several years. Please see below what some of my clients have said about my work, and please don't hesitate to contact me if I can help bring this same service-focused approach to your next real estate endeavor. My hope also is that we have a lot of fun along the way!
“Lisa’s sales numbers and numerous awards speak for her success as a realtor. What I would like to address is the person behind all those awards. Lisa is a wonderful person and I cannot sing her praises enough. Lisa worked with my husband and I for over a year to find our Carnegie Hill co-op. With the then tight real estate market and lack of inventory there were many instances we became discouraged with our search. During this time, Lisa was a constant cheerleader, always keeping us informed of market conditions and new listings. Even though my husband and I each owned our own condos before we were married, the uncharted world of co-ops and board packages was easily navigated by Lisa’s constant assistance. Lisa is knowledgeable, always accessible, and was very understanding that our home search only encompassed a few specific blocks. I have no reservations in recommending Lisa to family and friends alike. If we ever move again, Lisa will be the first phone call we place.”
“Lisa Larson has the perfect combination of professional expertise and personal warmth that transforms what is typically one of life’s most stressful experiences (selling or buying a home) into an extraordinarily pleasant and profitable one. My experience with Lisa was so completely different from the impersonal and ineffective experience I had with every other realtor prior to meeting Lisa. As important as the ease with which I was able to work with Lisa is the fact that Lisa showed herself to have a level of professional integrity and personal commitment to my having a positive experience that I have never found in anyone else. I had—and continue to have—complete confidence in and total comfort with Lisa, which is not something one is often fortunate enough to find. Thanks to Lisa’s expertise, thoughtfulness and effectiveness, I actually look forward to my next move!”
“I had the honor of meeting Lisa in the midst of a long search for apartments in New York. From the moment we met, she immediately knew what I wanted and needed in a home (sometimes before I even knew it myself). She researched several neighborhoods which she believed would best fit my lifestyle and tastes. She patiently toured the city with me, neighborhood by neighborhood and apartment by apartment. When we zoned in on my dream home, she skillfully and artfully negotiated the best deal for me flawlessly. Somehow, she was able to make the entire process including the board package feel so easy, mostly because she was on top of every detail at every second of the day and by doing so shielded me from the many complicated twists and turns along the way. Most important, Lisa made me feel so comfortable and relaxed. Yes, she is intelligent and has wonderful instincts about the market, but best of all, I found myself just enjoying her company. She has a terrific sense of humor and a generous soul that is unmatched in this industry. I could not imagine going through an apartment search in this city without Lisa by my side.”
“We had been looking for an apartment for over a year before we were referred to Lisa. Within a few weeks of working with Lisa, she found us the perfect apartment. She not only zeroed in on exactly what we were looking for, but she got us in before the open house and navigated our bidding flawlessly. We also worked with her to sell our apartment, which she handled expertly. She makes the entire process a breeze and is such a pleasure to be around. Her natural intuition about people, coupled with her passion for NYC real estate, is a rare find.”
“Lisa Larson helped me to buy a NYC apartment from halfway around the world. And during the whole process, from the initial searches to closing and beyond, Lisa proved herself an exceptional real estate agent with all the necessary professional skills as well as immense energy and warmth. Lisa demonstrated excellent communications skills right from her first email. She listened carefully to my requirements and wishes, never once trying to second-guess me or talk me into something which wasn’t right, and offered advice where needed and guided me through the NYC processes. My questions were answered quickly and comprehensively. Lisa was unfailingly patient, friendly and good-humoured. My new building was under construction and I couldn’t visit the US, yet Lisa arranged for site visits, sent photos and videos, and gathered all the information I needed to make a confident purchase. During purchase and closing Lisa represented my interests with vigor and attention to detail. Lisa attended closing inspections on my behalf. Even beyond closing Lisa has continued to advise and assist with everything from paperwork to furniture deliveries, introductions to the building maintenance company and staff, to information about New York. I’m sitting in my beautiful apartment, looking at the NYC skyline, and it’s all thanks to Lisa!”
“Lisa’s knowledge of the Manhattan real estate market and its neighborhoods was invaluable. Not only did she make the process more efficient by tailoring the search to our very specific needs, but she also provided incredible insight and advice. Lisa is incredibly proactive throughout the buying process. She effectively prepared us for every step along the way and provided valuable guidance. We were very grateful to have such a strong advocate and advisor. Lisa was referred to us by a friend, and we will continue to refer her to ours.”
“I hired Lisa to help me buy an apartment in New York City, as I was relocating from Washington DC, where I had just sold my townhouse. I would like to comment on how well she helped me navigate the intricacies of the NYC co-op market from an “outsider’s” perspective. I was a novice regarding the “ins” and “outs” of various co-op regulations regarding updating the apartment I was contemplating purchasing. Lisa, on her own initiative, met with the Super at the apartment I had tentatively decided on. She was able discuss in detail any regulations regarding renovations in a prewar building, knowing in advance that these were considered “quality of life” issues. Her personal attention to every detail was beyond extraordinary.”