WHO's BUYING LUXURY PROPERTIES IN NEW YORK? Despite domestic and global variables creating market volatility in equity markets, rising mortgage rates and inflationary pressures, the New York / Manhattan luxury real estate market continues to flourish with high demand from both local and domestic buyers looking to own a piece of Manhattan. For some it's a desire to expand post-pandemic into larger homes with more room for everyone, as work from home becomes split between office time and home time. For others, it is a migration to New York for the first time, because work-from-home opportunities provide the chance have a lifestyle of your choice, vs. being forced to remain domiciled in one city primarily for most of the year.
TECH IS GROWING: The Tech and Fin-tech sector also is growing in New York, and we are seeing quite a bit of tech entrepreneurs as well as developers and engineers moving here from the West Coast or other areas, to call New York home. In the $6-15M+ market I am seeing many buyers looking for 2nd, 3rd, or 4th homes. The very volatility that is stressing some markets, is driving a desire for diversification of portfolios by the ultra-wealthy, and luxury real estate offers both a longer term secured investment while offering the buyers a chance to move between multiple homes on the West Coast, Idaho, Wyoming, Austin, Miami, and New York over the course of each year.
BOOMERS: Over the last 2 decades, baby-boomers / empty-nesters made up much of the domestic 2nd Home market buyer in New York. They gravitated to 1-2 Bedrooms for their families to enjoy, and many times it was spurred on by a long-held dream of a New York residence or having grown children working in New York. The luxury sector included a heavy dose of international buyers. While some are returning, many of the sales in the luxury sector have been going to domestic buyers who are younger affluent business / tech entrepreneurs who've created and sold companies. When speaking with a new buyer recently who's looking for a $5-10M 2-3 Bedroom downtown, I asked "Why buy? Why not rent or stay in a hotel?" Their answer: "Many of my friends are now also in New York, so I want to spend the shoulder seasons there and enjoy New York with them. I don't want to stay in hotels - it's too impersonal. I like the idea of having my own place, and from an investment standpoint, I have access to super low loan rates due to strong financials. It just makes sense to buy.
LUXURY RENTALS: The overall rental market is incredibly tight with a record 0.5% vacancy rate, causing rents to spike 25-40% for some properties which had Covid era leases. The luxury and ultra luxury market is especially inventory shy. Recent searches for clients looking in the $25-60K per month category, shows prices for some active listings at $15-25K above 2021 asking prices. Expect multiple bids and off-market deals.
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