A Field Day for NYC Real Estate Investors

According to Redfin, the median listed rent for an apartment in the United States has reached $2,000 for the first time.?

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This comes following the Fed's announcement to increase interest rates as a way to ease the effects of rising prices.?

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But what does this mean to property investors who are trying to make their mark in the Big Apple??

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Before we get into that, let's look at where the NYC rental market stands at the moment.

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The Market in Perspective

Factors such as geopolitical instability and global supply chain issues have contributed to rising prices and forced the Fed to raise its?benchmark interest rate?by 0.75%. This, in turn, is expected to raise mortgage rates and ease up buyer demand.

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For more than two years, the real estate market saw massive demand for housing as buyers took advantage of near zero-percent rates to find their dream homes.?

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But now as interest rates have gone back up again (and at a record pace!), rising mortgages are causing record increases in the rental sector as well.?

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The median rent in Manhattan, for instance,?has reached $5,000?with most tenants agreeing to pay above asking rates just so they could zero in on their ideal apartment.?

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At this point, we need to understand how we ended up here.?

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Battling for Apartments

As mortgage rates surged, buying activity across the country started to wane. While competition remains hot, home sales are showing signs of slowing down. At the very least, this should give housing markets a much-needed breathing space to replenish their inventory of available listings.

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However, demand remains strong as remaining homebuyers are determined to find the best deals before mortgage rates increase further.?

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But the real action is happening now in the rental sector where bidding wars are becoming more common, especially in Manhattan.?

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In?a report by Elliman?published this June, rising mortgage rates have pushed buyers to rethink their goals and consider renting instead.?

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In addition to this, New Yorkers that left the city at the start of the pandemic are returning to a highly competitive market where there is simply not enough supply for both existing residents and newcomers.?

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These include Millennials and Zoomers that have just entered the job market and want to make NYC their ideal home away from home.?

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That's not all. More people are relocating to the Big Apple than before the pandemic happened.?

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With the vacancy rate in Manhattan down 46% from last year, we can expect the median rent to increase further in the coming months.?

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What's In It for Investors?

If you ask any NYC real estate professional right now, the market is one for the books with the median rent reaching record highs.?

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Uncertainty remains as global supply chain disruptions persist. Nonetheless, real estate investors can turn this situation around and find valuable opportunities.?

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According to an article on Nasdaq.com, an apartment investment is an effective?hedge against inflation?because leases are renewed each month. This allows investors to maintain cash flow by raising the rent.?

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With mortgage rates still expected to rise, apartment investors can absorb the overflow of homebuyers who have just decided that renting is more practical.?

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Investors will only need to act fast and buy properties before mortgages rise further.

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So, if you are planning to invest in an NYC apartment, now would be the perfect opportunity because of the high demand for housing, record-low supply, and increasing rent.?

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Let’s connect so I can help you find property deals that match your long-term investment goals. Call me at?917-627-5677?or send an email to?[email protected]?

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I’ll walk you through every step of the way so you can finally build a successful NYC investment portfolio.??

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Talk soon,

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Eli