What Will the NYC Real Estate Market Look Like in 2023?

The year is about to end, but there is a general feeling of anxiety among the real estate market's main stakeholders. Indeed, 2022 has to be the most challenging year for the real estate sector.?

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While the country continues to recover from the effects of the pandemic, real estate prices and rents have skyrocketed following interest rate increases by the Fed.?

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Many are wondering whether 2023 is going to be different now that the demand for housing has cooled down. At this point, however, it's difficult to determine the trajectory the market is going to take.

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The good thing is that market insiders are seeing possible scenarios that are going to impact everyone in the real estate sector, including buyers and investors entering NYC.?

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While a clear forecast isn't possible (at least not yet), you can look toward certain trends that could shape the real estate market in 2023:

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Prices could stabilize

The National Association of Realtors (NAR) expects real estate prices to stabilize despite current recession fears.?

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NAR Chief Economist Lawrence Yun also expects mortgage rates to drop and?settle at 5.7%?should inflation slow down next year.?

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If things go well for the economy, the rate could be lower than the pre-pandemic average of 8%. Still, home prices will vary across different markets with Zillow looking at a?1% drop in NYC real estate values?that could lead to lower home prices by the Third Quarter of 2023.?

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Construction will heat up

Over the past two years, a surge in the demand for living spaces has caught the construction sector by surprise.?

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Supply chain constraints during the pandemic contributed to the imbalance between the supply and demand for real estate. The rising costs of goods and logistics complicated things further for many developers.?

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Despite this, construction starts are expected to rebound, especially in NYC where affordability remains a major hurdle for both newcomers and long-time residents.?

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Recently, Mayor Eric Adams has announced plans to relax policies covering developers as NYC aims to offer?500,000 more residential units. It's a bold move, but if it pushes through, the changes could give renters more room to negotiate rents.?

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Rents will take a dip

Renters are having a hard time looking for apartments that fit their needs and, more importantly, their budget. With many of them priced out by rising home prices, renters are flooding the market and causing the median rent to skyrocket.?

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In Manhattan alone, the average apartment could?set you back $5,200. As rents continue to stagger, things won't get any better for apartment hunters looking for the best deal.?

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The good news is that rents will take a plunge as rising rates take a toll on rental demand and new residential projects enter the market.

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There’s still a lot more to consider as 2023 rolls in. Whether you are a property owner, buyer, or investor in the Big Apple, your best bet is to identify possible scenarios that could play out in the months to come.

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To do that, you will have to rely on an experienced NYC real estate professional who can help you find the deals you have been looking for.?

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Let’s connect and let me know your needs in today’s market. I’d be happy to share some insights and advice on how you can navigate the NYC real estate sector.?

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Call me at?917-627-5677?or send an email to?[email protected]?so we can start a conversation!

Talk soon,

Eli