NYC Real Estate Market 2019: 5 Current Trends You Need to Know

The NYC real estate market has had considerable development in its current housing trends in 2019. The collapse of the Amazon headquarters deal, for instance, was a setback for investors who prepared for increased demand and growth in New York City real estate, and Queens in particular. Aside from this, however, there are many trends in the NYC real estate market forecast, beginning in the first quarter of 2019, that are currently impacting the market. So, without further ado, what are the real estate market trends of New York City?

Related: Top 7 Residential Real Estate Trends of the 2019 Housing Market

#1. Lack of Affordable Real Estate

Property prices are the driving force of all real estate sales, and affordability is key in real estate. While both property prices and rental income can be adjusted over time, property prices are what tend to be more rigid in a real estate transaction. Unfortunately for real estate investors, the NYC real estate market is not known for its affordable real estate.

On the contrary, New York City real estate is notorious for its expensive property prices. According to Mashvisor’s investment property calculator, the median NYC property price is $1,140,027. This is slightly more than double the state median of $569,796, which is more than the national median of $308,000.

According to NYSAR, the supply of affordable real estate in the NYC housing market dropped by 1%. Real estate sales have decreased by 2.5% and average prices increased by 7% from last year. New Yorkers need an estimated income of $100,000 to purchase a property.

These house price trends make buying an investment property competitive for New York real estate investors. However, there is a way NYC investors can find affordable real estate. All they have to do is use Mashvisor’s heatmap analysis, which will analyze all properties in the market for inexpensive property prices and let you know in which neighborhoods to find them! Sign up for Mashvisor now to get started.

#2. Rental Income

Rental income is the obvious bread and butter of any and all real estate success. Fortunately for New York City investors, high rental income is a staple of the NYC real estate market. This is partly due to the expensive property prices in the city, but there are more factors to consider (some of which we will mention later).

Investing in NYC real estate, in any neighborhood, is a profitable investment. The average rental income in the market, according to Mashvisor, is $2,881, which is more than the state average of $2,444. While many neighborhoods will yield high rental income, there are certain neighborhoods with superb traditional rental income averages. According to Mashvisor, these include:

• Kings, with a $3,855 average rental income
• Unionport, with a $2,359 average rental income
• Brownsville, with a $2,287 average rental income

#3. Property Appreciation

Rental income is definitely the go-to for investing in rental properties, but appreciation (an increase in value over time) is another benefit of investing in real estate. This is certainly the case when investing in the NYC real estate market. During the last ten years, properties in the New York housing market appreciated by over 32%, according to Neighborhood Scout. This equates to an average annual appreciation rate of 2.83%, which places the NYC real estate market in the top 20 percent in the nation for real estate appreciation.

During the last 12 months, the NYC housing market had an appreciation rate of 4.61%. This is above average relative to the US housing market and is higher than 50 percent of other cities and towns in the state. In the most recent quarter, New York’s real estate appreciation rate was 0.62%, which equates to an annual rate of 2.49%. New York’s most expected appreciation rate for 2019 is lower than the previous year’s rate. While this results in lower value per year, it does extend the opportunity for buyers, which brings us to our next trend.

Related: Forced Appreciation: 11 Genius Ideas to Improve the Curb Appeal of Your Rental Property   

#4. Buyer’s Market

There are many factors that make buying an investment property conducive to property buyers. Common examples include affordable real estate, low interest, and investing in a buyer’s market as opposed to a seller’s market. While the NYC real estate market falls flat for the first two factors, it is beginning to develop into the third category. For many years now, the NYC real estate market was considered a seller’s market, one that favors sellers over buyers. In the first quarter of 2019, however, the market cooled down and, according to Zillow, it was categorized as a buyer’s market. This trend is likely to continue into the second half of 2019 and the onset of 2020.

There are various reasons why the New York City real estate market has been leaning towards a buyer’s market since the beginning of the year. The primary reason is the decrease in real estate sales. As mentioned previously, total sales dropped by 2.5% from the previous year, and 3% from the previous quarter. This marks the sixth straight quarter with decreased sales, altering the favorability of sellers to buyers. Sellers have begun lowering prices by 10 to 15 percent as a result. A decline in international buyers has also shifted the buyer’s market-seller’s market dynamic towards buyers.

#5. Rental Demand

Finally, one of the most common, and most important of New York City’s real estate market trends is its high rental demand. The incredible demand in the NYC real estate market is best exemplified by its price-to-rent ratio of over 33, according to Mashvisor’s investment property calculator. When a market’s price-to-rent ratio is over 21, it is more affordable for a person to rent a property as opposed to purchasing one. The higher the price-to-rent ratio beyond this standard, the more profound the impact on the market’s affordability.

The demand of the NYC real estate market is also seen in the percentage of residents who rent out properties. Over two-thirds of the New York City populous reside in rental properties. With such extremely high demand, it isn’t difficult for an investor to find prospective tenants.

Related: The 5 Most In-Demand Cities for Renters

All in all, the NYC real estate market is becoming more favorable for buyers in 2019. Even with unaffordable property prices, the market’s high rental income, appreciation rates, and top-tier rental demand are molding the market into a buyer’s market. To learn where to invest in real estate in the city and where to find affordable investment properties, click here.