With the current challenges faced in the NYC housing market, it's crucial to stay informed about the upcoming trends and predictions for 2024. Although the market has been highly competitive and unpredictable, there are indications of a calmer rental market on the horizon. In this article, we will explore the key insights and forecasts for the NYC housing market in 2024.
Rising Inventory Will Slow Rent Growth — But Don’t Expect Rents to Fall
One of the significant factors that led to soaring rental prices in 2023 was the shortage of available inventory. However, with increasing inventory projected for the upcoming year, the rate of rent growth is expected to slow down. Although a sharp decline in rents is unlikely due to limited inventory compared to pre-pandemic levels, renters can still find relief in Manhattan. As landlords compete for tenants, Manhattan's asking rents are anticipated to decrease from their high levels in 2023.
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Manhattan Rents Will Decline, Winning Back Renters
In 2023, due to affordability concerns, many NYC renters started exploring areas outside of Manhattan. However, in 2024, Manhattan is predicted to regain its appeal as asking rents decline. The peak median asking rent in Manhattan was recorded in April 2023 at $4,395 – the highest on record. As more landlords strive to fill vacant units, there will be an increase in listings with concessions, resulting in a decline in asking rents. This trend will make Manhattan an attractive option once again for renters seeking affordable housing.
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New, Amenity-Rich Condos Will Be the Market’s Hottest Commodity
The demand for move-in ready homes in brand new buildings has remained strong among New Yorkers. Amenity-rich sponsor condos with sought-after features like in-unit laundry, a dishwasher, an elevator, and a doorman, in addition to a gym or pool, have attracted buyers. Despite the premium price, these condos are expected to grow in popularity in 2024. With limited resale listing inventory and high renovation costs, home shoppers will increasingly consider newly-constructed condos. However, the supply of new developments is expected to slow down, leading to heightened competition among buyers.
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Asking Prices Will Moderate as Buyers and Sellers Come to Terms With Higher Mortgage Rates
Selling a home in NYC has always presented unique challenges, especially considering the higher price points compared to the national market. As mortgage rates have risen, sellers have had to confront a market with fewer buyers. In 2024, as sellers adjust to the impact of high mortgage rates, asking prices are expected to fall modestly below $1M – the threshold triggering the mansion tax in NYC. Although motivated buyers will keep the market balanced, lower mortgage rates will encourage more home shoppers to enter the market. However, this shift will not tilt the power towards buyers significantly.
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In conclusion, the 2024 NYC housing market is expected to bring some relief for renters, particularly in Manhattan, with declining rents and increased inventory. Amenity-rich condos in newly-constructed buildings will continue to be highly sought after. As sellers and buyers come to terms with higher mortgage rates, asking prices will moderate to accommodate a shifting market. By staying informed and adapting to these trends, both renters and buyers can navigate the NYC housing market more effectively in the coming year.
