Rising home prices could threaten affordability in Upper Manhattan

Photo: Robert Clark

NYC homebuyers and renters flock to Upper Manhattan due its relative affordability, but thanks to increased competition in the market that could change.

Heavy competition edged prices up in the borough’s most affordable neighborhoods in November, even as prices throughout the rest of the borough cool. That’s according to a report released this week by the listing site StreetEasy.

Boroughwide, the median price remained mostly flat year-over-year at $1.2 million in November. Comparatively, the median price jumped 4.2 percent from last year to $513,620 in the Upper Manhattan submarket.

Aside from Upper Manhattan, the Upper East Side was the only other Manhattan neighborhood to record price gains.

The Upper West Side submarket offered the most price cuts of all Manhattan submarkets. Some 13 percent of homes saw a price cut in November, which was up 2.2 percent from the same time last year.

Meantime, the number of homes for sale declined boroughwide but spiked 12.6 percent in the Upper Manhattan area — in what StreetEasy called “a welcome sign for buyers hunting at lower price points.”

But increased interest in Manhattan’s last bastion of affordability is likely to continue to edge prices upwards in 2018.

“Price trends indicate that more affordable regions of the city, such as Upper Manhattan, continue to see strong demand and are set for ongoing price growth in 2018,” StreetEasy Senior Economist Grant Long says in the report.

Also, many New Yorkers measure “affordability” differently.

“While there’s a lot to like about areas such as Harlem, Inwood, and Washington Heights, not all of these areas offer the same attractive commuting and lifestyle benefits that areas downtown do,” Long tells BuzzBuzzNews.

Price trends in Upper Manhattan are predicted to more closely follow those of eastern Brooklyn and Queens that balance affordability with convenience and a sense of community.

“While we feel that prices in Upper Manhattan do have more room to grow, we don’t expect to see price levels in Harlem reach those in Chelsea anytime in the next several years,” Long tells BuzzBuzzNews.

Manhattan homebuyers should expect to see a new influx of homes for sale and deeper price cuts as competition heats up in 2018, following a lull in sales over the December holidays.

The Manhattan rental market in 2017 was characterized by new construction high-end developments skewing prices upwards, ending a seven-year surge in rents, says Long in a recent market prediction for 2018.

Following the surge, the market cooled and rents began to stabilize. Manhattan’s rents continued to cool in November. The median asking rent rose boroughwide just 0.2 percent annually to $3,139 in November.

However, in Upper Manhattan the median asking rent was up 1.2 percent from last year in November, with heavy competition fueling rental price growth.

Boroughwide, rents will “inevitably” fall next year to meet market demand, and landlords will continue to offer more incentives to attract new tenants.

“Anyone looking for an apartment in 2018 should be asking prospective landlords for a month or two free,” advises Long.

Manhattan renters are also likely to not be enticed by the “quirky amenity” craze sweeping high-end rental developments — offering unconventional “amenities” like wine tastings and puppet shows for kids.

“In 2018, an empty table in a quiet lobby with good WiFi could become the most enticing amenity of all, as New Yorkers increasingly look to unconventional spaces,” predicts Long.

Click here to read the entire report.

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