While real estate prices drop in Florida and California, in New York City, there is a scarcity of good properties and local demand remains strong.
Where is it? The New York City metropolitan area is located at the mouth of the Hudson River in New York state.
What’s so special about it? One of the world’s truly global cities, New York is the most populated city in the United States. The city is bucking the trend for house prices in the U.S., and is also enjoying one of its lowest levels of unemployment. Violent crime has also dropped by 75%, and is at its lowest since 1963.
Best-kept secrets Knight Frank Research found that New York was the third most-expensive city after London and Monaco when buying an apartment. However, the weak U.S. dollar is making it cheaper for those who want a bite of the Big Apple. The latest cost of living survey by Mercer Human Resource Consulting found that New York is the 15th most-expensive city in the world (it was 10th last year). Mercer’s quality of living survey, however, ranked the city 48th overall and 77th in terms of health and sanitation.
Property is a major economic activity in New York and the total value of property in the city in 2006 was $857.6-billion. There is no more land in New York so the only option is to build up. The average price of an apartment in Manhattan rose 5.4% and listings have dropped by 9.1% this year. Many properties have been selling for up to 20% more than the original asking price.
Buyers guide In New York, lawyers write the contracts. Once a price is agreed upon, the seller’s lawyer sends out the contract within 48 hours. Therefore, it is important to have a lawyer in place before you buy. Once contracts are agreed upon, a booking deposit of 10% is paid. Agents can be found through the National Association of Realtors. If you buy into a co-op building, you are buying shares in a company that owns the building and they give you a residency licence, which has different tax issues.
Where are the best places to live/buy? Agents advise focusing on midtown, downtown, or as close as possible to Central Park. Popular Manhattan areas include SoHo, Tribeca and Greenwich Village.
The average rent for a small apartment in Manhattan is $2,138 a month. The Real Deal Web site reports that increases in taxes and water rates and the new Safe Housing Act will make it tougher for landlords. The Rent Guidelines Board also recommended that rents only rise 2% to 4.5% for one-year leases and 4% to 7.5% for two-year leases. The vacancy rate in Manhattan is around 5%. If you’re planning on reselling, Manhattan will always have a very buoyant second-hand market .
What type of property is available? Listings for co-op buildings have dropped by 20% this year. A growing trend is branded residential properties, such as the iconic Plaza Hotel, where more than 500 hotel rooms were converted into apartments (which sold for up to $53-million).
Average property prices? The average price for a studio apartment is $624,282, one-bedroom units average $855,164, two-bedrooms average $1,496,537 and three-bedrooms average $2,137,911.
Taxes & costs? Buyers should budget 5% to 8% for closing costs.
Shane McGinley, Financial Post