Why Now Is a Great Time To Buy
By Kelly Craig
Manhattan real estate has been known for its resilience and ability to hold its value even during economic fluctuations, force majeure, and changes in interest rates. Over the past 40 years, there have been several examples of this. Here are a few notable ones.
1980s Savings and Loan Crisis and Dot-com Bubble (Late 1980s to Early 2000s): Despite the savings and loan crisis in the late 1980s and the burst of the dot-com bubble in the early 2000s, Manhattan real estate managed to maintain its value. The city’s status as a global financial hub and its limited supply of prime real estate contributed to its resilience.
September 11 Attacks (2001): The terrorist attacks on September 11, 2001, caused a temporary shock to the real estate market in Manhattan. However, the city’s strong economic fundamentals and the resilience of New Yorkers led to a quick recovery in property values.
Global Financial Crisis (2008): The subprime mortgage crisis and subsequent global financial crisis had a significant impact on the real estate market worldwide. While Manhattan did experience a temporary decline in property values, it was less severe compared to many other markets due to its unique status as a global business and cultural center. Due to the prolonged period of low interest rates following 2008, real estate became a more attractive investment, especially in Manhattan. Additionally, the city continued to attract international investors seeking stable and prestigious assets, contributing to the elevation and maintenance of property values.
Tech and Finance Boom (2010s): The expansion of the technology sector and the continued prominence of the financial industry in Manhattan kept demand for real estate here high. The influx of high-income professionals contributed to sustained property values, even as the broader economy faced fluctuations.
COVID-19 Pandemic (2020s): Despite the challenges posed by the COVID-19 pandemic, Manhattan’s real estate market demonstrated resilience. While there was a temporary slowdown in sales and rentals due to lockdowns and remote work, the city’s appeal as a cultural and economic hub endured. As restrictions eased and vaccinations became widespread, the real estate market started rebounding.
Limited Supply and Iconic Status: Manhattan’s limited land availability, stringent zoning regulations, and in Greenwich Village the limitations created by the Landmarks Law keeps the supply down, and its iconic status as a global destination for business and culture and entertainment have all contributed to the sustained demand for real estate here. These factors have helped mitigate the impact of economic downturns and interest rate fluctuations.
Furthermore, with the current trend of rising interest rates, there is a silver lining for Manhattan buyers who are willing to move forward. With many homeowners reluctant to give up a previously locked-in low mortgage interest rate, despite needing more space, there are fewer buyers to compete with for desirable homes. Inflation has slowed down as a result, and a correction in home pricing has ensued. More flexibility and bargaining power has resulted in many opportunities for the buyer. For all cash buyers, this time is prime. Buyers who require a mortgage and have the resources and the stamina, can use the tax deductions from their mortgage interest, and hang tough until rates come down when they can refinance. History shows that they will come down.
The Manhattan real estate market has always been an excellent long term investment. Greenwich Village and the surrounding neighborhoods are extremely desirable, well-established, with limited available land for new construction. This scarcity of supply can contribute to property values holding steady and appreciating over time, regardless of interest rate fluctuations.
Now, like always, is the time.
Kelly Craig is a Licensed Associate Real Estate Broker at Compass. She can be reached at firstname.lastname@example.org.