New York Investment Uptick

The big post-Covid repricing is ending at the top of America’s residential property market, leaving New York looking good value, reports Abode2.

Across the US, high mortgage rates (hovering around the 7% mark) are putting pressure on transaction volumes, creating what Knight Frank’s research chief Liam Bailey calls “market inertia”.

Yet price growth is being propped-up by a lack of supply; at the national level, sales inventory is running a third below the five-year average. In New York, sales supply is nearer 50% down.

“This squeeze on available stock has driven prices back up after they fell during late 2022 and into 2023,” notes Bailey. Prices are now at record highs and affordability is tight in most mainstream markets, but Bailey suggests positive economic vibes mean “there appears to be room for a further uptick in prices.”

Luxury housing markets “have generally seen considerable outperformance over the past four years.” High-value hotspots in Florida, for example, saw prices surge upwards at more than double the national average (Palm Beach values have risen 113% since Q1 2020, according to Knight Frank’s indices). The likes of Dallas and Austin in Texas, and Aspen in Colorado, have also seen big growth.

California’s prime markets, however, generally lagged – although both Orange County and Los Angeles still out-paced the national average.

More recent data “points to more mixed price growth,” notes Knight Frank, with Florida’s hubs seeing slower growth than key Californian markets over the past 12 months, and Austin seeing prices decline.

Prime New York is “the key outlier,” says Liam Bailey. Average residential property values in the Big Apple have fallen 3.3% over the last four years. KF puts this down to “an inventory overhang that weighed on the market during 2020 and 2021,” as well as the city “missing out on the second home market boom through 2022.”

In addition, a spurt of new supply (6.5% more listings over the last 12 months) helped to push prices down by more than 5% since early 2023 for many international buyer groups – including Brits – prompting Bailey to declare that New York “is beginning to look like a buying opportunity” for those with the right currency.