The puppetry of real estate markets and the looming economic crisis have hit New York and its luxury property buyers.
Ah, New York – the place where you can buy an apartment with a view of Central Park for a mere $20 million and call it a “bargain.” Home to some of the most extravagant luxury real estate, the big apple may be starting 2023 with some gloom predictions on behalf of The Wall Street Journal, which is often an almanac for economic premonitions.
New York’s luxury real estate market has something for everyone, whether you’re a billionaire hedge fund manager or just a regular millionaire. In 2023 however, not even being wealthy enough might do the trick. Two things are at play; high interest rates and an expected low Wall Street bonus season.
In case you weren’t aware, down payments for property in NYC have a long-standing tradition of coming from the annual Wall Street bonuses. However, according to the Wall Street Journal, “this year’s payouts will be significantly smaller after deal making slumped in 2022.” This, paired with the plummeting stock markets, has left property at a perilous stance which started showing signs of deterioration back in 2022. Although the previous year did not perform too bad in the overall luxury real estate market evaluations, most of the sales happened before June and left the later end of the year with a declining sales rate. This of course, is expected to seep into this new year.
What does all of this mean? For real estate agents, chaos. Properties selling for less than asking price or buyers backing out last minute in fear of the recession are just two examples. But it isn’t all bad news. Asian buyers, which were often a large part of New York and its luxury real estate market, are returning post covid, putting a floor on how low prices can go. Others, in turn, predict a slow start to the year, but an increasingly busy and fruitful real estate in the later half.