- Interest Rates Are Still Very Low- Interest rates are still near historic lows. This year is possibly the last opportunity to secure a mortgage rate near historic lows with the Federal Reserve expected to raise its rate several times this year.
- Diminished Buyer Pool Due to Tax Law-There are many buyers who will use the new tax law as a reason to delay a home purchase. There are those that already own a home, who will decide against moving to a larger and more expensive home if they lose their tax benefits which are grandfathered in for their current home. With fewer buyers on the market, there’s less competition for those that want to purchase.
- Lots of Inventory On The Market- The number of apartments currently on the market in Manhattan is up approximately 16% from one year ago. Inventory will continue to rise throughout the year and the busy spring market will feature the most second quarter inventory since 2012.
- Negotiating Ability- Currently only one in eight listings are being sold above the asking price, which is down from approximately one in three in 2015. In addition, this January featured a five-year high for days on the market compared to previous January’s. Both of these factors increase a buyer’s ability to negotiate.
- Baby Boomers and Millennials- The new $10,000 maximum itemized deduction on State and Local Property Taxes, in the new tax bill, affects homes in the suburbs such as Westchester and Nassau County more than NYC. There are many towns in those counties that have higher local taxes than NYC. More baby boomers can decide to sell in the suburbs and buy in the city, which would lead to more compeitiion and higher prices. In addition, with a favorable 2018 outlook for the economy, more millenials will accumulate wealth. This group will have more purchasing power in the market during the years ahead.