What's in store? Brokers predict a good year for luxury leasing and foreign investment.
As the new year begins, Kathy Braddock of Charlas Rutenberg Realty is keeping a close watch on Wall Street. "If I had a crystal ball, I'd say the economy's growth will be slow and steady. I believe New Yorkers are sensitive to the Wall Street market. As long as Wall Street stays stable, we will have a stable real estate market," she said. One thing the industry can rely on is Manhattan's unwavering appeal. "New York is here to stay. I don't see a big flight of families to the suburbs. Core industries are okay. I'm very positive about the economy."
Lack of new construction next year will keep demand high. "I think the rental market is relatively strong. The condo market is high because there is always foreign money in New York. I don't see any downside. There aren't a lot of shovels in the ground, so there will always be a pent up demand for existing property," she explained.
As for her firm: "We've been fortunate, nice steady growth. We're expecting a minimum of 100 new agents in Rutenberg this year, and a lot of brand new initiatives. While we're not physically expanding, we're expanding our abilities to communicate," she said.
Doug Heddings, president of the Heddings Property Group, also expects his firm to expand over the next year as the luxury market continues to flourish. "Currently we have offices in Westchester, Greenwich, Rockland County, and the Hamptons," he said. "There's always the possibility of Brooklyn, but we already have so many agents without physical offices. Our focus in 2012 will be continued expansion." Overall, he added, the year will play out much like 2011.
Jacky Teplitzky of Prudential Douglas Elliman is looking well beyond the Five Boroughs for opportunities.
"We are going to expand our presence in the foreign market," she said. "I'm looking into expanding and putting more of my time and effort into Central and South America."
When it comes to foreign investment, she explained, buyers from South America and Russia are leading the pack.
"I just came back from Brazil for a business meeting--they're number one in the market for second homes and investment properties in the US looking into places like Miami and New York," Teplitzky said.
According to Prudential Douglas Elliman's latest market report, condo sales surged during the third quarter due to foreign investment, dropping over the past quarter to a more consistent level.
Teplitzky compares domestic activity, on the other hand, to a cake that won't rise, despite all the right ingredients being in place.
"The interest rate is low, and yet I don't see people getting a sense of urgency," she said.
Of course, that bodes well for the rental market. "There is a correlation between slowdown in act in purchasing and amount of activity in rental market," she said.
"It's also an election year, and I don't think there are great candidates. There is low faith in the leadership of the country, and that will have an impact on the economy."
Jonathan Miller of Miller Samuel predicts the upcoming election will put things on hold. Stability will continue, but housing prices may slip. "I can't virtually guarantee that there will be much done about the national housing market until at least the election in November," he said.
"I think mortgage lending will continue to remain high because lenders are still afraid of their own shadow. Mortgage rates are at low levels that lenders have no margin to work with so they are still struggling." Miller added, "based on what we see now there's a chance that rates will remain at their near records lows. A lot depends on what happens in Europe."
Meanwhile, because the rental market is going strong, "multifamily investments will increase because the rents are high so more buyers will invest," predicts Dottie Herman of Prudential Douglas Elliman. Another popular purchase, she added, will be second homes.
David Schlamm said that these conditions make 2012 the year to buy, despite demand for rentals. "The rental market will continue to be strong in 2012 although there's a little more inventory right now during our traditional slower months.
I believe that inventory will be absorbed very quickly as we approach springtime," he said.
"I think people will look back at this time and regret not buying."
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|Title Annotation:||THE RESIDENTIAL MARKETPLACE: BROKERS WEEKLY|
|Comment:||What's in store? Brokers predict a good year for luxury leasing and foreign investment.(THE RESIDENTIAL MARKETPLACE: BROKERS WEEKLY)|
|Author:||Grey, Liana; Lo, Roslyn|
|Publication:||Real Estate Weekly|
|Date:||Jan 11, 2012|
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