As we dive further into 2022, the real estate market is still performing exceptionally well, especially in New York City. While no one can predict what’s to come, it looks like the pandemic is out of mind, and the current real estate trends leave the market full of opportunity. Interest rates are increasing but remain at historic lows. The rental market has rebounded and, in most cases, surpassed pre-pandemic levels. High inflation has created a demand for tangible assets, and for the first time in a while, we see both a seller’s and a buyers’ market.
Though some believe the market will cool off due to rate hikes, we are optimistic and still think it’s a buying opportunity. The market is still strong and showing signs of growth. If you’re an investor with capital at your disposal, this works well in your favor. The current real estate trends you can read about below will help you position yourself for long-term gains.
Interest Rates Remain Historically Low
When rates are low, the cost of capital is cheap, which has helped catapult the market since the passing of the HSTPA act in 2019 and the pandemic. Based on recent hikes by the Fed, this won’t last forever. However, we have created an environment where sellers want to take advantage of the high property values, and buyers want to take advantage of the cheap cost of capital.
Many owners in today’s market fear missing out on previous market cycles. As a result, the buyers have been on the sidelines for the last two years. This market is one of the most transactional markets we have experienced in the past decade. IPRG has no inventory shortage and can lead you in the right direction to make your next investment and take advantage of today’s market.
No Shortage of Capital
For the first time in a long time, we are in a market where you have sellers that want to sell and buyers that want to buy. It almost feels like an artificial black hole manifested in the investment sales market from the second half of 2019 until late 2020. Now renters and investors are rushing back into NYC, and sellers are looking to cash in.
Buyers waiting to invest in NYC over the past two years are anxiously looking to deploy capital into the market. They have a good reason to feel that way. Rates are still at historically low levels and rising almost weekly. Why so optimistic? NYC is again the place to be, and the rental market is on fire. This market surge has created the perfect storm of investor capital and seller inventory.
Rental Market on Fire
While rents had plunged during the 2020 and early 2021, they are now surging. Rents are up to 30%-40% in most neighborhoods compared to last year and outpacing inflation expediting the return of New York. For every person that left, two are now returning—leaving multifamily investors bullish on New York. With rents up, many investors have expressed that it outweighs the recent rate hikes. In the next 1-2 years, sellers looking to exit should take advantage. IPRG has coverage in every neighborhood. Reach out today for your next investment.
The Rise in Pricing Continues
Because of interest rates, inflation, rising rents, and no shortage of capital – pricing in NYC continues to increase. Market rate assets in core markets will continue to reap the benefits. Due to the lack of housing supply, we do not anticipate this slowing down anytime soon. That being said, rent has stabilized, and properties located in tertiary markets remain attractive today. Still, they can potentially see a decrease in value as rates rise.
Take advantage of the high selling prices still trending today, and work with an experienced agent from IPRG to sell your investment property. Our market specialists will use this trend to your benefit and negotiate the right offer to maximize your ROI.
Still Undecided? Reach out to a Professional Today
These are the current real estate trends, and we will keep an eye on what’s to come in the 3rd and 4th quarters of the year. The Fed has announced the potential for two more rate hikes by year-end. Can the rental market keep rising to offset the rate increases?
Our experts understand the market trends and how they will shift in the future. Our team will give you the advantage you need to make sure you make the best business decision. We’ll get you the best value for your property and maximize your ROI. Whether you are selling or looking to buy IPRG will give you the advantage in this trending market and reap the long-term growth.