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The Manhattan sales market will hit the reset button in 2017, with price growth slowing throughout the borough after months of declines in the luxury segment. Brooklyn and Queens' sales markets will see slower paces of growth as well, with the Bronx projected to see sales prices decline in 2017.
As the sales market slows and rents continue to rise, more New Yorkers will become homeowners in the coming year. Transportation shake-ups are anticipated around New York City, including the temporary closure of the L-train and the long-awaited opening of the Second Avenue subway. These changes will transform neighborhoods' public transportation availability, playing an integral role in renters' and buyers' moving decisions over the next year.
"For Manhattan buyers, 2017 will be a year of increasingly slower price growth, as the market recalibrates after years of luxury inventory overload,” said Krishna Rao, StreetEasy economist. “On the rentals side, affordability will decline even further. We expect to see more people who have saved for a down payment–especially Millennials and other first-time buyers–taking advantage of a slowing sales market and moving quickly to buy a home in the face of an impending mortgage rate increase. Especially for those who plan to live in an apartment for more than a few years, the investment could pay off sooner than it has in the past.”
According to the StreetEasy Hot Market Index, Kingsbridge in the Bronx will be the hottest neighborhood of 2017, but Brooklyn neighborhoods dominate the rest of the list.
According to StreetEasy:
►The Manhattan sales market will recalibrate. Manhattan's median resale price will have the slowest growth of all boroughs as oversupply in the luxury tier weighs down the market. The Bronx will be the only borough where resale prices will decline, falling 1.4 percent over the next 12 months.
►Little relief for NYC renters. Median rents are expected to rise across all boroughs and continue to outpace income growth in the coming year. Shrinking tipping points–the number of years it takes for buying to make more financial sense than renting–and rising rents will drive prospective buyers to evaluate homeownership.
►Transportation–or lack thereof–will transform neighborhoods. Neighborhoods where transit options are being added–like Yorkville and Hudson Yards–and neighborhoods where transit is temporarily halting–like Williamsburg's L-train–will receive an influx of interest as New Yorkers seek either a more convenient commute or a bargain.
►Bronx's Kingsbridge tops StreetEasy's 2017 hottest neighborhoods list. According to the StreetEasy Hot Market Index, which ranks the city's neighborhoods using a series of key performance indicators, Kingsbridge came out on top. Brooklyn neighborhoods dominated the list, occupying six out of the 10 spots.
"Transportation will be top of mind for apartment hunters next year,” said Rao. “Expect heightened competition in previously less accessible areas of Manhattan, as neighborhoods such as Yorkville and Hudson Yards enter the spotlight. This year's list of hot neighborhoods is all about trade-offs New Yorkers are willing to make, whether that means extending your search by one neighborhood in exchange for a nearby park or waterfront views, or extending your commute to find a relatively affordable single-family home."