According to a new report by The Real Deal, the New York residential market value only grew 3.6% last year. During the same time commercial properties grew 2.4% and hotels were up less than 1%. This is the slowest growth in the past 6 years and could be indicative of a larger recession looming.
For 2019, the total market value for New York City went up $62 billion to $1.4 trillion, according to the Wall Street Journal. Manhattan saw the smallest increase with 2.1% and the Bronx had the largest growth with a 6.3% increase. Brooklyn is up 5.8%, while Staten Island and Queens rose by less than 3%.
The slow-paced growth is due to a several factors including a slowing global economy and over development (especially luxury condos) in the past 10 years. Also, property taxes are expected to rise 6.7% in July. Across the board, there has been slow rent growth, lackluster home sales and a reduction in commercial sales.
Moreover, the one % are beginning to ditch their swanky apartments that they spend two days in a year. Historically, New York City real estate has been a sound long-term investment for international players, but with everything happening, we may see a sell-off. Times are changing, and the Oligarchs are starting to want out. Bye-bye!
Need more proof, Barron’s just announced oil and copper are falling, which is typically a bad signal for the global economy. I expect to see sales flatline this year and drop in 2021. The recession is coming, it’s a normal occurrence, we just need to embrace it.
Do you think we’re headed towards a recession/correction?