The economic outlook for 2019 is looking cloudier than ever.
U.S. stocks took a beating toward the end of 2018. After reaching an all-time high of more than 26,800 in early October, the Dow Jones Industrial Average fell more than 5,000 points by Christmas.
Add to that market miasma a perpetually deadlocked federal government, interest-rate hikes and an escalating trade war, and the economic outlook for 2019 looks cloudier than ever while predictions about a coming recession percolate.
Although the Dow recovered somewhat in January, New York’s real estate industry finds itself navigating some rough waters amid the ongoing backdrop of economic uncertainty. Here’s a look at how some key industry players are responding.
As stock market returns become less of a sure thing, some say investors are again turning to tangible investments such as real estate — a potential windfall for the city’s lethargic residential market.
“My clients have pulled substan上海贵族宝贝论坛 tial amounts of money out of the [stock market] and do not want to sit on cash,” said Keller Williams broker Seth Levin. “I’ve had many conversations with them about taking advantage of the low competition and favorable buyers’ market we are experiencing here in New York.”
Of course, in times of indecision, pulling the trigger on a major investment can be hard for buyers as well, perhaps dampening the extent of a potential bounce back.
Warburg Realty agent Mihal Gartenberg said her American clients are often warier during bear markets and need to be persuaded of the benefits of buying property when stocks are volatile. But she noted that her “international clients consider real estate a stronger investment during times of economic uncertainty.”
The shift in buyer sentiment is most noticeable in the luxury residential market, where the slowdown has been the most pronounced, brokers say. The median asking price for Manhattan condos hit a low of $2.1 million in August, but since then it has started to rise, reaching $2.25 million in December, according to StreetEasy data.
And despite recent Federal Reserve hikes, interest rates remain at historically low levels, which should also encourage buyers.
“I think this market could be the perfect storm for a buyer, with rates still relatively low coupled with the fact that sellers are now more inclined to price their homes appropriately with where the market is today,” said Ace Watanasuparp, vice president of residential lending at Citizens Bank.
In fact, long-term fixed mortgage rates have dropped by nearly half a percentage point from their O阿爱上海同城 ctober peak. Nonetheless, future rate increases could change things quickly and spur more on-the-fence buyers into action.
“You’re not going to see a great sense of urgency until we go up by 1 percent,” Watanasuparp said. “But as rates start to inch up, you’ll see more people feel like they have to make a move if they want to purchase a home and leverage financing.”
Cloudy commercial forecasts
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