Issues facing the New York real estate scenario for 2014

The New York real estate scenario during 2013 was quite good for real estate investors as well as for real estate buyers with prices getting shattered in both the commercial and residential sectors. However, the slow pace of job growth as well as income and wage growth in the nited !tates is still holding bac" the real estate NYC recover# and that is not li"el# to change quic"l#. There e$ists demand for the available New York properties for sale boosted b# an increased demand from homeowners turned renters for multi%famil# buildings. However, the demand ma# be slowed down in 201& as suppl# and demand have swapped places and there ma# be actuall# having been too much multi%famil# buildings in 2013.

The demand for the available condos for sale in NYC is setting new records with Hedge funder 'ill (c"man and a group of investors reportedl# pa#ing more than )*0 million for a unit at +$tell ,evelopment-s lu$ur# condo tower .ne/0. 1f the sale closes at this rate, it will set a record as one of the most e$pensive available Manhattan condos for sale. .n the negative side, the recover# in the condo mar"et has not matched with that of the single% famil# mar"et and developers are not willing to ta"e the ris" of putting up new condo buildings. The builders and developers are ta"ing a dual path option that consists of building rental apartment building with an e#e on switching it to condos within 12 to 12 months depending on mar"et conditions.

3eanwhile on the commercial side, several deals are happening within the New York real estate scenario with deals crossing the )1 billion benchmar". This includes a partnership between 'eijing based developer !oho 4hina and ban"ing giant 3.!afra 5 4o. that bought a piece of 6eneral 3otors 'uilding in a deal that valued the propert# at )3.& billion.

The interest rates are fuelling uneasiness for the real estate NYC in recent months with bu#ers feeling a renewed sense of urgenc# to ta"e advantage of historicall# low interest

rates before the cost of borrowings shoots up. The an$iet# was eased to some e$tent during the month of .ctober when 7anet 8ellen was nominated to replace 'en 'ernan"e as the 4hairman of 9ederal :eserve.

The interest rate for a 30%#ear fi$ed rate loan is hovering above &;. However, it is e$pected to reach as high as 2; in the ne$t #ear as per the ban"ing<financial e$perts. 'oth the New York real estate buyers and New York real estate brokers are e#eing on how the interest rate situation would open up during 201&. (ccording to some sources, increase in interest rates might dampen the activit# in the long%term, would slow the growth of home prices and would put bra"es on commercial investors- abilit# to refinance the propert#.

=and prices in the >ew 8or" cit# has reached previousl# untested heights with price per buildable square foot averaged roughl# )&00 in 3anhattan in the first half of 2013, while the prices for land suitable for prime lu$ur# residential development soared to )000 or )?00 per square foot in some cases.

(mong the most anticipated projects set up to inflate in 3idtown either onto the mar"et or out of the ground in 201& include 7,! @A!"inn# TowerB at 100 Cest /0 th !treet that is slated to rise to 1,3/0 feet. The other one is the 1,&23 foot glass# s"#scraper that +$tell ,evelopment 4ompan# Done of >ew 8or" cit#-s most active real estate developersE building at 22/ Cest /0th !treet. There is also some potential for transformative piece of legislative bill that is set to be passed before 4ongress in 201& which is the 3ar"et Flace 9airness (ct.