Feet are always in price
Real estate in the States is usually estimated in terms of square feet, not per square meter. We will keep this American feature, but those who want to get the value in the square meters familiar to us can use the coefficient of 10.75, which, unlike the dollar exchange rate, does not change over time.
So, about prices. According to Roger Erickson of Sotheby's International Realty, apartments with a view of Central Park (Central Park) are now worth about $5,000 per sq. m. foot – and last year this figure was significantly lower - about $2,000. The same apartment has just been resold – but for $25 million. It is in the vicinity of Central Park that the cost of housing is growing to the greatest extent, in other areas prices are not rising so rapidly, and the pace depends very much on the location of the object.
However, many are looking for a promising rather than currently popular area. As such, Roger Erickson notes the Lower East Side, where many new residential complexes are being built. This area is a motley mix of boutiques, markets and cafes, it is here that the famous Chinatown is located. Real estate here can be purchased at prices starting from $ 1 million - it is in this price category that the Prudential Douglas Elliman company puts up for sale houses.
The generally accepted opinion about the price situation is expressed by Robert Morgenstern from Gumley Haft Kleier: "No investor can count on buying a good object for a penny. In order to enter the market, he will have to spend at least $ 1 million." And yet meticulous real estate hunters can find affordable options even in this difficult situation. Overseas Homesearch is selling the Park Avenue Place residential complex, a project in the heart of Manhattan, where prices start at $800,000. And yet this is rather an exception, the prices for the rest of the apartments are in the region of $ 1 million and above.
The most attractive options for investors, promising good income and guaranteeing the reliability of investments, belong to the high-budget segment of the market. "As a rule, I recommend buying large apartments in New York in good neighborhoods," says Dina Reynolds, head of DR Investment. "They have the best consumer qualities and are the most stable in case of a crisis. In 1990-1992, the New York market was in crisis, then the value of real estate fell to 30-50% depending on the area. So, prices for prestigious real estate returned to the previous level by 1994, while cheaper ones recovered much longer. I advise buyers not to forget that any market has a cyclical nature, and choose expensive, reliable investment objects."
An example of such an object is an apartment of 327 sq.m. on Crosby Street in the Soho district. This is one of the famous New York lofts - the building was built in 1890 and was used as a factory until it was completely rebuilt and became residential, designed for only 13 apartments Among the former and current owners of apartments in this building - Nicole Kidman, Courtney Love and Lenny Kravitz. The cost of the apartments is $6 million, the sales are conducted by DR Investment.
The newer, the easier
Well, what about the price dynamics? Having received impressive examples of how the value of real estate has increased in the Central Park area, you are probably waiting for no less impressive figures for other areas. Indeed, recently the market has been growing by up to 20% per year and is still on the rise. "Small objects sell very well," says Robert Morgenstern. - Apartments with two or three bedrooms, especially in renovated buildings, are very popular, there are cases when buyers outbid the price. Still, I expect the average growth rate to decrease to 8-10% per year, although not so long ago we all gave forecasts for a more rapid development of the market."
As in any other city, there are areas in New York that are developing faster than others, where price dynamics are ahead of the city average. As one of these areas, Morgenstern calls Hell's Kitchen, so named because of its once dubious reputation. Today, the face of the district is rapidly changing, there are many new condominiums.
In general, houses in Manhattan are divided into cooperatives and condominiums. Many old buildings are cooperatives, that is, in fact, tenants-shareholders, where the already existing community of tenants has the right to decide who can buy apartments in their building. A Russian investor should be aware that he is unlikely to be able to be approved by the cooperative and make a purchase. Fortunately, new houses are most often condominiums, where buying for Russians is quite possible.
Agent Donna Olshan believes that the most economical offers for foreign buyers are apartments on the Lower East Side, Financial District (Financial Disrtict) and in Greenwich Village (Greenwich Village). "Downtown has been popular for a long time," says Donna Olshan. - It is fashionable, the objects are diverse, the houses are charming, many people like the upper floors. Prices in downtown areas have increased by about 27% over the past year alone." However, it should be borne in mind that life in downtown literally freezes at night, which not everyone will like.
The more popular, the more reliable
What about the cheapest urban areas? Robert Morgenstern is not sure that in places like Harlem, where real estate prices have experienced unprecedented growth over the past two years, the same trend will continue to be observed. He is also not sure that they are good for buyers looking for reliable investments for the long term. Here you need to have the excitement of the player to quickly hit the jackpot, risking that the rapid growth will suddenly end.
That is why the advice of most experts is to choose the areas in which most people want to live. These are the already mentioned neighborhoods of Central Park, Park Avenue, Fifth Avenue, West Village, Tribeca and Soho districts. For example, in Tribeca, one of the most expensive areas of the city, which has become prestigious relatively recently, you can look at the legendary New York lofts, the price of 1 sq. ft. has increased by an average of 20% over the past year. Today it is about $1,050 - but this does not deter buyers who want to live in one of the most prestigious corners of Manhattan.
Manhattan will not let you down
There is no doubt that New York is one of the most attractive places to buy. It is not surprising that housing prices in this city are within reach only for very wealthy investors. However, in the near future, the boom may come to naught – this is due to the recent fall in the stock market and the projected further depreciation of the dollar. "The economic problems in the US are more complicated than we thought," says Andrew Langton of Aylesford Property Consultants. – They may soon push people to sell their real estate. There are a lot of good offers coming to the market now, which was impossible six months ago. It will be possible to make a very successful purchase in the next two quarters."
And yet, with any possible development of the situation, one conclusion can be drawn - the most expensive offers will always be in price. Manhattan is an almost unsinkable investment, since the demand for both buying and renting real estate is always high here.