Market prices for residential real estate in Manhattan, New York have been on the rise since 2013 due to the number of luxury apartment deals in the borough, according to a survey.
CityRealty’s 2017 Year-End Manhattan Market Report showed that apartment sales worth more than $10 million have doubled within the last five years. This indicated that the market has rebounded from the impact of the last financial crisis.
While investors and property owners enjoyed higher returns on high-end apartments, it dealt a blow to sales of much cheaper properties. Transactions for apartments in Manhattan priced below $1 million fell by 35% since 2013.
CityRealty director of research Gabby Warshawer said that these purchases by deep-pocketed buyers primarily drove fewer sales of lower-tier apartments, due to the stark change in prices. For instance, sales for apartments below $1 million are expected to reach 5,040 units, down from 7,787 sold units in 2013. In other states, affordable housing has become rarer that lawmakers consider imposing fees on areas with fewer low-cost homes.
Lawmakers in Utah mull over penalizing cities that lack zoning for affordable multifamily properties, as more people find it hard to buy houses. The fees may compel local officials to make sure there are enough apartment units within the low-priced range, aside from reducing the number of homeless people.
If implemented, it would boost demand for home construction supplies from aluminum estate gates materials to earthmoving equipment. Utah needs more than 38,000 units for people who earn below 30% of the state’s median income rate. According to the Association of Counties, only 8.6% of apartments are affordable across the state.
Transactions for luxury apartments may have a negative impact on overall market prices, but it seems that local officials can encourage the development of more affordable units to offset the higher prices.