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The New York real estate market is going to continue to bounce around for 2018 and the foreseeable future. With rising mortgage and interest rates and the uncertainty of the federal tax overhaul that went into affect late last year, the market will continue to shift to a buyers market this year. Inventory will continue to increase as the prices of apartments continues to drop.

Overall the sales volume in the city is at the lowest it’s been in 9 years. Sales are down 17% while inventory is up at a rate of 17%. This has also caused the average rate of an apartment in Manhattan to fall from $2.2 to $2.1 million. Regardless of the apartment size, everything is selling for less then it would have 2 – 3 years ago.

The desire to acquire property in the city is down. Foreign buyers are down 40% the lowest it’s been since 2015. Overseas economics are starting to slow down and foreign governments are cracking down on using real estate for money laundering and offshore money laundering.

Most of the changes in the New York market are due to the lower-yield interest rates in the market. With this change comes the change in incentives available for buyers. The change in incentives and hike in mortgage and interest rates coupled with the fact that sellers believe their properties are worth and what buyers are willing to pay is starting to affect the market in the city.

Another major issues plaguing the New York market is the influx in luxury condos. Sales of these units are down 37% with an increase in the number of new condos and properties available. This puts the city at a 15 month supply of luxury condos which means buyers have a larger selection to choose from.

There does not seem to be much change on the horizon for the New York real estate market so investing in a property at a much lower interest rate and overall price right now might yield a higher resale value when the real estate market turns around in the future.