With Airbnb listings squeezing New York condo rents, it just makes sense to buy instead
Airbnb listing have caused rents in some neighbourhoods of New York to surge by as much as 63pc, while prices have fallen by almost 8pc on rising inventory
New York City renters already pay some of the highest rents in the US, but the widespread use of Airbnb is pushing even more people out of the city by contributing to soaring rents, New York City’s Comptroller Scott Stringer said, citing a commissioned report by the city. Airbnb counters that rents are now falling in many neighbourhoods.
But now, with condo sales in Manhattan and Brooklyn faltering, an affordable place to live may instead just be a down payment away.
New York City home sales have started to take a hit from the new federal tax law changes. Even though the median sales price in Brooklyn rose in the first quarter of 2018 by 3.2 per cent to US$795,000, the number of sales fell 13.9 per cent after 10 straight quarters of sales gains, according to property agent Douglas Elliman. The Brooklyn condo market led the declines, with year-over-year median prices falling 7.6 per cent and sales down 16.9 per cent.
The Manhattan market saw similar declines, with first-quarter median prices falling 2 per cent from last year as the number of sales cratered by 24.6 per cent. Condos again told the story, with a year-over-year median price decline of 1.3 per cent and the number of sales falling by 33 per cent.
It’s not just a case of the most-popular boroughs being too crowded that no one wants to live there any more. Tighter credit and higher mortgage rates, along with the reduced ability to deduct mortgage interest and state and local taxes, means that even the top end of the market is suffering.
Elliman estimates that the sales price in the Manhattan luxury market slid 15.1 per cent year-over-year in the first quarter as inventory rose at more than twice the rate of the entire New York City market. The absorption rate, the number of months to sell all inventory at the current rate of sales, rose to 20.4 months from 13.4 the year before, with active inventory in Manhattan rising 15.4 per cent to 1,494 units.