Luxury buyers look to the New York and Northern New Jersey region due to the proximity of these locations to New York City which is one of the top business capitals of the world. Due to this there is a higher demand for luxury mansions and estates in the area.
For Special Properties, keeping up to date and watching what is happening in this market as well as the real estate market in general is one of the key aspects of their business. This helps to ensure that Special Properties is offering the most informed and well thought out experience to all clients. Here is a look at five things that luxury homebuyers in New York and New Jersey should know this year and take into account in the future as well.
1. Changes to Mortgage Products
For the first time in over 9 years mortgage limits are being increased by Fannie Mae and Freddie Mac. This will make it easier for luxury home buyers to finance more. Previously the loan limit was set at $417,000 but since that limit was first implemented it had not increased due to issues and instability within the market during the financial crisis.
The limit is being increased to $424,100 and in high cost counties the limit can be increased to $636,150. Not only is this a great opportunity to finance a higher amount of your luxury home purchase especially in the higher priced markets of New York and New Jersey but it is also a sign of the market being stronger as the loan limits have been increased due to the strength of the market.
2. Foreign Investors
The real estate market has seen an increasing amount of foreign investment over the past few years. Last year alone saw $19.2 billion in Chinese investment in the United States. While this was in the commercial real estate sector, these foreign investors are also making investments in luxury homes in upscale communities throughout the country.
They are primarily focusing on investment on the coasts including 46% of investment in the New York area. Special Properties works with buyers from all over and helps to connect foreign buyers with the right properties as well.
3. Market Growth
For buyers, the luxury home market is moving into a good position as prices are beginning to lower. Prices are leveling out in the market, especially the ultra-luxury market which means that buyers options may increase as prices come down to their price range. On the other hand, it also means that their will be more interest in the market from other buyers which creates the potential for additional competition in the luxury market. As luxury homes were sitting on the market the prices have lowered meaning that a better deal and potential investment for future long-term growth may be easier to come by.
4. Post-Election Growth
With the recent election, the stock market saw a rally that has not been seen JFK’s election. This was not only true for the stock market but also the luxury housing market. The luxury housing market saw an increase in the number of transactions above $4 million dollars in the New York area. Specifically, in New York City the end of November saw a new weekly high for the year 2016. Following that, the first week of 2017 saw its highest volume in the luxury market in the last three years. This is spurring new development in the luxury market which means that there are new options for buyers at this level coming up.
5. Growing Competition
With New York City being such a hub for business and offering so many job opportunities it is no surprise that living in commutable distance to New York is highly desired by many. Due to this there are many areas to choose from when looking for a luxury home in this area. However, as the popularity of being close to the city increases as we are seeing towns like Jersey City rise in popularity so do the prices and the competition. Taking this into account, if you are looking for a location that will give you an easy commute then it is important to consider you may see more competition than a property that is a bit further away from the city.
To start your search and work through any challenges that a buyer may face in the current market, be sure to reach out to Special Properties first.