New York’s slow multifamily market has continued to plague the real estate industry through the first half of the year, with the number of deals hitting their lowest point since 2011, according to a new report from Ariel Property Advisors.
Overall, the city saw about $3.4 billion worth of sales across 169 deals and 238 buildings from January through June, respective declines of 47, 24 and 50 percent compared to the second half of 2018.
Ariel Property Advisors president Shimon Shkury said in a statement that he expects pricing for most multifamily properties to drop, but some types, such as free market buildings and old 421-a buildings, will likely be unaffected by the new laws.
“In light of the new laws, we have revisited our underwriting methods for every type of multifamily asset and have been advising sellers of these buildings on a daily basis about our view of the current climate,” he said.
Numbers were down across the board in every submarket except Queens when compared to the second half of 2018, according to the report. Manhattan saw a total of 52 deals across 68 buildings worth about $1.4 billion, declines of 17, 33 and 55 percent compared to the second half of 2018, respectively.
The decline was even sharper in Northern Manhattan, which saw 14 deals across 28 buildings worth about $237 million. These were respective declines of 58, 77 and 70 percent compared to the second half of last year.
In Brooklyn, there were 40 deals across 56 buildings worth about $965 million during the first half of the year. This was a 27 percent decline in transaction volume and a 53 percent decline in building volume, while dollar volume dropped by just 2 percent.
The Bronx saw 38 deals across 52 buildings worth about $405 million, declines of 21, 48 and 31 percent, respectively, compared to the second half of 2018.
And while the number of deals and dollar volume remained low in Queens compared to the city’s other submarkets, it was still the only borough to see an increase in any category. The borough saw 25 deals across 34 buildings worth about $393 million, a 56 percent decrease in dollar volume but a 14 percent increase in transaction volume and a 6 percent increase in building volume.
The report puts the blame for the slow market squarely on the new rent laws that the state government recently passed. Activity leading up to the new laws had been slow thanks to uncertainty over what state lawmakers would do.