A question I get all the time is “where do I think the real estate market is heading after the elections this fall?” I may not know exactly whats going to happen, but I can tell you the party always ends. I am not exactly sure, but here are signs that indicate one should proceed with caution.
Here is an except from the recent Manhattan, Brooklyn and Queens rental report – Rents in Northwest Queens – comprised of the neighborhoods of Long Island City, Astoria, Sunnyside and Woodside – were softer this year than last year as newly developed inventory continued to enter the market. Median rent declined 8.2% to $2,768 from the same month a year ago. Average rental price declined 4.7% to $2,909 over the same period. Median rent moved lower across all unit sizes with bigger declines in the larger sized apartments.
The stock market has done something it hadn’t done since December 31, 1999. Recently, all three of the major averages closed at record highs on the same day for the first time since the last millennium, according to Bespoke Investment Group. While history doesn’t always repeat itself, it’s worth mentioning that all three topped out within a couple of months and a massive economic recession developed soon thereafter.
The Fed is worried about a couple of things. The minutes from the July FOMC meeting had a little bit of everything, suggesting the Fed still wasn’t sure when the next rate hike would occur. While there were numerous positives, the Fed suggested it was particularly worried about banks in Italy and stretched valuations in the US commercial real estate market.
