We expect overall prices to see low-single digit growth on average in the 2016 year. This means that mid-market, (under $5MM properties in prime areas or under $2MM properties in desirable emerging markets), may see mid- to high-single digit appreciation. This will be balanced out by the highest priced properties experiencing single digit declines and offering concessions to incentivize buyers to bite. Offerings like 220 Central Park South will be a grand slam, falling in the first category, but we expect that other properties in the ultra-luxury segment won’t be turning over as quickly.
We also believe that 2016’s story will be told at the property size level. In other words, averages will tell very little of the story; in fact, averages may seem rather boring by falsely conveying that the market is largely standing still. It’s underneath this top layer of data that most of the exciting action and movement will occur. Once you start slicing and dicing the market by the size of the apartments (a.k.a. studios, 1-bedrooms, 2-bedrooms) and the overall price-point (a.k.a. low-, mid-, upper-range of the market), we expect quite some fodder for meaty and meaningful analysis.
Therefore, while we expect the pricing picture topline to look rather steady, we predict some pricing changes will unfold under the surface.