« Mortgage Report: Week of April 3rd - 7th

NYC Housing Still Pushing Higher

Posted by Noah Rosenblatt on April 4, 2006 at 10.14 AM

A: In today's NY Post, there is an article stating that Manhattan's residential real estate market is still strong despite a slowing nationwide housing market. The report is sourced from BrownHarrisStevens and it should be noted that the data could be skewed towards the upside as BHS handles alot of the high end inventory in New York City. Nevertheless, the numbers don't lie and this report shows continued strength in the NY markets.

According to the article:

Four of the city's top real-estate brokerage firms are reporting increases in many housing categories, including a record price per square foot, higher apartment prices and, according to one report, a 47 percent increase in condo sales over the previous quarter. The latest numbers released by Brown Harris Stevens show that the average Manhattan apartment is $1.258 million, 15 percent higher than the last quarter, and 8 percent better than the first quarter in 2005.

While this report shows a rosy picture for NYC real estate, it also addresses some of the changing fundamentals that are hitting our housing market; such as rising inventory and longer time on the market before contract signed. Specifically, the article mentions:

But among the numbers that might not bode well is the listing inventory, which is 59 percent higher than last year, and almost 16 percent more than the previous quarter. Also troubling is the average 138 days it takes to sell an apartment - 44 days longer than it took to unload a flat during the same period last year.

I've reported on this change in fundamentals before and it shouldn't be a surprise; read my posts on Contrarian Investing and see if this investment strategy is for you. More importantly, buyers and sellers in NYC should understand and accept that a correction in housing is completely normal and a healthy sign of a generally bullish longer term housing market.

A snapshot of the pricing breakdown in NYC as reported in todays NY Post and cited by BrownHarrisStevens: