NYC Rocks On! Sales/Prices Up!
A: No surprise here folks. If you read this site then you know that I have been reporting that the Manhattan real estate market has been red hot since early January! Open houses are packed, bidding wars are common, finance contingencies are being removed, and now the data comes out at a lag proving all of this!
In my post titled, "What To Expect Heading Into Summer", published about 5 weeks ago I stated:
Since real estate reports are lagging and come out AFTER the deals are done, expect to see very bullish reports on the Manhattan real estate market in the coming months.According to CNN Money:More specifically, JAN - present has been VERY active to say the least with many property's going into bidding wars. As a result, this will lead to strong data reports on NYC housing as we head closer to summertime which no doubt will intrigue the mass media into a number of articles about a market turnaround. The psychological effect of this positive media might lead to some strength in the beginning of the normally slow summer.
The price of a slice of the Big Apple was on the rise in the first quarter, reversing a slight decline in the fourth quarter of 2006, according to several reports released Tuesday.Some notable remarks in the article include:Transactions were way up. Prudential Douglas Elliman reported that sales increased 42 percent compared with the prior quarter. The time homes sat on the market declined 12 percent.
Comments (7)
The market will continue to thrive. In 3 years time the average apt owner will have to pay 75% of their income to service the debt on their mortgage.
Despite the housing implosion ocurring acorss the country as i speak NYC will be fine.
Everyone wants to live here, and will pay any price to do so.
Posted by ed | April 3, 2007 10:02 AM
I'm not quite as sure about the long term direction of the NY market. Generally, when you see strong buying and the market doesn't move much (and it really hasn't moved much relative to how packed open houses have been etc) that's not a good sign. More importantly I've seen two different highly desirable apartments being sold by real estate agents that weren't absurdly priced go under the ask despite packed open houses etc. I expected both these apartments go over ask. One of these was directly overlooking Union Square. The current buying frenzy doesn't surprise me because people had been holding off for almost a year and unlike other investments people buy real estate to live in and so you can't hold off forever. I don't think there will necessarily be a big runup in prices over the next 12-18 months.
Full Disclosure: I just bought a loft in Tribeca and was one of those buyers who had been holding off.
Posted by Ashwin Kapur | April 4, 2007 10:32 AM
Ashwin - The market prices didnt move much because inventory was growing by a large amount over the last year. It appears that what could be concern for a glut of new development inventory may be getting absorbed at a better than expected pace. If it wasnt for the new development inventory that is getting piled on I suspect prices would have rose much higher.
Posted by Mike | April 4, 2007 12:16 PM
I think Manhattan prices rose a bit when compared to prices between June-December of 2006. As for new devs, I am very curious to know what concessions were made to get some deals done over the past year; closing costs, upgrades, price cuts, etc..
I think we are at the tail end of the frenzy right now and I have a feeling in 2 months time at the beginning of June, the entire Manhattan marketplace will have died down some from what we have seen between JAN-MARCH..only then will we be able to get the initial signals to how well Manhattan marketplace will hold up to macro forces and how severe the national slowdown will wind up hitting us.
Posted by Noah | April 4, 2007 12:29 PM
Noah, I assume new development sales not recorded until closing? If so, then shouldn't completed new devs should drive up ppsf in some neighborhoods in the coming year.
Posted by spaceboy | April 5, 2007 10:32 AM
Preices in NYC are NOT UP !
Manhattan Apartment Prices Increase at Slower Pace - Bloomberg 4/3/07
http://www.bloomberg.com/apps/news?pid=20601093&sid=aVdueuOE8F4c&refer=home
"Overall, the median price of studio and one-bedroom apartments fell 2.3 percent to $390,000 and $635,000, respectively, while the price of two-bedroom units fell 2.8 percent to $1.3 million and three bedrooms declined 1.2 percent to $3.1 million, Miller Samuel said"
Posted by dude | April 14, 2007 12:10 AM
dude - report stated:
Those prices represented increases of between 4 percent and 13 percent compared with the third quarter of 2006.
conflicting reports. Even in bloomberg article it states:
Manhattan's median apartment price rose 1.2 percent in the first quarter from a year earlier, the smallest quarterly gain in five years, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said.
Posted by Noah | April 14, 2007 10:00 AM