An update on the NYC housing market and what it means for you

Keep track of trends. Since 3rd Quarter 2008 real estate reports, New York City’s housing market has faced some of its toughest challenges in twenty years. Manhattan has certainly felt the effects of the global financial crisis. It took New York City nearly 9 months to feel the effects of the housing crisis that the rest of the country had been struggling with. And when it hit—it hit hard. The decline in the amount of closings happened frighteningly fast. During the 2nd quarter of 2008, total closings on home sales decreased by nearly 60 percent. However, trends in recent months have shown signs of improvement. On September 18th the government announced that housing starts have hit a 9 month high—indicating that the market is most likely turning around. During the 1st quarter of 2009, closings had increased by 10 to 15 percent and research has shown that home sales will most likely increase further. With the market starting to reshape itself, this quarter and the next will most likely define the new levels of pricing in Manhattan.

The market may be recovering, so take advantage while prices are low. This fall the market appears to be behaving much more normally than it has been over the past 12 turbulent months. Reports show that the number of listings added in Manhattan after Labor Day was similar to last year’s. This bode of confidence in the market shows that consumers are once again feeling comfortable enough to sell. This is good news for sellers—the steep decline has certainly subsided—but it does not mean that the market has returned to the way it was in its heyday. Although inventory has somewhat stabilized, sellers will not be getting the prices they received a year or two ago. New data suggests that asking prices are about 24 percent below levels last year at this time. According to 2nd Quarter 2009 real estate reports for Manhattan, the average sales price of condos is $1,598,000 and the average sales price of co-ops is $922,000—the lowest prices the city has seen in years.

Foreign investors: Listen up! The Association of Foreign Investors in Real Estate has released a survey of its members and has ranked New York City the number one city in the world for real estate investment. The real estate downturn has made New York apartments and townhouses an incredible value for those who earn money in euros, Japanese yen, British pounds, Brazilian reals and other foreign currencies.