New York Mortgage Activity Report: Big Demand in the Big Apple
Since the start of 2007, a burst of New York mortgage activity has broken out in Manhattan and several Brooklyn neighborhoods.
Overall, New Yorkers are in the hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other U.S. cities.
Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, had occurred in all price ranges, from tiny studios to mansions, in counterpoint to the record sales of luxury properties that led the market in the late summer and autumn.
Real estate brokers and statisticians are quick to point out that not every apartment is flying into contract. During the last quarter of 2006, the major New York real estate agencies differed on which way prices were headed.
But now, the three largest real estate companies in the Manhattan housing market agree: For January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.
With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, the attitudes of home loan applicants have done an about-face.
“Their psychology has changed,” said Frederick Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”
Real estate experts say they see no reason for the trend not to continue, with economists predicting stable mortgage rates and a continuing surplus in the New York City budget. International interest, especially from Asia, has also picked up, with agents reporting good attendance at promotional events for high-end New York properties in place like Hong Kong and Tokyo.
However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.
Yet, there is “cautious exuberance,” according to Steven James, director of sales on New York’s Manhattan island for Prudential Douglas Elliman.
SOURCE: International Herald Tribune