The New York Housing Market: Never Better
This week’s latest figures on new and existing home sales may not be accurately representative of the national housing market as a whole.
Once you dig below the surface, you’ll find that both sales and home prices in some parts of the country are actually going through the roof.
The dividing line between cold and hot is more complex than you might think. It’s not always single-family homes vs. apartments, rentals vs. condos and coops, or specific regions, like Southeast vs. Midwest.
For that matter, it’s not even central cities vs. suburbs. As the old real estate axiom goes, it all depends on location, location, location.
Nevertheless, if one had to generalize, one could say that the weakness in sales of both new and existing homes is most apparent along both coasts.
In the East, it ranges from Long Island, N.Y., to Florida in the south. On the West coast, it’s mainly in California, with a few areas around the Nevada housing market (primarily in and around Las Vegas) thrown in for good measure.
In these markets, the weakness is not limited to single-family homes, but has spread to include apartments as well, where home mortgage costs are simply overpriced.
This is especially true with South Florida home prices, where “see-throughs” are ubiquitous in this market in this day and age.
In the heartland, as well as in the older industrial markets like Detroit, Syracuse, Rochester and Binghamton, the housing market is fairly steady - neither strong nor weak. It never bubbled up, so it has little reason to fall.
It’s pretty clear that one of the dividing lines between hot and cold is price. High priced units are moving briskly in most parts of the country - whether they are in central cities, or gated communities in the suburbs.
Take New York City, for example. A home in Manhattan has never been more expensive than it is today. Condo prices are rising, selling for an average of $1.5 million, reflecting apartments ranging from studios to multiple bedrooms.
The Manhattan housing market is buoyed by Wall Street money. Hedge fund managers, investment bankers and others who make a living on the Street of Dreams can afford to spend big bucks on their weekday digs.
Speaking of bucks, the shrinking dollar has boosted the buying power of foreigners, who are pouring money into New York City real estate as an investment as well as for a place to live.
Another source of demand for mortgage loans is from parents of students who are attending many of New York’s renowned universities.
Instead of paying rent, many are opting to buy an apartment for their kids to live in while they are in school, pay the New York mortgage, then either use it themselves when their offspring graduate, or sell it at a profit.
SOURCE: MarketWatch