In the past couple of weeks, we've heard the experts weigh in on the New York City housing market as all of the major firms, as well as the Real Estate Board of NY, released their Third Quarter Market reports. While initially most had reported flat prices for the third quarter, REBNY announced some positive signs in the recovering housing market with both home prices and volume inching up at a steady pace.
As average home sales prices across the city inched up one percent year-over-year to $786,000, sales volume increased six percent year-over-year. A one percent increase in prices may not get the average home owner so excited, but it's evidence of an upward trend and as we know, "The trend is your friend." Home prices are starting to rise across the country and a number of forecasters predict home price increases around 10 percent nationally over the next three years according to Barron's.
In Manhattan, the momentum of an active spring market carried over to the summer months, with more signed contracts than the previous summer. This forward momentum is being fueled by a perfect storm of market conditions, including extremely tight inventory, skyrocketing rental prices and record low interest rates. Inventory fell to a seven-and-a-half-year low, leaving homebuyers with fewer options and less negotiability. Our red hot rental market also played a huge part in entry level sales, as New Yorkers pondered whether or not it was just cheaper to buy than to rent. With median rental prices up 10 percent, and the average rental in Manhattan fetching $3,453 monthly, it is no wonder that anyone who can buy is doing so now. The market has also been bolstered by the Federal Reserve's announcement of a round of mortgage backed security purchases aimed to keep mortgage rates at near bottom levels.Steve Spinola, REBNY President, had this to say about the numbers:
While no one can predict the future, all signs would seem to indicate that we are at the start of a very exciting time in real estate.
Based on the data, the steady and consistent improvement in the market continues to provide strong evidence that the New York City residential sales market has made it out of the woods and should only continue to improve.