Troubles on Wall Street have hit the New York real estate market especially hard as businesses have closed shop and pulled up stakes — taking workers with them and leaving empty commercial and residential properties on nearly every corner. Yet the forecast isn’t all grim for the Big Apple as incentives are drawing buyers into some boroughs, and even Manhattan’s devastated residential market may yet be taken off the critical list with an upgrade in the latest projections. See the following article from Housing Predictor for more on this.
Where the real estate boom is credited for being manufactured on Wall Street, the sour economy is dealing a massive blow to the housing market. Manhattan apartment sales are down more than half and housing prices are falling at one of the fastest clips in the Big Apple’s history.
But pent-up demand coupled with low interest rates are pulling more home buyers into the market in Queens, Staten Island and Brooklyn even as home prices decline. The federal government’s first time buyer’s tax credit is also helping to get buyers off the fence, but New Yorkers wonder how long the trend will last.
The faltering economy is dealing a heavy blow to the boroughs of New York. Rental vacancies are up. Businesses are being left abandoned. Bankruptcy filings are rising. The average price of a Manhattan apartment has dropped slightly more than 25% from last year to around $1.25-million.
New York City’s real estate market was bolstered by those working on Wall Street. What started as a subprime lending problem spread into every conventional mortgage type there is in New York as foreclosures rise.
However, the free fall the Manhattan residential market has been experiencing may be coming to an end since the market began its tumble when Lehman Brothers filed bankruptcy a year ago. Indications are growing to show that the market’s free fall is slowing as home sales rise. Housing Predictor has upgraded its forecast for Manhattan for the year as a result nearly three percent, projecting housing values in Manhattan to deflate 29.7% on average in 2009.
Local New York Markets at a Glance
Home sales in the Bronx, Brooklyn and Staten Island should remain fairly steady through the year’s end, despite declining values as buyers see the lower prices as an opportunity. Prices on Long Island are now projected to deflate an average rate of 20.3% in 2009. The Bronx, Brooklyn, Staten Island and Queens are forecast to deflate around 15.8% on average. While sales on homes have improved by large numbers elsewhere, most of New York won’t see much of an improvement for some time as values decline.
Upstate and in Western New York it’s less painful for residents out of the hustle and bustle. In Buffalo home prices are falling with nearly half of all sales being foreclosures. Buffalo is forecast to experience average housing deflation of 12.2% in 2009.
In Albany, the housing market didn’t experience double-digit appreciation during the boom, but as the recession makes its impact felt and financing is harder to get home prices are tumbling. Annual deflation of 9.6% is forecast for the state capitol as Albany battles through the downturn.
Upstate in Syracuse indications are growing to show that the market is beginning to stabilize with home prices being some of the most affordable in the state. But rising layoffs are triggering more foreclosures in Syracuse, which will cause further price erosion. The average home in Syracuse is forecast to deflate 9.1% in 2009.
In Rochester the credit crunch has caused fewer homes to sell, but the market is mainly driven by so-called mom and pop home buyers, home owner occupants who live in their homes. However, with mortgages tougher to get the market is still feeling the impact and is forecast to experience average housing deflation of 8.8% in 2009.
In Glen Falls, where many of the financial wizards from Wall Street bought multi-million dollar homes during the real estate boom prices are falling at double digit rates. Glen Falls surged during the boom but is forecast to see average home deflation of 18.9% by year’s end.
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.