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A year ago, Manhattan homeowners lived within the firm grasp of the worst recession in 70 years. A skyrocketing real estate market seemed ready to come back to Earth, as carnage in the financial services industry – which spread to just about every other business – decimated incomes and net worths throughout the city.
From the second quarter to the third, this year, the sale of co-ops and apartments spiked between 46% and 69% according to several reports from the real estate business. Sales are still lower than last year, but the recovery has been nothing short of amazing (to the chagrin of those of us who had dreams of one day moving up from the rental class).
Prudential Douglas Elliman reported a price increase of almost 2% from the second quarter, though the median was down 8% to 18% from last year – to the $760,000 to $850,000 range. Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm, calls this good news, but cautions that it doesn't mean we're at the bottom.
For once, New York's real estate market is reflective of the rest of the country, where signed sales contracts increased for the seventh consecutive month in August, according to the National Association of Realtors. Across the country, home prices gained 1.2% from June to July, as measured by the Case-Shiller index of 20 cities.
The $8,000 tax credit and improved consumer confidence are credited for the increase in home sales both in New York and throughout the United States. Pamela Liebman, CEO of The Corcoran Group, a real estate firm, says that the anxious stayed on the sidelines during the first half of the year but pounced on depressed values in the past quarter. Once the tax credit disappears, though, the party (at least part of it) is expected to come to a close.
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