Driven by federal tax incentives, a rising stock market and lower home and apartment prices New York housing sales grew, only to see the momentum slow as federal tax incentives were withdrawn.
New Yorkers aren’t patient people and as apartment prices fell many foreign investors came back to buy. Foreclosures are aiding the volume of sales, but most properties are still highly over-priced. However, sales of distressed properties should aid Manhattan, but it’s still forecast to see average prices deflate 13.8% in 2010.
In the Bronx, Brooklyn and Staten Island despite declining prices, new buyers see value in homes that are priced lower than just a few years ago. Foreclosures in Long Island and the rest of the boroughs of New York will have a major impact on the market as more homeowners walk away from mortgages. Brooklyn, Staten Island, Queens and the Bronx are forecast to average 10.3% deflation in 2010.
Upstate in Albany, the state capital, the housing downturn has been severe with deflation at the highest level for any market in the state. Tight lending markets make it more difficult for buyers to get a mortgage, and until the money supply loosens the market will see slower sales. Average Albany housing prices are forecast to decline 10.8% for the year.
In Syracuse the market is making little momentum towards recovery with falling prices. Rising unemployment and an exodus of New Yorkers, tired of high state and property taxes is hurting the economy. Price deterioration will result with housing prices forecast to deflate 7.9% in 2010.
In ailing Buffalo job cuts and business closings dampened the home sales market, but since the inventory that is selling has seen prices slashed so much on foreclosures Buffalo is experiencing higher home prices. Buffalo is the third poorest city in the U.S. and as such most sales are foreclosures that have gone back to the bank. Foreclosures are projected to rise in Buffalo through most of the rest of the year, sending average prices down forecast at 7.3% for the year.
In Rochester fewer homes are selling as a result of the credit crunch and sales aren’t expected to be robust during 2010 as businesses make cuts to survive and workers lose jobs. The impact of being in one of the two highest taxed states in the country is taking its toll on Rochester, forecast to sustain average housing deflation of 7.0% in 2010.