Propelled by lower home and apartment prices, housing sales in New York are growing momentum. The first time home buyers tax credit and pent up buyer demand are triggering multiple offers on some properties that are priced below market.
Perhaps of all the housing markets in the nation, Manhattan makes the least financial sense, caught in the world of monetary extremes. But you've got to love the city that never sleeps, home of world financial dominance. When Lehman Brothers went into bankruptcy more than a year ago, Manhattan housing began a free-fall at double-digit rates of deflation. But New Yorkers aren't patient people and as apartment prices fell, buyers looked for opportunity, and foreign investors returned.
The majority of the Manhattan market, however, is still over-priced and seeing little action. Apartments and homes that are getting offers are priced below 2007 levels. Sales should remain fairly strong in Manhattan, bolstered by expanded tax incentives, and slow in the spring when the extension expires. Housing Predictor forecasts Manhattan average prices to deflate 17.2% in 2010.
Sales in the Bronx, Brooklyn and Staten Island are also projected to gain in the early part of the year before turning sluggish. Despite declining prices, new buyers see value in homes that are priced lower than just two year ago levels. Foreclosures in Long Island and the rest of the boroughs that make up 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 11.2% deflation in 2010.
| City |
Forecast |
| Manhattan |
− 17.2% |
| Brooklyn |
− 11.2% |
| Queens |
− 11.2% |
| Albany |
− 10.8% |
| Rochester |
− 7.0% |
| Buffalo |
− 7.3% |
| Syracuse |
− 7.9% |
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 decline 7.9% during the year.
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. A second round of foreclosures is projected for the market in early 2010, which will send 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.
