When you think of Manhattan, you don’t generally think of end of the year closeout sales. However, that’s exactly what happened as 2012 came to a close, when homebuyers went on a shopping frenzy! In the final three months of the year, the number of home sales in New York’s most glamorous borough increased by a whopping 40%, even though the number of homes to hit the market was declining the entire time. In fact, by the time the ball dropped in Times Square on New Year’s Eve, there were only about 6,500 homes for sale in Manhattan – the lowest total in more than seven years. Still, though, New Yorkers kept buying… and buying… and buying! Not only did the number of 4th quarter sales go up 20% when compared to the 4th quarter in 2011, but the median sales price went up, too.
So, will the momentum keep going into 2013?
According to real estate experts in the city that never sleeps, absolutely! That low inventory is just what New York sellers need to increase their asking prices. In fact, so-called luxury transactions were the fastest and the most furious as 2012 came to an end. So, clearly, Manhattan buyers weren’t shying away from big price tags! But as nice as it is to see prices go up, an increase in prices alone won’t signal a full recovery for the Big Apple. That’s because prices are still nowhere near where they were before the housing bubble burst. Neither are sales figures. Even if you take the giant balloon figures out of the equation, prices and sales are still significantly lower than they should be, on average, in a “normal” market.
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The good news is that New York’s housing market – and Manhattan specifically – appear to be moving in the right direction. And, for the first time in years, real estate experts say they feel the local market is “strong”, instead of just “stable”. However, what remains to be seen is if the demand for Manhattan housing will stay as strong in 2013.
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A big reason for the rush at the end of 2012 is that New Yorkers wanted to close deals while they could still take advantage of certain tax ramifications. Since a number of tax laws are changing, it forced many buyers into a corner. New York realtors admit that many of the end-of-year purchases that took place normally would have dragged on into January and even February, had the tax laws not changed.
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Of course, tax laws aside, people will always have a need – and a desire – to move to Manhattan. One thing that could work in the local housing market’s favor this year is pent-up demand. Because of the recession, lots of people stayed put – and did so for a very long time. But as the recession gets further and further in the rear-view mirror, more and more people will start to get “cabin fever” and will want a new place to call home. New York realtors seem to think many of them will choose Manhattan – either as transplants, or as locals simply looking for a change of scenery in their existing neighborhoods. Soon enough, we’ll see if they’re right!
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