New York – Demand is Driving the Train
The Big Apple is used to being the center of the universe, but New Yorkers weren’t thrilled about being in the middle of the Great Recession. After all, as the financial capital of America, when people got angry at big banks, they immediately got angry at New York.
Couple that with a state unemployment rate close to 9% at the height of the recession, a housing market that people were calling “soft” (a term New Yorkers absolutely hate!) and you had a recipe for some very depressed people!
So, what’s the deal now?
New York City saw a surge of sales right at the end of 2012 – but that was partially due to tax changes that took effect at the beginning of 2013. Even realtors in New York City admit that many of those sales normally would have been spread out over a few months, had the tax laws not been changing. So, it’s not entirely fair to say that the Big Apple is going to experience a surge throughout 2013.
So, what will this state see?
Expect to see some higher demand for homes for sale in New York simply because more people are getting back to work. According to the December 2012 jobs report, New York’s state unemployment rate is 8.3%, compared to 8.7% in November. In New York City, the rate is slightly higher at 8.8%. However, that’s better than it was in November, when it was 9.2%.
Even before the unemployment numbers were released, realtors in New York were reporting bidding wars. In fact, during the 4th quarter of 2012, apartments in New York spent 7% less time on the market than they did the year before. And, realtors in New York say that 96% of sellers received their full asking price.
Part of that, though, is due to the fact that New York saw its lowest number of homes for sale in over a decade. But as news of successful sales spreads, it will lead to more homes being put up for sale all over New York – which will get the housing gears turning even more.
Until the inventory increases, though, expect to see housing prices continue to go up.
And, this cycle isn’t just limited to New York City. The same story can be told upstate, as well. In Albany, for example, median sales prices increased 5% between November 2011 and November 2012. In Saratoga, the increase was 9%.
So, what if you can’t afford to buy just yet?
If you’re looking for apartments to rent in New York City, be prepared to spend an arm and a leg! Like many other areas of the country, landlords decided to profit from fears over the housing market. Considering how expensive New York rent was before, you can imagine how much apartments cost now! Manhattan hit an all-time rent high in 2012 – with the average apartment costing nearly $3,500 per month.