Here’s a my take:
Macro (for Context)
-Credit remains historically tight.
-Inventory remains tight – a national phenomenon.
-It has been reported that NYC has regained all jobs lost during the recession – the US has regained only about 40%.
-Foreign buyers continue to create demand at elevated levels – Manhattan seen as a “global safe haven for real estate” during this era of economic instability.
-Manhattan remains one of the best housing markets in the US.
-Housing prices continues to remain stable – 2 of 3 indicators show small YOY declines due to strength in entry-level sales.
-Listing inventory fell 13.5% from last year – low inventory will be one of the biggest challenges facing the market over the next year. Although sales continue to be strong, working off excess inventory, low levels are also occurring because some sellers don’t have enough equity to trade up, even if they are not underwater.
-Sales the same as last year but co-ops and condos behaved very differently. Coops up 10.9% (jump in entry-level sales, first time buyers. Condos slipped 11.8% largely due to decline in supply. Condo inventory down 36% in two years.
-3rd consecutive quarter with the market share of entry-level (studio and 1-bedroom) sales above 50% of all Manhattan sales. Sharp drop in mortgage rates and rising rents keeps market share high.
-Luxury market prices continue to bounce up and down each quarter but at a high level, but inventory down 8.2% year over year.
-New development market share holds steady at 16.4% – been in the 14% to 21% range for since late 2009.
Here’s an excerpt from the report:
…For the past several years and through the second quarter, the overall Manhattan housing market has shown price and sales stability, holding its position as one of the better performing housing markets in the US. The combination of mortgage rates declining to record lows and rents rising as a result of tight credit and rising employment has fueled a surge in entry-level buyers over the past nine months. The market share for new development activity has remained consistent, as much of the former shadow inventory created during the recent housing boom has been absorbed. Economic uncertainty abroad and the weak US dollar brought more foreign buyers looking for an investment safe haven, resulting in a higher frequency of high-end “trophy” transactions…
Here’s the press coverage for the report today.