During the past calendar year, there has been a large increase in the sale of homes in the City of New York. During the third quarter of the 2011 calendar year, the average sale price for properties in the five boroughs increased from $780,000 to $786,000. There were approximately 11,000 properties exchanging hands during this period which is a 6% increase from 2010.
City Housing Market Improves
The price of homes in the City of New York, especially in the boroughs of Brooklyn and Queens, have reached the highest levels since 2007. This is according to Stephen Spinola, the president of the Real Estate Board. He also stated “the slow and steady consistent improvement in the market continues to provide strong evidence that New York City residential sales market has made it out of the woods and should only continue to improve.”
During the foreclosure crisis the average price for the sale of a single family home in the City of New York was approximately $669,000.
Manhattan Has the Highest Sales Prices
Manhattan once again was the borough with the highest average price for condo’s, co-op’s and apartments. The average price was $1.37 million. There has been a significant influx of foreign investors to the Manhattan real estate market according to Seth Hirschhorn, a senior managing director of the real estate group Citi Habitat. Foreign investment has been one of the driving forces in the real estate market in Manhattan.
Home prices in both Brooklyn and Queens are now above the 2007 recession levels. The average sale price of a home in Queen’s county was $411,000 while the average price home in Kings County in the third quarter was $619,000.
Foreclosure Rates Continued to Fall
During the month of September 2012, foreclosure rates on a nationwide basis fell to a five year low. There was a 7% decline in default notices, scheduled auctions and bank repossessions of foreclosed properties from August of 2012.
Manage the Flow of Foreclosures Coming to Market
There are still many homes in foreclosure today. However, the banks have taken the position that they do not wish to flood the market with foreclosed homes. Therefore, they are managing the flow of homes into the foreclosure process to keep it at a steady pace and not further upset the delicate housing market.
Home Affordable Mortgage Program (HAMP)
There are approximately a million mortgages modified by financial institutions under the Home Affordable Mortgage Program (HAMP). In each of these cases, a home was saved from going into foreclosure. Banks are taking a much more aggressive approach to prevent their borrowers from falling into foreclosure. They are agreeing to short sales in many situations because they actually lose less money through a short sale than through a foreclosure.
Record Low Mortgage Rates
The record low mortgage rates have also had an impact on the housing market. Homeowners with good credit have been able to refinance their mortgages to lower rates. This has kept them out of foreclosure situations.
Conclusion
As the economy in the United States seems to be limping along, so is the housing market. Although foreclosure rates are down and home sales are up, supply and demand are still not at equilibrium. There are still too many homes on the market. In areas such as Nassau and Suffolk County on Long Island, the flood of homes on the market still acts to depress the real estate market for single family homes.
