There is a pretty strong likelihood that soon-to-be released second-quarter reports will show pretty strong sales in Manhattan along with prices that have more than held their own.
Indeed, the Wall Street Journal said yesterday that sales of Manhattan apartments were 80 percent higher than one year earlier during the second quarter. The pace was the fastest since the summer of 2008, an illustration that the market has been recovering during the spring selling season, according to writer Josh Barbanel.
He also quoted unnamed “analysts” as saying they expected to see that prices had risen a bit, too, when brokerage reports are released.
From what I have observed, however, the second-quarter surge occurred most during the first month and has faded as of now.
No one can say whether prices will slide again in the near or more distant future, though it is anecdotally evident that sales right now are sluggish over all. For example, although the New York Times chronicled growing interest in large so-called “family” apartments, a glut of studios and one-bedroom units persists.
For buyers, the current situation looks to me like good news for a number of reasons.
I don’t recall ever having said this before, but I’m inclined to believe that there has not been a more positive environment for buyers since the housing market began heating up years ago. What I perceive as stagnant sales is just one of eight convergences that contributes to my assessment. The others:
- Mortgage rates at an all-time low, substantially reducing monthly housing costs;
- A fragile consensus that the global economy may be headed toward recovery (with the notable exception of economist Paul Krugman, for one);
- Even with high unemployment continuing in the nation and city, no significant increase and an impact that probably has reached its maximum;
- My belief that individuals who worried about losing their jobs in the Big Apple are less concerned with the passage of time;
- A rebound, albeit relatively weak, in the stock market;
- Prices that appear to be reasonable in comparison with the halcyon days prior to the collapse of Lehman Brothers, even if it is possible that they will slip a bit more;
- Inventory that is creeping out of the shadows as sellers weary of waiting for higher prices.
I bounced these considerations off a knowledgeable gym buddy of mine, a long-time resident of a rent-stabilized apartment, and he frowned deeply in disagreement. His main point was that law firms and other high-paying concerns were contracting, hiring fewer youngish graduates and offering lower salaries than in the past. I’m sure that many others concur with him.
My counter contention is that he is right but that this segment of the market account for only a small portion of sales and now has a small impact on prices. In other words, the effects have been felt already.
I am the first person to admit that I easily could be wrong. As always, I counsel potential buyers to move forward only if doing so is a necessity or an irrepressible urge to change their lifestyle, not to make an investment.
That said, I still think this is could be a Bermuda high of continuing opportunity rather than a crisis that will sink us all.