Manhattan Housing Market Heats Up After Strong First Quarter

Manhattan’s residential market had a strong first quarter and observers are optimistic that the market will continue to improve.

During the first three months of 2010, total unit sales were nearly double what they were in 2009. The first quarter saw 2,34 units sold which was actually a slight decline from the unusually strong fourth quarter of 2009. The three major real estate companies that track sales showed modest price increases but median sale values are still down 10 percent from one year ago.

Some of the factors believed to be driving the recovery include stock market performance and the fact that 30-year mortgage rates have been hovering around 5 percent. In addition the new home buyer tax credit and stable employment numbers have brought buyers spurred by opportunity and confidence. The improving outlook for the residential market could even benefit Manhattan’s office market as the improving financial situation and fewer job losses could serve to stabilize that market.

The sales data is welcome news for agents and economists alike who have been trying to figure out the markets direction. However the market has one major problem which could limit the recovery.

Many agents feel that properties continue to be overpriced and the problem could become worse depending on how well the market recovers. One agent recently remarked that up to two-thirds of listings are overpriced which means that the number of listings realistically for sale is much smaller.

Regardless many analysts believe the Manhattan market is beginning a long recovery but it will still take a while before prices reach their pre-recession levels.

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