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New York City Feels Affects of Housing Weakness August 3, 2009

Posted by John Watch in AccuriZ News, AccuriZ Reports.
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Real Estate is like a set of Russian Nesting Dolls.  Analysts tend to focus on the entire market, with minimal effort given to the underlying components.  Examination of  various  market segments can indicate a different pattern as recent sales activity in New York City is showing. (Northeastern Queen Report)

According to public records, the overall decline in values in the city is roughly 10%, but what is alarming is the number of sales transactions has declined significantly since the peak of 2004.  With fewer than 5,000 sales for the first six months for Class I properties (excluding condominiums), the annualized rate of sales is projected to be below 15,000 units.  This represents a 65% drop in sales which is impacting the value of home sales. (See Square Footage and Median Price Differentials for more information).

Simply stated, only those individuals who must sale are selling.  Over the 5,000 sales recorded through June 30, 2009 over 25% are distressed sales.

There is a silver lining to all of this:  many sales that occurred in April, May and June have yet to close.  As such, sales activity and values are projected to increase for the third quarter reporting period, based on property data.  Many of these sales should be not be distressed sales and will most likely benefit from lower financing conditions.  In addition, analysis of properties based on location within each Borough and Size of home indicates different buying patterns are emerging.

Compared to the National change in values, New York City has faired reasonably well, but the true measure of property value changes will not be able to be measured in a reasonable manner until the 2010 selling season of April to August.  Statistical analysis of 2009 will show corrections in certain neighborhoods and a return to more sustainable values in others.  With increases in population and limited building in 2008 and 2009, New York City is expected to recover ahead of the rest of the nation.

However, this all depends on the looming concerns for financing Commercial Properties in 2010 and 2011 as mortgages with five year adjustments begin to mature.

For more information regarding Real Estate Reports and detailed statistical analysis, CLICK HERE

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