New York City Real Estate Housing Bubble

When interviewed by NYCApartmentBlog.com, the Sy Institute of Economic Research on public policy and housing said that the fears of a NYC housing bubble have been over inflated. According to an informal study conducted by the three member think tank, the members agreed that the probability of a housing bubble is remote. They based their research on recent sales of existing homes, new construction, and economic data for NYC.

New data has shown that NYC is on a fast pace for economic development ahead of the rest of the country. This suggests that housing prices are in fact sustainable. Rental prices for apartments have also been on the rise in the last few months. Despite an increase of 10% in sale prices since the beginning of the year, demand for coops and condos have continued to be brisk.

When asked what prices will look like next year, the panel said, “It is doubtful that [real estate] prices will see a severe decline, there may be a short correction, but prices will continue to climb in the next few years, as the demand for housing increases from wealth and investment from around the world.” The declining dollar has also contributed to the rising costs of NYC housing. The stock market has also seen some of its best performance in the last two years.

Though it is doubtful that current owners are selling purely based on the speculation of a housing bubble in NYC, they can be rest assured that the price of real estate will not see a dramatic decline in the coming months. The media will likely continue following this story, thereby contributing more to the speculation, and making buyers more anxious. Buyers should always follow the advice of holding property for a minimum of 5 years to reduce market risks.

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