New York, NY – Housing Crisis Not Affecting the City as Badly

New York, NY – While existing home sales fell 27% and new home sales fell an unexpected 12.4% in July nationwide, New York City’s housing market isn’t all doom and gloom.

“We were the last to fall into the recession and we are the first to come out of it, ” said Halstead’s Chief Economist Greg Heym.  “And from an economic standpoint, the housing situation in New York City continues to be better than the nation.”

The Commerce Department reported the dismal new home sales numbers this morning, which were the lowest since 1963. The report came hot on the heels of the National Association of Realtors announcement Monday that existing home sales dropped to the lowest point in 15 years.

But experts say there’s a stark contrast between the Big Apple and the rest of the nation, which can be attributed to a set of unique economic advantages, with Manhattan fairing better than the boroughs.

The biggest advantage: better unemployment rate.

“New York City’s unemployment rate in July has fallen, and it’s fallen every month this year so far. It’s lower than the national rate,” Heym said.

Jonathan Miller, CEO of metro-area real estate appraisal firm Miller Samuels, agrees the fall in unemployment has in turn helped the housing market.

“Also, our close linkage to foreign markets has set us apart from the rest of the country,” he added.

Taking a closer at the metro area, the outer-boroughs have struggled with home foreclosures,  while Manhattan has seen comparatively fewer, according to Heym.

“Manhattan sales activity is up sharply from a year ago, and home prices are up from where they were a year ago,” said Heym, adding that Brooklyn has seen an improvement over the last year as well.

Recent sales in the city in the high-end sector have increased with bids and signed contracts on multi-million dollar townhouses experiencing high activity. Even at the lower end of the spectrum, sales in the $450,000 range are also picking up as red-hot neighborhoods such as Williamsburg, Central Harlem and Long Island City do not seem to be slowing down.

Nationally, the low numbers were largely expected by experts, as they reflect the market after the expiration of the home buyers tax credit in April.

“Simply, you had this tax credit that was stimulating the economy,” said Miller. “Then you take that stimulus away and this is what happens, buyers lose incentive.”