The New York City real estate market is in the midst of a record-breaking bull market.
The average price of a single-family home increased 10.3% in the first nine months of 2017, according to the National Association of Realtors.
That’s up from 9.7% in April and 8.9% in March, and it’s the most significant price jump in nearly two decades.
The New York metropolitan area had the second-highest increase in single-home prices (6.4% in June) after New Orleans, according to Realtor.com.
There are more than 11,000 homes on the market in Manhattan, Brooklyn, Queens, and Staten Island, and a record number of new homes are under construction in New York’s suburban neighborhoods.
In the past, the market has been fueled by the financial crisis and the rise in home values that followed.
But there are signs that prices have begun to rise again, as investors look for a return on their investment.
According to a recent report by the real estate firm CBRE, the market for single-detached homes in Manhattan has rebounded in the past two months.
A typical new home sold for $4,818,500 in May, up 9.5% from a year earlier.
“While the market continues to be a little less saturated than a year ago, the housing recovery has begun to show signs of life,” CBRE said in its report.
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What you need to know about home ownership and financing Real estate professionals are concerned that the recent increase in prices could have more long-term implications for the economy.
“[Price increases] are creating more stress and stress in the real world,” says Joel Moulton, the president of CBRE Real Estate.
He adds that these new pressures are already starting to create more anxiety for investors and homeowners.
It’s possible that the increase in price could mean that the market is going to get more crowded, Moulston says.
For the first time in nearly 20 years, the number of homes under construction has more than doubled.
Newer construction is also prompting more people to sell.
Between the first and third quarters of 2017 , home sales were down 3.2%, according to Realtor.com, and the number of homes sold in Manhattan increased 4.6%.
While some economists say that these numbers are still relatively low compared to the last housing bust in 2007-2009, Moulston says that the stock price has been rising so fast in recent years that a big market crash is possible.
To put it in perspective, $1.1 trillion of the $2.7 trillion in new homes were built in 2017, according to the U.S. Census Bureau.
Realtor.org has a great breakdown of what is happening in the market.