NEW YORK (CBSNewYork) – We’ve heard the overall headline that home sales are the best in seven years. But we wanted to break down the trends for the New York City area.
Is there one part of our area that is the hottest right now?
“That is New York City, where home prices are rising at about a 10 percent clip” Jeffrey Otteau, President of the Otteau Valuation Group in East Brunswick, N.J., told WCBS 880’s Wayne Cabot.
He said that Manhattan and Brooklyn specifically were the hottest.
We keep hearing stories of people from Brooklyn who are having kids and moving their families out to places like Maplewood and Montclair in New Jersey.
“A big trend that we continue to see is that housing demand is pushing out along the train lines into the suburbs. Places in New Jersey that connect to Manhattan are certainly at the leading edge of what’s happening,” Otteau said.
Wednesday morning, the Wall Street Journal’s Joe Connolly reported on WCBS 880 that homes are really selling in areas where new jobs are.
“That’s true. A big change that we’ve seen is that we’re moving toward a European model for housing demand and the effect of that is that both jobs, income, and people are now congregating in job centers and, as a result of that, it is these inner rings markets that are outperforming all of the others,” Otteau said.
This doesn’t bode well for the McMansions in the outer rings.
“It doesn’t. The trend of a couple of decades ago, where companies were leaving New York City to move out into these corporate campus headquarter types of facilities has completely changed and, instead, what we see now is that job are coming back into the city centers,” he said.
When was the last time we saw such low supply and high demand?
“We’d have to go all the way back to 2004 and today there are actually fewer houses on the market now than there were back then during the housing bubble,” Otteau said. “The net effect of this is that homebuyers today feel a sense of urgency, meaning that they want to go ahead and buy before prices and interest rates go higher and that’s what’s driving today’s home price increases.”
Otteau also said that interest rates are headed lower right now due to what he said was a “lack of confidence in the pace of the larger economic recovery.”
So, he said the next month or two “will end up being a once in a generation opportunity to take advantage of both low prices and interest rates.”
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