It is worth looking at the New York real estate market statistics first. In January 2013, the average price per square foot in the city is $1,339. The average listing price for homes is $2,316,317. There has been an increase in the price of some 10.6 per cent from the same period last year. The increase in the number of sales from December 2011 to December 2012 was 40.3 per cent.
The statistics reveal that the New York real estate market is experiencing a recovery with more homes being sold and the prices going up. However, the sales and prices do not reveal the whole picture. It is the demand and supply that play a major role in the market. There are other factors that buyers and sellers need to consider as well.
Experts agree that the increase in the New York real estate prices is primarily due to the fairly small inventory which is projected to shrink. The number of new developments in the city has dropped substantially since the recent market plunge. At the same time, fewer properties are listed because sellers are not happy with the current market prices, which remain fairly low, and prefer to wait for better times.
Hurricane Sandy is expected to have long-term consequences on the market inventory. It has destroyed or significantly damaged many properties. Many neighborhoods have been severely affected and their attractiveness has diminished considerably as a result.
The demand in the New York real estate market has not increased considerably over the past year despite the commotion in the summer of 2012. The predictions for 2013 are not particularly optimistic either. This is mainly because of the growing costs which owners of properties in the city have to incur.
The real estate taxes are projected to grow. This will be the case even for new buildings and ones which have been improved to be more energy efficient and environmentally friendly. The property insurance premiums in the city are expected to increase as well. The growing costs will have a negative impact on home buyers and on investors. The increasing cost of mortgages will affect market demand adversely as well.
The predictions for the New York real estate market in 2013 are not particularly bright but this does not mean that the situation is desperate. New construction developments are in the way and more neighborhoods which were previously ignored by buyers such as Harlem are now gaining popularity.