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New York City's real estate market begins 2013 on the right foot

11 Feb 2013 3:42 PM
New York City's real estate market begins 2013 on the right foot

Rising demand for homes and an improving national economy helped make 2012 the second best year for the New York City real estate market since 2008. According to the New York Daily News, there were 39,381 transactions during the year, accounting for more than $30 billion. Both of these figures represented the second highest totals seen since the recession.

Positive factors
According to Mike Slattery, senior vice president for research for the Real Estate Board of New York (REBNY), the city's strengthening economy, lower national interest rates and rising rents helped make 2012 such a banner year. Another factor, according to the source, was likely the rush for sellers to close deals before the capital gains tax rate rose. Whatever the reasons, sales volume increased nearly a quarter in the last three months of 2012.

The average home price also rose to $775,000 in 2012's final quarter, a 12 percent year-over-year increase. This rise was likely spurred by renewed interest in luxury homes, as high-end buyers began feeling more confident about making large property investments, according to Zillow. 

Top of the market
The source reports that demand for homes toward the top of the market in Manhattan has been steadily rising in the last few years, with an especially notable flurry in the second half of 2012. Manhattan town houses and other valuable properties have started selling more quickly due to increased optimism among both domestic and international buyers.

Rising confidence
Unsurprisingly, this robust activity and strong demand has helped raise confidence levels among industry professionals. According to REBNY, New York City residential and commercial real estate broker confidence was at its highest level seen in the last eight months during January 2013. 

"This month's survey shows that the broker's overall confidence in the current market continues to improve," said Slattery. "These numbers are the highest we've seen over the last eight months that the survey has been conducted."

The Residential Real Estate Overall Confidence Index rose from 8.59 to 8.79 between December 2012 and January 2013.