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New York City home prices see significant improvement in May

2 Jul 2013 3:53 PM
New York City home prices see significant improvement in May

The Big Apple is often regarded as the epicenter of activity for the latest advancements in finance, fashion, art and entertainment, but its housing sector is also at the forefront of the nation's ongoing recovery. During the month of May, substantial monthly and yearly gains were seen in home prices for the metropolitan area, making conditions favorable for those looking to get involved in New York City real estate

CoreLogic announced in its Home Price Index for May that residential property values in the greater NYC area - including distressed single-family houses - exhibited a year-over-year increase of nearly 8 percent during the month. The uptick points toward significant improvement and may be indicative of the potential for additional gains to be observed in the coming months. The construction of upscale properties in many of the metropolitan area's highly sought-after locations could explain the significant boost seen in the city's housing market.

According to CNNMoney, most of the new homes being built are targeting the wealthiest 10 percent of urbanites. Additionally, a shortage of lower-priced residential units throughout the five boroughs has seen prices rise along with demand. As there are few opportunities for new development within NYC, many construction professionals are concentrating on updating existing properties, and creating a number of luxury homes. A new condominium project near Carnegie Hall in Midtown recently saw the sale of two penthouses - each between $90 million and $100 million. 

Similar bolstering seen across country
While the amounts themselves may differ, the burgeoning figures seen in the city's housing sector closely resemble the national numbers, and rightfully so, as it is the most populous metropolitan area in the U.S. CoreLogic reported that in May, home prices nationwide appreciated just over 12 percent annually, and nearly 3 percent month-over-month. These upticks represented the largest year-over-year gain recorded since February 2006 and marked the 15th consecutive month of growth.

Dr. Mark Fleming, chief economist for the online real estate analytics provider, said the latest developments are promising, and conditions could improve further in future months. 

"It's been more than seven years since the housing market last experienced the increases that we saw in May, with indications that the summer months will continue to see significant gains," said Fleming. "As we approach the half-way point of 2013, home prices continue to respond positively to the reductions in home inventory thus far."