Manhattan, a densely-populated borough in New York, belongs to the top 5 least affordable cities as stated by Realtor.com based on their First Mortgage Affordability report surveying 25 largest housing markets in the country.
With its 2014 mortgage-to-income ratio of 44.2 percent, New York landed as the fourth with the highest computed ratio. Even New York's rental market reflects how unaffordable it is to live in the city. As mentioned in AM NewYork, the average rent in New York eats up around 60 percent of an average citizen's income.
However, news surface that Manhatthan, NY real estate prices are going down and is most likely indicating a plateauing trend, reports The Real Deal.
"The market is downshifting to a more sustainable level of activity," said Jonathan Miller president of real estate appraisal firm Miller Samuel and the author of the Douglas Elliman report, notes the outlet.
According to Douglas Elliman, the median price of an apartment in Manhattan is $970,000, which is a little lower than last year's median price of $972,428. The average price last quarter is $1,732,989 showing a 2.3 percent drop from 2014's first quarter as reported in New York Mag.
Year-Over-Year Double-Digit Percent Decline
However, what is more notable about the findings, said Miller, who compiled the data, is that there's a year-over-year lowering values in sales for the previous 3 quarters, says New York Mag. It is a major concern because in The Real Deal article he said, that's the "third consecutive quarter that saw a double-digit decline."
Miller stated that transactions dropped by almost 20 percent from 2014 Q1's recorded 3,307 closing transactions to 2015 Q1 data of 2,661 closing transactions. There was also a drop of sales in the the new development market, from 2014 Q1 to this year's first quarter, showing a 16.8 percent decrease.
Miller informed The Real Deal that the recorded inventory has increased by 5.5 percent, with 5,243 units on the market which explains the price changes.
Surge May Be Over?
The appraiser explains to The New York Mag the findings saying, "In 2013 and the first half of 2104, we had this excess demand that began with Lehman and ended with the fiscal cliff of the end of 2012. We had unusually heavy sales volume. And now, it seems, that surge may be over."
Meanwhile, this first quarter's resale inventory rose by 0.8 percent but new development increased by 22.1 percent, and this relatively low values of resale inventory could still cause prices to hike, says Miller. "It keeps the pressure on prices for resales. We're either stuck in a high plateau or we're poised for more price growth," he told The Real Deal.
