Dreaming of your Manhattan home? You may want to spend a little more time dreaming as it's never been more expensive to buy a home in the area, CNN Money reports.
When the fourth quarter of 2015 struck, New York City median sale price for homes hit a record high of $1.5 million, based on the latest report of real estate appraisal firm Miller Samuel for Douglas Elliman Real Estate.
"It's unpleasant," reacts Miller Samuel president Jonathan Miller, who himself is a homebuyer in the city.
The newest numbers just broke the 2008 median sale price record that took place just before Lehman Brothers collapsed.
There is also a significant rise in average sale price and price per square foot at $1.95 million and $1,645, respectively.
Several factors are considered to have caused the high prices; there is the low inventory, the strict credit rules, and the stiffening competition.
"Inventory jumped from chronically low to very low and remains inadequate to meet demand," said Miller.
Homeowners are also not as confident in putting up the 'for sale sign' for fear of not being able to get a mortgage for a trade up or be able to find a new home. "Mortgage underwriting is about as tight as it was after Lehman; that isn't expected to change any time soon."
As you move down the housing chain - homes priced at $2 million or below - you will see the inventory going tighter.
"The lower half of the markets have very limited new developments," said Miller.
With the imbalance comes rise of bidding wars - low supply and high demand - and according to data, the number of sales that closed in the fourth quarter at or above asking price were at 47.9 percent.
While the stream of new developments will continue to flow into the market, they won't much help with the shooting prices since most of them fill the higher end of the market.
