Earlier this year we warned of the potential for residential units to fall sharply because there may have been overbuilding and a shortage of viable buyers. Because of this, buyers should be wary of posted home prices and should seek legal counsel to help negotiate fair prices. This was especially important given the potential for another housing bubble to burst.
But as it turns out, the New York City real estate market is not one of the markets that is expected to be primed for a bust. According to a realtor.com report, the housing market is arguably in the best shape it has been since the historic bust, and several factors contribute to it, including:
Lack of housing – One of the factors that contributed to the bust was the overabundance of new units. In terms of supply and demand, if there is too much of a supply, the value of the commodity may go down. That isn't the case in New York City. Instead developers appear to be struggling to keep up with growing demand.
Lack of qualified buyers – Before the previous bust, everyone could afford a home. When the teaser rates ran out, they could not afford the monthly payments, and the housing market suffered. This is not the case now, as only qualified borrowers with plenty to include on a down payment are buying homes.
Indeed, realtor.com identified several markets that are “overheating,” meaning that they are primed for significant adjustments, including San Francisco, Dallas, Charleston and Los Angeles. In the meantime, for prospective homebuyers in New York City, an experienced real estate attorney can help.