If 2005 was the year of the bubble that wasn’t, how will this sixth year of the second millennium play out for buyers, sellers and brokers?
Last year, boom and bust stories about the real estate market dominated the press with dramatic headlines. For the most part, however, the reports were conflicting, and the media spin on medians and averages proved to be confusing ultimately for readers. There were contradictory interpretations of statistics as data was misread and facts were distorted—particularly in the year’s last quarter which saw a decided drop in the volume of sales, though not in the price of transactions.
As momentum continues in Manhattan’s real estate market, with record setting prices the focus of media and cocktail party attention, shouts about a possible bubble are turning to whispers. In 2004, prices across the nation rose faster than in any other year since the 1970’s. Despite disappointing employment and corporate numbers, declining consumer confidence, high oil prices, sagging U.S. and global stock, and worldwide uncertainties, prices in New York surged in a tight market amid heightened demand and frenzied activity. High incomes and low interest rates fueled ever-rising values. In nearly all segments of the real estate market, bidding wars drove prices up by leaps.
