The New York real estate market is very hot at the moment, and the demand for homes and apartments has sky-rocketed over the past several months. As a matter of fact, the demand has increased so much that many developers cannot keep up with it, and every property management company has noticed an increased work-flow as well. This is, however, a booming market and the statistics speak for themselves: a property spends approximately 46% less time on the market before it is sold, than it did a year ago, and the amount of properties available for sales has increased by approximately one fifth, year over year. That being said, here you will find a brief overview of some of the most important aspects that have led to New York’s booming real estate market:
1. The Economic Growth
The first and perhaps most important aspect that influences the real estate market, which has been like a roller-coaster over the past few years, is the economic growth. The more money people make, the more they are willing to spend on housing – in turn, this will result in an significant increase in the selling price of properties.
2. The Increased Mortgage Availability
This is not the only boom the New York real estate market faces – there was another one that lasted a decade, from 1996 to 2006. The history seems to be repeating itself, as an increased number of lenders are keen to ease the conditions that apply to mortgages, in order to convince as many people as possible to take one out. Moreover, the increased mortgage availability is also directly connected to the low deposits required by banks, as this also adds to the ease of getting a mortgage.
Things have changed as of 2007, when banks have started to apply strict rules and regulations in terms of mortgage, and this has automatically led to a reduction in the availability of mortgages, as well as a fall in the demand for long-term loans. Nonetheless, the mortgage industry seems to be back on track!
3. The Affordable Interest Rates
The interest rates take their toll on the cost of mortgage payments – high mortgage payments will lead to a lower demand for property, and will make renting a house far more appealing than buying one or building one from scratch. Nowadays, most banks offer long-term loans at highly affordable interest rates, thus making it easier for all those who want to buy a house to do so.
4. Rising Real Incomes For Those Who Work
Last, but not least, there has been recorded a rise in the incomes of those who work. The recession that ended recently was market by a period of economic collapse, unemployment, sky-high interest rates and harsh conditions that applied to loans and mortgages. Nonetheless, now that the economy is growing, so are people’s salaries – the more money they have, the more likely they are to invest in the property market and to buy themselves a house, as opposed to just renting one. This is precisely when the market booms occur.