One of the strongest signs of an improving economy is a healthy real estate market, which is why news that homeownership ticked up slightly during the last quarter of 2015 (per the Wall Street Journal) was welcome. By the end of last year, the homeownership rate across the country was 63.8 percent, which, in case you're wondering, is still way higher than New York City's.
In fact, while the exact numbers fluctuate, homeownership rates in NYC hover around 25 percent, according to Jonathan Miller, author of the Douglas Elliman market reports. (And co-ops account for about 75 percent of those apartments.)
"NYC is not alone," says Miller. "All of the more expensive cities have higher rentals numbers than sales; it’s the opposite of the suburbs."
The Journal reports that the slight increase in home ownership across the country at the end of 2015 could be credited to the fact that "some of the 9 million owners who lost their homes to foreclosure, short sale or another distressed event could finally be returning to the market."
But New York has always been in a relative bubble; because of co-ops' tough buying standards, foreclosures weren't as widely seen in NYC as the rest of the country. That said, according to Miller's most recent Manhattan sales report, sales declined 5.8 percent overall in 2015, marking the second consecutive year of declines (the total number was 11,953 in 2015, down from 12,695 in 2014 and 12,735 in 2013). A lot of that has to do with tight credit and low inventory, he says. Also, prices are high, breaking records across the board, which keeps people renting for longer than they might have hoped.
And Julie Teitel, a senior loan officer at Everbank says she found business slowing down in November. "The mortgage market follows the sub-prime mortgages market, and that's iffy at the moment," she says. Teitel also points out that the rest of the country tends to follow New York, but is often a couple of months behind.
But, according to CityRealty's monthly report, in the four weeks leading up to January 1, the number of recorded sales rose to 1,020 from 862 in the previous month. Compare that to 2014 when in this period, the city had 950 sales. (Of course, closings happen after mortgage applications,so those numbers may reflect apartments that went into contract in the fall).
And Robbie Gendels of National Cooperative Bank (full disclosure, a Brick sponsor) is hopeful for the future, saying she's seen an increase in new purchase volume this year, especially new purchases in co-op buildings with less than 51 percent owner occupancy. At least part of the reason? "Rates are still very good," she says. (About 3.875 on a 30-year-fixed mortgage, in case you're wondering.)