While most of the country is seeing housing prices fall, Los Angeles continues to see prices very modestly increase, and at a much smaller rate than before. And New York City also saw a considerable drop in the rate of residential real estate appreciation last year, though prices still increased by 6%.
But this year.... now that's a co-op of a different color:
February 19, 2007
Housing Market Heats Up Again in New York City
By TRACIE ROZHON
Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.
Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.
A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.
Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.
Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”
So what does this mean for Los Angeles - and Downtown in particular? It's hard to say. There is no direct correlation between prices in the two cities, though few major cities are more tied together in their economies and in their populations. But there is one major difference between LA and New York that is only getting greater and which none of our leaders are even interested in admitting exists, much less deal with:
Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.
He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.
Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.
“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”
So while LA has lost every major bank headquarters, lost its stock exchange to San Francisco, no longer has even a tiny futures exchange, has lost most of its major insurance companies, lost the headquarters of almost every major savings and loan (an industry that was one largely headquartered in LA) - and isn't in the running when it comes to being a center for hedge funds - no one at City Hall or at the Chamber of Commerce seems to have noticed, much less tried to rebuild LA's financial industries. Meanwhile, while LA's leadership has slept, even a town like Charlotte, North Carolina has become a major banking center.