SOURCE: Neglia Appraisals, Inc.

April 10, 2007 07:50 ET

New York City Real Estate Bubble Is a Myth, According to Neglia Appraisals

Residential Properties Hold Their Value in 2006

NEW YORK, NY -- (MARKET WIRE) -- April 10, 2007 -- A new study of real estate trends compiled by Neglia Appraisals, Inc., www.NYRealEstateTrends.com revealed that values for most residential properties in New York City either maintained their value or increased in value in 2006, compared to 2005. Contrary to the opinions of many economists and real estate experts, the 2006 average sale price of single family houses in all boroughs actually showed a small increase over 2005 levels.

The Neglia study goes on to prove that the apparent bubble is no more than a small bump for most residential sectors, indicating a leveling off of prices; the real test will be the spring selling season which is now upon us.

For 2007, low mortgage rates will certainly help maintain real estate activity, and current trends indicate a resurgent co-op, condo, and rental market in Manhattan. This, in turn, may stimulate a "spillover" effect to the outer boroughs. In fact, there were significant increases in value for two and three family properties in the outer boroughs, with average appreciation between 8% and 19% from 2005 to 2006.

Fear of the "bubble" bursting may be fueled by sales statistics, which show that the overall sales volume of residential properties decreased in most (but not all) neighborhoods in 2006, and marketing time increased. This can create the false impression that values declined precipitously in the period analyzed, which is not statistically supported.

Neglia's opinion is that the markets were so accustomed to overwhelming demand, limited supply, and very short marketing time for the past four years, that this trend came to be expected as the norm for the industry. What has happened from early 2006 to the present is simply a return to (historic) normalcy in many areas: adequate supply, and typical marketing time of three to six months for most properties that are reasonably priced.

www.NYRealEstateTrends.com is the only site where changes in value for all neighborhoods in New York City are tracked. The analysis is based on all sales in public record, and it is the only reference guide that makes historical and current sale price information available at the click of a mouse. Try the "Data Search" tab, which not only gives percent change in values for all neighborhoods in New York City, it also shows average sale prices, sales volume, and historic highest and lowest sale price in any zip code in New York City.

www.NYRealEstateTrends.com is user friendly and is appropriate for industry professionals as well as anyone buying or marketing a house or condo in New York City. First time buyers will be delighted with the glossary, which includes easy-to-understand definitions of common terms used in real estate transactions.

ABOUT US

All information was compiled and analyzed by Domenick Neglia, President and CEO of Neglia Appraisals, Inc., a residential and commercial real estate valuation firm based in Brooklyn, New York. Contact Mr. Neglia at Dom@neglia.com for additional information.

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