Last week here we highlighted an article from Crain’s that pondered whether or not we are in the midst of a seller’s market on account of rising prices and diminishing inventories.
However, on Friday, April 1st, the New York Times published what at first pass appeared to be an April Fool’s Day joke. The headline: After Months of Growth, Signs of Weakness in the Manhattan Real Estate Market.
The problem? The full article does not mirror the headline and therefore clouds the waters for consumers.
For example, a client of mine has been looking for an apartment for months but hasn’t been able to pull the trigger. There are many buyers who are fearful of their home losing value instead of increasing or maintaining. In this particular client’s case he seized upon a headline in friday’s NY Times and sent it to me with a cautionary question.
If you read the full article its dead on right and the last five paragraphs tell the full story:
Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of Elliman’s report, offered a reason why prices had come down and said that the mix of what had sold in 2011 suggested that prices were essentially flat. While higher-priced condos accounted for more of the properties sold last year, he said, the number of co-ops sold went up significantly this year, and because co-ops tend to be priced lower than condos, that trend pulled average and median prices down.
“Condo sales were down only because inventory is down, but co-ops showed a burst in activity,” Mr. Miller said. “If you put that all together with the fact that last year’s bump was somewhat artificial, you see that the market today is weak, but essentially stable.”
Diane M. Ramirez, president of Halstead Property, also dismissed the notion of the market’s taking a double dip. “When you’re comparing 2010 to 2011, you have to remember that we had a very unusual volume of business last year,” she said, noting that in addition to the tax credit, there was enormous pent-up demand after a very tentative market in 2009. “And now, we’re kind of back into a healthy and normal cycle.”
She said that Halstead agents were already seeing signs of a typical spring bounce. “Showings are up, open houses are busy and offers are coming in at all price points,” she said.
But Dottie Herman, chief executive of Prudential Douglas Elliman, sounded a cautionary note. The continued difficulty that buyers face when trying to get a mortgage may still hamper the market, she said. “For the market to be really healthy again,” she said, “you have to fix the financing piece, and that’s still up in the air.”
As long as the media continues to base its reporting on sensationalism it will continue to hamper growth and economic recovery. There are no doubt still hurdles as the market recovers, however, titles that present inaccurate conclusions based on the data detailed in the same article border on the irresponsible.