New home sales jumped in 2016
The sale of new homes in 2016 rose 12.2 per cent, the highest annual rate since 2007, the HUD and US Census Bureau’s latest data reveals.
Sales were down more than 10 per cent in December at a seasonally adjusted annual rate of 536,000 units but the overall sentiment for the sale of new homes remains high among builders.
“We are encouraged by the growth in the housing sector last year, and by the fact that builders increased inventory by 10 per cent in anticipation of future business,” said Robert Dietz, chief economist of the National Association of Home Builders (NAHB). “NAHB’s forecast calls for continued upward momentum this year, with housing starts expected to rise 10 percent over the course of 2017.”
NAHB chairman Granger McDonald that builders need to price their homes competitively this year given the expected rise in mortgage rates.
Manhattan prices up less than 1 per cent in fourth quarter
Home prices in Manhattan eased towards the end of 2016 with the median resale price of $983,205 indicating a rise of just 0.7 per cent from the same period of 2015.
It was the slowest pace of growth since the fourth quarter of 2010, the StreetEasy report shows. Pending sales were down 3.7 per cent and almost 40 per cent of sellers cut prices.
"Manhattan's housing market over the past few years has been at the mercy of climbing luxury prices," said StreetEasy economist Krishna Rao. "Now, stagnating price growth is spreading from the top end of the market to the middle, while demand for lower-priced homes increases."
Rao says that 2017 is expected to bring increased competition in relatively affordable areas and more price cuts for the luxury sector.
Brooklyn saw prices rise 3.8 per cent year-over-year in the fourth quarter to $560,493. However, North Brooklyn saw prices decrease by 2.9 per cent and 41.1 per cent of sellers cut prices.
"Brooklyn is synonymous with what's considered cool in New York City real estate, but that cool-factor could be reaching a peak," said Rao. "Price growth is slowing, with prices even falling in North Brooklyn last quarter. This could be due to L train fears, or simply buyer fatigue in the face of Williamsburg's luxury prices."
Construction starts up 9 per cent
Construction starts for new homes rose 9 per cent in December with an annual rate of $306.9 billion, as multifamily showed particular strength.
The Dodge Data and Analytics report reveals that multifamily starts rebounded from a weak November with a 26 per cent rise led by some high-end constructions such as Chicago’s $275 million Ancora Apartment Tower and a $260 million condo tower in Minneapolis.
Single-family construction starts edged up 4 per cent in December compared to the same month of 2015.