Sky fall? My perspective on the 2018 Manhattan residential market
I am an optimist by nature. Being a student of economics in my younger days, I have always factored statistics and their influence on market forces into my optimistic views; hence, when some forecast doom and gloom in the Manhattan real estate market, I always turn to statistical data for a clearer picture as statistics do not lie, they merely state the facts.
Statics show that 2017 was a stellar year for the U.S. economy. Quarterly data released reveal that GDP increased at an annual rate of 3.1 percent in the second quarter of 2017 and by 3.2 percent in the third quarter of 2017. They also show we are number one in the world in terms of GDP growth followed by China, Japan and Germany, a country viewed as the economic engine of the European Union. The facts show the stock market is at all-time high. If we work to find something to concern us in all of this positive economic data it would be actually be that the news is in some ways too good and perhaps the market is a little overheated. Now let’s compare this bullish growth to the Manhattan housing market, which the statistics show has been undervalued in 2017 in spite of inventory in most categories actually being below equilibrium levels. Why then are people passing up bricks and mortar investment for the more speculative potential gains of the stock market?
The answer is that many folks believe that homes in most segments of the market in Manhattan are over-priced. That matter of opinion seems to be the prevailing one at the moment and time alone will show us the true value of properties in Manhattan. The one fact we should not forget is that the supply chain is relatively finite on this small island and history has proven we live on one of the most desirable places to call home on planet earth. By the time the news media gets wind of an upswing in the market the best deals are long gone. I believe in bricks and mortar more than markets that are “influenced” by many forces and today’s powerful large hedge funds. My advice to anyone wondering if now is the time to buy is ask yourself, do you want to be the first to catch the wave, or still be sitting on the shore when it washes in.