Supply and Demand Still Rules the Market

Oct. 31, 2011 - PRLog -- There was a recent article in the Real Deal magazine that there are only 1,903 new condominium units in the pipeline for New York City so far in 2011.  This is compared to 23,879 in 2006.  There are many reasons to explain this but the fact remains that there is a consistent global demand that is increasing for New York City housing.  A recent Cushman &Wakefield Inc. report indicated that NYC overtook London as the top destination for real estate investment.

Once people decide that the demand is sufficient to merit new projects new units are not instantly generated.  There are many obstacles to construction and renovation in New York. This will put tremendous upward pressure on pricing for any units that are hitting the market.   From a global perspective Manhattan homes (averaging $1,068 per square foot) seem inexpensive compared to Paris (averaging $3,287 per square foot) according to a Credit Sesame report.

There is still considerable uncertainty regarding the economic recovery process.  This is providing investment certainty that well located brick and mortar is both safe and has built in upside.  Whatever can be purchased today and held will prove this as limited supply will continue to push values.