As the US housing market slump widens, even residential areas east of Manhattan are now feeling the pain...
The US housing market slump is widening out. It seems that even New York is feeling the pinch as residential areas east of Manhattan are now suffering.
Home sales in Long Island and the Borough of Queens plunged by 25% in the fourth quarter of 2007, says a new survey from Miller Samuel Real Estate Appraisers. Compared with last year, the stock of unsold houses has piled up 41% and average values have fallen 3.2%.
The fourth consecutive quarterly price drop for these districts, this chimes more with the rest of the US than with Manhattan, where fourth quarter apartment costs still managed a 6.4% year-on-year lift.
The famous New York suburb Queens saw both the fastest annual rise (53%) in the number of unsold houses, now nearly tripled since the end of 2004, and the biggest average year-on-year value slide (5.2%).
Best performing local market in 2007's fourth quarter was Long Island's North Shore, also the most expensive area in Miller Samuel's report, where year-on-year prices were little changed, having previously declined for the five previous quarters.
Another North East is suffering...
Average values for existing US homes had sagged almost 9% up to November 2007 from a five-year high in July 2006, according to the National Association of Realtors, with sellers in the North East of the country having to trim their expectations more than most. Sales of previously owned homes slumped 13% in the region in November, the biggest dip across the nation.
Another similarity with the UK... at the luxury end of the market, defined as the top 10%, prices held up with a 1.6% rise, though volumes dropped 17%.
Meanwhile in Canada, up till now it's been a different story.
2007 wasn't all doom and gloom in North American housing.
Existing home sales exceeded $100bn for the first time in 2007, climbing 20% to $118bn, according to the Canadian Real Estate Association (CREA), as average values hit a record $326,055.
What's more, home prices gained 11% as almost 8% more units were sold in Canada last year compared with 2006.
Some of the country's strongest areas later in the year were Regina, Saskatoon and the province of Newfoundland and Labrador, where year-on-year transactions increased by 54%, 34% and 27% respectively.
Though overall, national sales topped out in the second quarter of 2007, slowing towards the end of the year as fewer deals were done in Calgary, Vancouver, Ottawa and Montreal, said CREA. Indeed, sales in Calgary waned 28% compared with last year.
And for 2008, the early signs are that a downturn, even if more muted than the States, is starting to kick in. Despite local optimism that the American experience won't be mirrored north of the border.
As I've said before, there are clear differences between our own housing market and the US. Or indeed Canada. UK prices may well not crash. But once property values start to slide, the decline can last not just for months, but for years.
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