Despite an increasing number of sales on the top end of the luxury housing spectrum and a rumored $2 billion bid on a real estate website, housing has actually become a major impediment for the ongoing recovery of the U.S. economy.
Sales of new single-family homes tumbled 4.9 percent in the first six months of 2014, the New York Post reports, and the numbers were nearly twice as bad in June, when sales fell off more than 8 percent from the previous month. The lag is the result of Americans — particularly young ones — being scared off by the 2007 housing burst and still steering clear of home ownership, Jeffrey Gundlach of hedge fund Doubleline Capital told the Post.
The plethora of new construction in areas like the so-called “Billionaire’s Row” along 57th Street, home to Extell Development’s One57, has also had an impact on the 99 percent, tamping down demand among the mainstream. In the U.S., the price of a new home is nearly 18 percent higher than it was just a year ago, according to a recent report in the Wall Street Journal.
The full impact of the housing lull will come into clearer focus this week, according to the Post, when an initial spring GDP estimate is released. In the first quarter, the housing slowdown cut into domestic production, which shrank by 2.9 percent. [NYP] – Julie Strickland