Does increased residential activity mean the recession is over?

April 13, 2012 11:00AM

The number of people showing up to open houses has reached 2007 levels, and buyers are doing more than looking; they are buying, increasingly getting entangled in bidding wars, the New York Times said. It seems New York City is on the cusp of a true, unadulterated recovery from the 2008 economic crash.

“If you were not cognizant of the underlying state of the American economy and you lived in New York — in this bird cage we call home — you would think everything is just rosy,” Jeffrey Levine, chairman of Douglaston Development, told the Times.

Development has also seen a substantial uptick, the Times said. The number of building permits issued for new residential units in the five boroughs ballooned 800 percent in January and February of 2012 compared with the same period last year, from 52 new permits to 457, the Times said.

But not everyone is totally convinced. Jonathan Miller, president of market analytics firm Miller Samuel, said he thought the frothy market might be an anomaly. “Once we hit summer, we’re going to see a lot more distressed properties hitting the market,” he said. “Even though Manhattan is not a hotbed of foreclosure, the world around us will be, so there’ll be more negativity in the air.”

As The Real Deal has previously reported, the total sales volume for single-family homes in New York City in the fourth quarter of 2011 was down 15 percent quarter-over-quarter and 11 percent year-over-year. However, some segments of the market were unscathed by the relative dip, for instance, Manhattan co-ops with prices over $5 million increased by 23 percent last year, according to numbers from Stribling & Associates. [NYT]