NYC home prices surpass pre-crisis peak, but savvy investors should have put their money elsewhere
Real estate is up 30% since the low in 2011, but the S&P is up 125% in that time
A decade later, New York City housing prices have surpassed the peak levels from before the financial crisis.
Sales prices for houses and apartments are 2 percent above the peak levels of November 2006, the Wall Street Journal reported, citing StreetEasy data. Prices are 28.5 percent higher than when the market bottomed in November 2011.
People who bought and sold a house or apartment after September 2008 scored gains of 33 percent, or 7.5 percent a year, the report said. Only have of those who bought in the two years before Lehman Brothers’ bankruptcy filing and sold later saw that kind of gain.
Despite the concentration of financial firms in the city, New York bounced back from the crash faster than other parts of the country — with the economy and employment growing at a faster pace. Manhattan, with many wealthy residents and international buyers, was less affected.
“The credit crisis that came along with the financial crisis definitely hit the other boroughs more than it hit Manhattan,” Grant Long, StreetEasy’s senior economist, told the Journal.
Though the city’s real estate market itself recovered well, investors could have seen much bigger gains had they put their money into the stock market. The S&P 500 index has risen 125 percent, far greater than the roughly 30 percent increase in housing prices in the city. [WSJ] — Meenal Vamburkar