La Maison
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When Sales Drop, What Happens Next?
A look into how the recent decline of Manhattan real estate could affect you and the market.
By Aphrodite Takos
Earlier this year, CNBC reported that Manhattan apartment sales fell 19% compared to sales in 2015. Though it was originally thought to be a result of lower spending from wealthy U.S. and international individuals, it is now thought to show a chink in the real estate armor. What lies below the superficial causes of the drop may actually affect the market in the long run.
While the reports focused on the drop in sales of the Manhattan market, it was noted that a decline was seen throughout markets in the U.S, including areas ranging from Aspen to the Hamptons. Jonathan Miller, CEO of Miller Samuel Real Estate, says that the decline in sales will cause for a “more sustainable” market in the long run, but some don't believe that to be true.
Analysts believe the real estate drop shows that the underlying system may be weaker than previously thought. This could affect more than just apartment buyers and agents, a collapse of the system would affect everyone (think about the 2008 housing market burst.) The need to educate and prepare for the future is important.
Finding the cause of the decline is easy and explains the decline in the housing market in general. U.S. buyers are reluctant to spend in such tumultuous political climates (i.e. the Presidential election) and the ever unsteady stock market. The investment in property at this time could be favorable, but the chances are too foggy to make an educated and well thought out decision.
Photo courtesy of Jörg Dickmann