Change in our local residential real estate market, and for that matter in life, is a given and our only constant. For every up, there comes a down, and for every step forward, there’s a step or two back. Life has its turns, and real estate has its cycles.
Talk continues about a possible bubble in real estate. In the last year, prices have jumped as much as 30-40%, and the pace of trading has been frenetic. In the months and year ahead, however, a return to more balanced activity with modest price appreciation is welcomed.
Inventory has been shrinking steadily. But with new construction and new conversions in the works, more than 25,000 apartments are scheduled to come into the marketplace in the next 18 months. For certain, the market will be impacted. Will the “if-you-build-it, they-will-come” mentality continue? Undoubtedly, some developments will be more secure in their locations than others, like The Plaza, The Stanhope and The Mayflower Hotels.
It’s tough to ignore the economists and real estate pundits who see in the current marketplace signs of ebbing exuberance and cooling ardor. Professional brokers will agree that the frenzy of last spring is gone, and that is a good thing, they add. But are we headed for a freefall? Are we in the midst of a real estate bubble that’s about to burst? No, and no.