Manhattan apartment rents are sizzling -- bad sign?
Some experts worry that this is just another indication that America's housing market is getting overheated again.
According to Bloomberg, apartment rents in Manhattan rose in March at their fastest rate in six months, climbing 6.7% to an average of $3,195 per month. People who want to become owners are having problems finding properties to buy as the number of apartments for sale in Manhattan plunged 34% in the first quarter, the biggest decline in the more than 12 years that records have been kept, the news service says. Rents in the neighboring borough of Brooklyn have surged 11%.
Housing outside the city that never sleeps is also rising at a torrid rate, with more than a trillion dollars added to the value of single-family homes nationwide. As the Washington Post noted, new housing units under construction is up 28%. The closely watched S&P Case-Shiller home price index, which tracks the 20 largest markets in the U.S., rose 8.1% in January, its biggest year-over-year gain since June 2006. New foreclosure filings in March fell 23% on a year-over-year basis in March, according to RealtyTrac.
All this has some experts, such as Edward Pinto of the American Enterprise Institute, wondering if the U.S. is in the midst of a new housing bubble. He recently argued in the The Wall Street Journal that the rise in housing is more the result of the Federal Reserve keeping interest rates at record lows than an improvement in the market's fundamentals. That won't last.
"Given the continued subpar economic recovery and our past experience with the disastrous impact of loose lending encouraged by federal policies," he wrote, "homeowners would best be cautious about spending their new found 'wealth.'" And good lucking finding an apartment in New York City.
Follow Jonathan Berr on Twitter @jdberr.
More on moneyNOW
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
- Dec gold rose for the first time in six sessions as it gained support from Janet Yellen's speech at the Jackson Hole Symposium. Ms. Yellen said the FOMC sees significant underutilization of labor resources and that the labor market has not fully recovered despite recent gains. The yellow metal advanced to a session high of $1282.80 per ounce and settled with a 0.4% gain at $1280.30 per ounce, booking a 2.0% loss for the week.
- Sep silver touched a session high ... More
More Market News
Investors need to rethink that often-repeated belief, because times have definitely changed.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'