Many realtors and home sellers gauge the volatility of the real estate market by the stability of industry drivers like Wall Street and the technology sector. However, these determining factors may not be as reliable as they once were. While investment and technology are booming this year, the real estate markets in metropolitan areas like New York and San Francisco remain unpredictable.
Wall Street bankers and traders recently earned record high bonuses since the Great Recession, taking home an average payout over $185,000 according to the New York State Comptroller. Although employees in this sector haven’t earned a bonus that significant since 2006, home sales in New York City's prime market saw a 15 percent decline
from last year. Year to date, Manhattan has 282 luxury homes under contract, compared to 330 from the previous year.
Although individuals in Manhattan’s investment market have seen an influx of cash, the drop in sales from last year attributes to multiple factors. Formidable weather conditions at the beginning of 2018, coupled with overall volatility of the stock market, have left lingering effects on Manhattan's luxury market.
And while Manhattan’s luxury home sales have dropped this year, those in Brooklyn are on the rise. Across the bridge, sales increased by 8% in markets where houses value at or above $2M, compared to this time last year.
As New York City experiences a decline in prime sales, the nation's tech hub flourishes. San Francisco continues to drive economic trends throughout the state. This year, industry executives are cashing out their stock options to invest in the luxury real estate market. Home sales valued at $3M or more are on the rise in the Bay Area
In spite of the volatility in the stock market and the devastating wildfires earlier this year, the purchase of luxury homes rose while other residential transactions saw a 15 percent decline
Through February of this year, home sales in the Bay Area doubled -- 126 luxury real estate transactions occurred during the first two months of the year in the eight counties within the Bay Area. Homes which sold for more than $3 million in San Francisco alone rose to 21 during the first two months of 2018, compared to 16 during the same time last year. And homes in the lower end of the luxury segment, priced from $1 to $3 million, also saw a boost in sales this year of around 40 percent.