Halstead Property

Gregory J. Heym
Executive Vice President, Chief Economist
(212) 546-1069

Housing Bubble's End New Home Sales Tumble But Analyst Says NYC's Solid

Tight Supply of Apartments Keeps Prices High as Number of Million Dollar Homes Skyrocket

Sep 27, 2005 3:36 pm US/Eastern

NEW YORK (CBS/AP) Is

the housing bubble about to burst? The government is reporting a sharp

decline in new home sales in August to a seasonably adjusted rate of

more than 1.2 million units. The 9.9 percent drop is more dramatic than

expected, coming after three straight monthly increases.

The new

home sales report stands in sharp contrast to yesterday's reading on

sales of previously-owned homes. The National Association of Realtors

told of a two percent increase last month to the second-highest level

on record.

"The economic indicators we see in the city are very positive," said Gregory Heym, chief economist for Terra Holdings, an owner of real estate brokerages.

"The

other thing that could cause a downturn would be an oversupply of

apartments, and that is something we just do not have, particularly in

Manhattan," he told WCBS 880's Ginny Kosola.

Heym also touched

on other factors affecting the local real-estate market, including the

relatively small number of properties being financed by interest-only

loans and the possibility of further increases.

Tuesday, September 27, 2005