New analysis shows Manhattan real estate prices may be undervalued

Research by Business360 of Manhattan real estate prices suggests todays market still has room to rise. Using co-op and condo price data back to 1979, Business360s analysis captures a 25 year view and shows todays valuations to be at the low end of historical norms. The research company projects continued price gains

(PRWEB) September 24, 2004 -- New economic analysis by Business360 concludes that residential real estate prices in Manhattan are not overvalued. Manhattan -- one of the nations so called real estate "hot spots" -- is often seen as extraordinarily overvalued. But analysis of real estate prices on a square foot basis from 2004 back to 1979 shows otherwise. This analysis is a unique insight into valuations in this market.

Using real estate data from Miller Samuel, New Yorks leading authority on its real estate values, along with economic data on personal income and interest rates, Business360 examined the market on a range of core metrics including price to personal income and affordability. The research company concludes that the Manhattan mass-market is not overvalued and that valuations today are at the low end of historical norms.

However, restricting assessment to just seven years or so does give the impression of an overheated market. Over this reduced period, real estate prices have risen rapidly and substantially outstripped personal income gains. It is this period that is most commonly reviewed and captures headlines.

But over a period of two decades a very different picture emerges. Since the early 1980s, Manhattan real estate prices have lagged personal income gains. Had real estate prices kept pace with personal income increases, real estate prices would be over double current levels. Further, the decline in interest rates over this period now makes real estate much more affordable.

In broad terms, while real estate was relatively cheaper in the 1990s, it was much more costly throughout the 1980s.

Business360 previously assessed the Manhattan residential real estate market in August 2002 and forecast five year growth of between 8% and 15% annually; in 2003 prices rose 11%, and to date in 2004 they are up 15%. Following its latest assessment, the company expects continued price strength.

Copies of the 40-page report are available for $299. Contact re@business360.com or (212) 866 4680.

About Business360 Inc.

Business360 conducts research and analysis across a range of sectors for top tier companies and organizations. Clients include Fortune-class corporations, top investment banks and consulting firms, business advisory and audit companies and many advertising agencies; we also work with smaller companies, business writers and independent consultants.

Further details are available at www.business360.com, or from John Marchant (+1 212 866 4680, john.marchant@business360.com) or Roger Sharp (+44 8703 505 360, roger.sharp@business360.com).

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