Nationwide, more than 40 percent of homeowners with a mortgage are in a negative or near-negative equity position (less than 20 percent equity in the home), according to Zillow. Housing may be local, but this particular credit issue is national.

(Read more: NY’s Luxury Penthouse Shortage Pinches Prices)

Short supply pushed prices higher for Manhattan condominiums, but not for co-ops. Condominiums, which have a median price of $1.25 million, about twice that of co-ops, are being helped by foreign, all-cash buyers. International buyers tend to shy away from tough Manhattan co-op boards.

(Read More: Mortgage Rates Pressure Home Builders)

“Scarcity is an important issue, and when apartments are properly priced they are selling quickly. While there is great demand and small supply, buyers are reluctant to pay a price that is not justifiable,” said Hall. F. Willkie, president of Brown Harris Stevens Residential Sales in a release. “Job growth remains strong in the city as does interest from both domestic and international buyers; this bodes well for a healthy market.”

Sales began to pick up dramatically this year, as fears of the fiscal cliff abated and optimism returned to real estate. While limited inventory would appear to make this a seller’s market, agents say savvy buyers are the norm in Manhattan, and that has kept price increases in check. While home prices in the rest of the nation were up just over 12 percent in May from a year ago, according to a new report from CoreLogic, Manhattan prices in general are not rising that fast.

Prices for co-ops, which account for 75 percent of the Manhattan market, were flat in the second quarter of this year, while the median price for a condo was up 14 percent from a year ago, according to the Douglas Elliman report. Larger co-ops saw bigger price gains, but for condos the gains were in studio apartments. Sellers are getting 98 percent of asking price, according to another report from Halstead Property.

(Read More: Pending Home Sales Soar to 6-Year High)

Article source: http://www.cnbc.com/id/100860538

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken Loans.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918

(Read More: Beware the Escape Hatch in the New Mortgage Rules)

“Many homeowners may simply be deciding to play the market and wait for their home to appreciate before putting it up for sale. Despite the drop in applications, we have seen anecdotal evidence of homes selling very quickly after entering the market,” says Bob Walters, chief economist at Quicken.

Days on market are shrinking across the nation, but only because supplies are so low. It’s not just the former boom to bust to boom markets, like Phoenix and Las Vegas; local Realtor associations show inventories are down dramatically from a year ago in Charlotte (-29 percent), Dallas (-19 percent), Minneapolis (-32 percent), and Washington, DC (-36 percent) to name a few.

“The low and negative equity of a large number of mortgage holders has kept significant inventory off the market, and many would-be sellers with adequate equity feed into the problem by holding off until they find something to buy,” says Jonathan Miller of CEO of Miller Samuel Inc. “I believe the chronic low inventory phenomenon we are seeing has little to do with lack of consumer confidence and more to do with reasonable access to mortgage financing.”

President Obama echoed that sentiment in his State of the Union addressTuesday night.

“Overlapping regulations keep responsible young families from buying their first home,” Mr. Obama said. Not exactly a new sentiment, as the Chairman of the Federal Reserve, Ben Bernanke, has said the same thing several times, as have other federal regulators.

(Read More: Fewer Behind on Mortgages, but for How Long?)

Rising mortgage rates and tight credit standards keep first time-home buyers out, while falling inventories make it more difficult for existing home buyers to move up. The housing market is therefore still largely in the hands of all-cash investors, looking for distressed properties to buy and then rent out. Ironically, perhaps for now, more distressed properties coming to market will be what keeps home sales afloat.

Article source: http://www.cnbc.com/id/100456918

The median price in the luxury market, however, was $4,440,150, up 7 percent from a year ago, according to Douglas Elliman. The luxury market represents the upper 10 percent of all co-op and condo sales.

“The year-end jump in sales was a function of proactive tax management by property owners. Although it wasn’t clear what form the tax hikes related to housing would take, it was assumed that 2013 would be higher than 2012,” noted Jonathan Miller, CEO of Miller Samuel, which provides the Elliman report data. (Read More: Million Dollar Winter Wonderland Homes.)

Prices in Manhattan are still about 6 to 7 percent off their pre-recession highs, but low supply will likely narrow that gap in 2013. Strong demand from foreign, all-cash buyers is also boosting prices, especially in the condo market. Gains, however, may slip in the current quarter, as so much demand was pulled forward.

Article source: http://www.cnbc.com/id/100351956