LuxuryBlurb

Today, reports came out on home groundbreaking. (Am I the only one annoyed at how figures are constantly ‘revised’?) So December’s figures were slightly inaccurate….why? And why the month-by-month-drama-queen reporting? I am a firm believer in watching pricing on a month by month basis, but it ceases to amaze me how many people formulate world-shattering conclusions from these monthly stats.

Groundbreaking activity for new homes increased 2.8 percent to a seasonally adjusted annual rate of 591,000 units, reversing the prior month’s weather-induced drop, a report from the Commerce Department showed on Wednesday. Analysts had expected housing starts to rise to a 580,000-unit pace. December’s housing starts were revised upwards to 575,000 units from the previously reported 557,000. Compared to January last year, starts surged 21.1 percent, the largest increase since April 2004. “It’s a positive surprise on all fronts and shows that overall demand has moved higher. That’s an important element to watch as we move through a cycle going from incentive-based to more organic growth,” said Craig Peckham, equity trading strategist at Jefferies & Co in New York.

In a separate report, the Federal Reserve said U.S. industrial production rose 0.9 percent, with manufacturing, mining and utilities all posting gains. The housing market has been a particular area of concern after a series of disappointing reports on December home sales. Some economists worry that with the Fed — the U.S. central bank — and the Treasury ending purchases of mortgage-related securities in the coming weeks, mortgage interest rates will rise, putting additional pressure on the still weak market.

In housing, groundbreaking for single-family homes rose 1.5 percent last month to an annual rate of 484,000 units after falling 3 percent in December. Starts for the volatile multifamily segment increased 9.2 percent to a 107,000-unit annual pace after rising 12.6 percent in December.

The housing market, which is at the core of the most painful economic downturn since the Great Depression, is crawling out of a three-year slump, supported by government programs. New home construction contributed to economic growth in the third quarter of 2009 for the first time since 2005.

While this is all good national news, do these figure have any bearing on the Manhattan luxury real estate market? In my mind the only effect it could have is on manhattanites wealth creation and confidence-boosting: The New York luxury real estate market has very little, if anything, to do with HOUSING. What do you think?