February 3, 2008
New York Property Values on the Southbound Train
Has the Super-real estate market finally encountered economic kryptonite? Manhattan's housing market has seemed utterly impervious to any hint of real estate meltdown, even as other boroughs have suffered mortgage foreclosures at four times the national average. But one can't pass a Chase bank branch or a Duane Reade before coming across yet another building going up or being retro-fitted as luxury condos. The New York Times has an article today indicating that the gilded age of upper-crust real estate may be losing its luster.
It's not just Manhattan. It's the wealthier suburbs of Connecticut, New Jersey, and New York that are losing their shine. Economic experts say that recent indicators foretell a replay of the late-1980s real estate bubble bursting. In that case, people who bought right at the peak had to wait almost 15 years for the price of their homes to recover when including inflation.
Certainly, the closer one is to Manhattan, the more insulated the value of one's property to the downturn, but the effects of the subprime meltdown are starting to reach people other than the gullible who dove in over their heads with easy-term loans. This appears to be a bubble that will leaves few property owners untouched when it deflates.
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Whats bad for homeowners may be a boon for individuals looking to buy their first home. Lets hope those interest rates keep falling too.
It shouldn't come as a surprise that houses in the wealthy suburbs have are falling. Do you know what it costs to heat a McMansion in the winter?
Good.
(I say, because I rent.)
This still isn't saying its affecting Manhattan and the parts of Manhattan that the rents are having trouble with are where exactly? I also don't see how even if the bubble bursts it could ever be as bad as it was in the 80's. Manhattan in the 80's vs now is so completely different that that logic just doesn't make any sense. I say if you own below 1-- St in the city you probably still won't see any issues.