The Real Deal New York

For effects of Wall Street layoffs on housing, look outside Manhattan

April 25, 2012 02:00PM

A new round of Wall Street layoffs is in the works next month, but that won’t necessarily impact Manhattan’s residential real estate market. Instead, according to Forbes, it will harm housing markets in nearby suburbs. In the last five years, Manhattan’s workforce has become more diversified and its real estate has become even more attractive to wealthy foreigners. Combined with the shortage of inventory many brokers are reporting, those factors leave the island less susceptible to fluctuations in Wall Street’s employment figures.

The same can’t be said for suburbs such as Greenwich, Conn., where first-quarter sales declined 31 percent annually for properties worth more than $2 million, acccording to Mark Pruner, a Prudential Connecticut Realty agent. “The recovering economy has given us a good real estate market if you are looking at houses under $2 million,” he said, “but over $2 million, which is primarily the area of the market fueled by Wall Street bonuses, sales are significantly down.”

Other areas, including Nassau and Westchester counties in New York, Bergen County in New Jersey and Fairfield County in Connecticut, are also feeling the negative affects of Wall Street firms’ struggling fortunes. In Westchester, for example, median sales prices of homes worth more than $2 million slipped 10 percent and fewer homes in the $5 million-and-up range were sold, according to Houlihan Lawrence. [Forbes]

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