Crystal ball warns of brutal year
January 20, 2009 10:45AM By Melissa Dehncke-McGill
From the January issue: If there is one glaring conclusion from 2008 that everyone can agree on, it's that making predictions about New York City real estate is often an exercise in futility. But with key facts at hand about construction financing, condo sales and office vacancies, everyone in the city's real estate community is preparing for a brutal 2009. In this month's Q & A, some of the biggest residential and commercial players tell The Real Deal what they fear and anticipate in the New Year. On the residential side, brokers say that developers who are 40 percent sold or less could have serious problems; that renovation and retrofitting will take on new significance as ground-up construction wanes; and that emerging areas like Bushwick will get hammered. On the commercial side, the consensus is that the already elevated vacancy rate will increase even more as planned financial industry consolidations take effect and office space is dumped. In addition, the distressed assets funds that spent the latter part of 2008 raising money will probably get their day in the sun in mid-2009, when prices start seeing even more significant drops. For more, we turn to our panel of experts.
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Comments
Anonymous
Time for everyone to acknowledge that Manhattan is going to get slammed, slammed to within an inch of its life. Prices will bottom out at 1995 levels. This is not a prediction. This is fact.
Comment #1 Posted By: Anonymous 01/20/09
Anonymous
Prices in Manhattan will bottom out at $500 a foot.
Comment #2 Posted By: Anonymous 01/20/09
Anonymous
Time for everyone to acknowledge that Manhattan is going to get slammed. I predict Manhattan RE will become totally worthless. Totally. They will pay me to live here. I will finally get the 5 million dollar apartment I so rightfully deserve for next to nothing!!!! I rule!
Comment #3 Posted By: Anonymous 01/20/09
Anonymous
#3 You are really not smart. Why are you so dismissive of #1?
Comment #4 Posted By: Anonymous 01/20/09
Anonymous
Is this the priced out studio buyer chat support group? Hey guys, glad to be here...and glad to be in a rental like all the rest of you. When you get to hell...do think it's a rental or a condo? I'm guessing rental.
Comment #5 Posted By: Anonymous 01/20/09
Anonymous
it is time that this mascarade of an overpriced overrated real estate market take this much needed downturn. I hope it lasts a very long time! this will and should be worst than 1987.
Comment #6 Posted By: Anonymous 01/20/09
Anonymous
rental market that should sink too. who can afford even a rental apartment in this city. my friends laugh at me for paying 2300 for a student apartment!! they say that is more than than two times what they are paying in mortgage where they own something. with Bloomberg in office rents have sky rocketed and the city has become unaffordable. we have an administration that is out of touch with the lives of real people. the people who keep this city running. what is this city without the workers. will all those making millions put out their own garbage drive their own cars and clean up behind themselves? we need leaders who know what a working person faces each and every day that keeps this city running. $60,000 a year is not enough to pay for anything and everything keeps getting more and more expensive. things must change. it is time for something different and better!!
Comment #7 Posted By: Anonymous 01/20/09
Anonymous
I am a broker and I can tell you that in the late 80s and until 1995 when the internet was still in diapers foreing buyers didnt have access to real estate information the way they have it today, I can tell you that if and when prices do reach the 800 per foot, there will be plenty of europeans and asians buying over the internet, so you will never enjoy 1995 prices ever again, technology will not allow it and this is a fact.
Comment #8 Posted By: Anonymous 01/20/09
Anonymous
that is correct!!! nowadays a japanese guy can view photos and floor plans of different properties at corcoran.com, elliman.com and nytimes.com and can make an informed decision, back in the days the banks were holding the notes and only a handful of people knew about it, but today all you have to do is google new york city apartments and the information is within reach, once prices come down, you will have euro buyers coming out of the woodwork, this is an island sourrounded by water and furthermore the capital of the world, everyone wants to be here, 1995 prices is an illusion will never happen again. probably whoever wrote that is a loser who missed the boat long ago and is still dreaming of a white christmas
Comment #9 Posted By: Anonymous 01/20/09
Anonymous
why NYC real estate will never go back to 95 levels stocks or nyc real estate? invest with another maddof of nyc real estate? put your money with bear sterns or nyc real estate? free flow of information on the net, theres no more land, manhattan is an island flush your money paying rent or own your own SHOULD I CONTINUE?
Comment #10 Posted By: Anonymous 01/20/09
Anonymous
comment 9&10,the asains and europeans have there own troubles...word on the street is dont invest in the new york or the states.
Comment #11 Posted By: Anonymous 01/21/09
Anonymous
If you real estate people lookd at the bank stocks that are the mainstay of this city, you would be happy to get 1995 prices. New York bank stocks are approaching 1986 prices. SOOOO why woul real estate hold here? Brace for delevraging to hit Manhattan for 2009 very hard... But eventually, inventory and job security will stabilize, then confidence will return. Mind you, this crisis is more about confidence in the banking system than anything else. This country lives on credit and financial trust in our banking system. No foreigner is coming here to buy if they think Citibank, Bank of America et al might colapse. When banks stabilize, then we will see lending and sales. In the meantime, those who cannot wait and must sell, will have to take a plunge. The trend-line shows 1995 is possible, but my call is 2003 prices. Happy new year... Who knows, the FED has printed plenty of money, we might even see sales up in Q3 of 2009!
Comment #12 Posted By: Anonymous 01/21/09
Anonymous
I hope RE prices get cut in half in 2009! I hope rental prices get cut in half in 2009! I hope salaries in 2009 get cut in half! Eh, wait, scratch the last one.
Comment #13 Posted By: Anonymous 01/22/09