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New York

Wary of the rebound

<i>Is uptick in activity creating false hope for brokers?</i>

From the August issue: The summer of 2009 has turned out to be a confusing time for New York
City real estate. While Goldman Sachs reported record earnings and Fed
Chairman Ben Bernanke talked optimistically about green shoots, the
bleakest, leanest winter in recent memory gave way to an uptick in
contract signings, filling brokers with hope that the worst days of the
downturn have passed.

At the same time, unemployment surged to 9.5 percent in the city,
and second-quarter market reports proclaimed double-digit declines in
real estate values. The Department of Buildings published a list of 362
stalled construction sites in the five boroughs, evidence of the
continuing stranglehold of the credit crisis.

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How to make sense of these seemingly contradictory forces? No one
seems quite sure, but many experts are hesitant to call it a true
recovery, pointing to the weak fundamentals underlying the market.

“Brokers’ newsletters are very optimistic and very encouraging, but
there are a lot of people on our site who are skeptical and are
wondering if this is just a seasonal rebound,” said Sofia Kim, the vice
president of research at StreetEasy.

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ContractsStalled Projects