Stuart ElliottThis is a year that many in New York City real estate would like to forget ever happened. It began with business as we knew it seeming to cease entirely, with the deals disappearing and the fat checks for brokers along with them. A year when one had to figure out how much was saved up from the good times, and how long it would last (even if things improved later in the year).
We’ve looked at New York City’s bottom-scraping records and lowlights in “Time to define 2009” and “New York gets crushed in year of record lows,” but some context is helpful, if only to make us feel better: While New York tanked, some other markets experienced catastrophe.
Take Detroit.
Last month, Detroit’s Silverdome stadium, which was the biggest stadium in the National Football League when it was built for $55 million in the 1970s, sold for $583,000, or the price of a one-bedroom apartment in Manhattan.
Homes, meanwhile, can be purchased in Detroit these days for as low as $7,500, or about the same price as in the years following World War II.
And the amount of vacant land in Detroit right now equals the entire footprint of Boston, as appraiser Jonathan Miller recently noted on his blog, Matrix.
Buyers are few and far between in Detroit. A little over a month ago, about 9,000 Detroit properties — mostly abandoned or derelict — were auctioned off with opening bids starting at $500, meaning one could buy a home for the price of a laptop computer (making $7,500 for a regular resale home seem expensive). Only 20 percent of these properties received bids.
Or take Miami.
In the past year, there have been news stories about squatters taking up residence in near-vacant condo high-rises downtown. Meanwhile, in an arguably noble yet still illegal attempt to fix a social problem, community activists have broken into vacant foreclosed homes and set up homeless families there.
And some buildings have just remained empty. In the city of Sunrise, near Miami, for example, a 26-story high-rise with nearly 400 units, named Tao, had zero residents this summer after opening, according to reports. It’s for this reason that one company in South Florida now offers to wrap unfinished construction projects in plastic — so they can be put on hold and resumed later.
Not that building would likely be resumed soon, with one recent report by mortgage insurer PMI estimating the likelihood of further price declines in Miami at 99 percent, and financial analysis firm Fiserv predicting prices will drop another 30 percent there.
One in four Florida homeowners is now late on a mortgage or in foreclosure. Buying a home for five figures, which seemed a far-fetched notion, is a reality these days. The median price of a Miami-Dade condo is now $138,000, and in neighboring Broward County it’s a mere $83,000, one-tenth the median price of a Manhattan apartment.
There are other markets that make New York City seem like it’s doing pretty well. In Las Vegas, there is the bankrupt $3 billion Fontainebleau hotel resort, one of the biggest development projects in the U.S., whose unfinished 63-story shell is being used by firefighters for training. Husks of unfinished projects line the Strip, in a city with the highest foreclosure rate of any large city in the country, according to a recent study.
Of course, New York has its problems, even if they are smaller in comparison. In a cover package this month on buyers trying to bail out of new development condo deals, reporter Sarah Ryley examines buildings that have seen the most buyers trying to back out of their contracts after their homes dropped in value. Many millions are at stake in the battle between developers and buyers, and some interesting court cases lie ahead that will determine how this drama plays out.
Where the New York City market will go next is anyone’s guess. But reporter Candace Taylor nails down some of the seismic shifts that will take place in the residential brokerage world in 2010 in her package on “Game Changers.” They include the likelihood of a true Multiple Listing Service for Manhattan being established soon (there is already an MLS in nearly every other market in the country) and how old-school co-op brokers are gaining greater prominence, while flashy condo brokers who gained power during the boom have fallen by the wayside. The stories are definitely worth a close read.
Finally, a bit of housekeeping. Our publisher, Amir Korangy, tells me that next month the price of an annual subscription will be $95. Unlike home values in Detroit or Miami, the price is going up, but I’d like to think it’s still a bargain for the wealth of information in our pages each month.
Enjoy the issue.