Stuart ElliottHello, lackluster 2011!
At least, that’s what some pundits are saying. New York’s housing market won’t be a lot better than it is now, but also not a lot worse, according to a survey of experts.
While our panel is relying on the usual market indicators (as they should), I’ve decided to divine an outlook for 2011 from our blog. The key, as with any soothsayer, is reading between the lines. Here are headlines from the last month and what they really say about the market’s future.
1. Roubini picks up $5.45M East Village condo (The market must be going up.)
I don’t know about you, but when famed economist Nouriel Roubini, the “Dr. Doom” who correctly called the great economic meltdown, plunks down $5.45 million in this market, he must not think things are that dire. After all, who even knew it was possible to spend $5 million on an apartment in the East Village? The priciest listings currently on StreetEasy are in the $4 million range, and there are only three of those.
2. 1 World Trade Center hits halfway point (The market must be going down.)
It’s great news that One World Trade Center is on its way — there is no question about that. It will be the city’s tallest building, and one of several super-tall structures coming to the skyline. The city is getting its tallest rental building (8 Spruce Street) and tallest condo project (Carnegie 57) and, across the river, New Jersey is getting its tallest rental building (the Monaco). But prior record-setting buildings were often planned during feverish booms, and completed during busts. Witness the Empire State Building, which was completed in 1931, near the beginning of the Depression. Or the Twin Towers, which were finished in 1971, the start of one of the worst recent decades in New York history.
3. Google’s $1.8B building deal to be all cash (The market must be going up.)
When Internet gargantuan Google makes far and away the biggest building buy of 2010, at 111 Eighth Avenue, and pays cash for it, you know there is more money where that came from (see “By the numbers: Tech loads up on real estate”). The purchase was the largest in history by a tenant, and made Mort Zuckerman, who completed the biggest pure-investor purchase of the year (in plunking down $930 million for Boston’s John Hancock Building), look like a piker.
4. U.S. existing home sales are up, NAR reports (The market must be going down.)
The perennially boosterish National Association of Realtors reported last month that home sales were up month-over-month. But the best that the trade group’s chief economist, Lawrence Yun (also known as “Sunny Yun”), could do was say that conditions this year looked to be “the most favorable on record for buying a home since we started measuring in 1970.” Only since 1970? And no mention of free cotton candy on every street corner. We should all be worried.
5. Another Core broker jumps ship to star in “Million Dollar Listing” (It doesn’t matter where the market is going.)
There is no shortage of reality TV shows about real estate these days. It started with Donald Trump’s “Apprentice” and worked its way down to rank-and-file brokers. Last month, we even had a handful of agents defecting from brokerage Core, which is already featured on a reality show (HGTV’s “Selling New York”), to go to rival brokerages so they could land a more prominent spot on another show. That show, Bravo’s NYC edition of “Million Dollar Listing,” began shooting last month. Brokers might not care if the market goes up or down if everyone can land a spot on a reality show and get 15 minutes of fame.
Besides trying to figure out what direction the market is headed in, this issue is filled with lots of other compelling stories. While the rich seemed like they didn’t have two gold sticks to rub together in 2009, now they are leading the way in the real estate market. Candace Taylor examines this trend in “Market seesaws toward wealthy buyers.” Also worth a read is Adam Piore’s story on the comeback of the mortgage-backed securities market, one of the culprits of the bust. It’s a good entrée into the topic for those who don’t understand this corner of the real estate world well, and an insightful behind-the-scenes look for those who do. Enjoy.
Stuart Elliott