Michael Bloomberg, Jan. 23, 2006, radio Address: “The real estate market is slowing down dramatically and we’re going to have a problem down the road. If people who want to sell their houses have to wait a longer time before someone comes along and buys it, it would be a miracle if prices didn’t start to go down.”
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Michael Bloomberg, Jan. 31, 2006, budget announcement: “New York’s real estate market is expected to slow with a 10 percent decline in home prices, a 14 percent decline in home sales over the next few years, and a significant decline in real estate transaction taxes that have buoyed the city’s tax revenue in the last few fiscal years.”
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The mayor, no slouch in the business acumen department, seemed in the last several weeks to be running a campaign of temperance regarding the housing market, one that was equal parts pragmatic and political. The market, after all, has cooled since the summer, and projections by market observers have it staying a more normal course in 2006.
“This reality check has been a long time coming and now is not the time to submerge ourselves in the delusions of real estate grandeur,” wrote blogger Property Grunt on his site after the mayor’s budget announcement. “This is the time to take a good hard look at ourselves and try to figure out a way to ride out the storm. This is the time to make hard decisions.”
But some see a political dimension behind the mayor’s pronouncements. (Bloomberg’s office did not return calls for comment, and the source for his sales and price projections remains a mystery. )
“From a political perspective,” wrote New York appraiser Jonathan Miller on his blog Matrix, “the city is running a large surplus ($3B), coming in part from the taxes paid by the housing sector, and one could speculate [Bloomberg] is positioning himself in the next fiscal year to lower the expectations of those who would like to spend it.”
Of course, you can nudge the mayor’s motives aside, and just take the interpretation of Curbed.com, summed up in its Jan. 23 headline: “Bloomberg shrieks ‘Sell!'”