With this ongoing series of interviews, I endeavor to expand our collective insight into the people, events, and trends that have a positive effect on the real estate industry. My guests are visionaries who are integral in shaping the way we live in the world today. I sincerely hope you enjoy learning from them as much as I have.
Hindsight is not always 20/20………. and it’s amazing how quickly things turn. For better or worse.
It has been 2 years since the sub prime mortgage industry credit crunch rippled through the globe.
It has been 18 months since the collapse of Bear Stearns.
It has been a year since the fall of Lehman Brothers.
The Manhattan residential market has lost almost 50% value in some sectors since its peak in 2007. A drop that came quicker and more dramatically than ever before. Yes, even more than Black Monday 1987.
Crains’ Amanda Fung covered a story yesterday about the recent activity over the summer. My opinion is that the value of the market has levelled off, and once banks start lending again (hopefully soon), the velocity of deals will pick up.
Next year this time, there will be a number of people who will be saying “I could have…………. I would have……….I should have!”
Shaun Osher was recently interviewed by Multi Housing News. He discussed The Realtime Report, the Manhattan housing market, green living and more…
This morning I spoke with Erika Schnitzer from Multi-Housing News and gave her my opinions about where the market is, and might be going. Read the story here.
ANSWER: I think it depends partly on YOUR agenda.
It seems as if every time I open the paper or go online there’s a story about how terrible the real estate market is and how we’re all doomed! Well, the mass media has been waiting to cover this story for many years. Some even wrote about the crash 5 years before the market peaked. Could they have had that much foresight? (See the definition of sar-casm in Webster’s).
Just this week alone NY Magazine published a story about “The Bust of Williamsburg” and The Observer covered the “Condo Doom” of all the supposed stalled projects in Williamsburg and Greenpoint. I know of a few of these mentioned that are far from stalled! The line between news and entertainment seems more blurry than ever.
On the other side of the coin, I find it interesting that the talk amongst my peers seems to be of rebound and exciting opportunity. Some are even Twittering RT@Corcoran_Group CEO Pam Liebman: “In June, Manhattan had 11 deals over $5M. Brooklyn had numerous sales over $1M & several townhouse sales in Cobble Hill” and RT@Corcoran_Group Corcoran CEO Pam Liebman: “There has been a LOT of pent-up demand that couldn’t wait anymore to take advantage of lower (home) prices.” and RT@Halstead Get em’ while they’re hot! Brooklyn Brownstones are flying off the shelf!
I am most intrigued by those who have no agenda. Matthew Barron is one of those people and he releases a monthly newsletter called Perspectives. This month he contends that “the current environment is the perfect time to consider investing in NYC real estate”. Read more here… Perspectives July 09.
Looking back over the past six months of market activity, it is clear to see that we are in a stage of absorption recovery, yet further price weakness. This has been the fastest market adjustment we have ever seen in the city and it is clear that Manhattan has not been immune to the effects of the national housing market and weakened global economy. The last three months of 2008 had the lowest deal volume for decades, and perhaps historically. Even the post September 11, 2001 market activity decline was brisker than the decline we are currently facing. January 2009 had fewer than 200 new contracts signed in Manhattan, but since then, the deal activity has consistently increased across the board. June had more than four times the volume of new contracts signed than January. On average, the market is selling close to 40% lower than its highs from 18 months ago. In the past six months, we have seen new contracts being signed at consistently lower prices. The weakest part of the market continues to be the luxury market (3 bedrooms and larger) and even though we see a slight increase in contract prices, there are still very few larger units purchases being negotiated. There are small signs of a recovery, but it is unclear if this is seasonal, pent up demand from no activity, or buyers starting to recognize that this is clearly their market, and they are beginning to taking advantage of the opportunities that exist. As prices have continued to decline, there is a sense that we are nearing a bottom, although the timing of a turnaround is uncertain. Thanks CNBC for taking note. (more…)