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81 Comments
- CrazedLeper, on 04/25/2008, -1/+10Dont' tell it like it is, people hate that.
- ileftfark, on 04/25/2008, -1/+10This isn't that hard to figure out.
- Relatively wealthy population
- Limited supply
- High demand
- Low unemployment rate
- Low dollar value = increase in foreign investment
It's not just Manhattan, its any place that fits that model. I think while they aren't in a position to be mired in the housing crisis, they will befall their own issues with the financial sector... unless they play things smart. - mytibt, on 04/25/2008, -2/+10High high end items across most industry are recession proof largely because of the foreign buyers, identified in the article. Items such as luxury yatchts, luxury homes, etc... will always have a market because interest rates and related variables fluctuate.
This said, I can't afford these items regardless of the economic turn. - AlKo, on 04/25/2008, -1/+8Yes, most of the middle income people that I run into in Manhattan don't live there. Sure, I'm bridge/tunnel but it seems like most people are as well. Queen, Brooklyn, Jersey, LI, CT... all these areas are effected as well by NYC's insanity. My gf was looking at a small condo on 57st in on the west side about 4 years ago... it would have went for the same 450k+ as her current home across the GWB in Fort Lee. Now, obvious that place well over that and close to 750k+ and still climbing. It's getting really hard to buy a home and raise a family in the NYC metro area because of this price insanity.
- eryximachus, on 04/25/2008, -0/+6Only properties constructed prior to 1974 are rent regulated. Very few units fall under WWII era rent control laws - most are rent stabilized. Certain other properties that are constructed with a low-income component, like an 80/20 building where 20% of the units are for low income folks and are at restricted rents, qualify for tax abatements. If the building receives the tax abatement, the units are rent stabilized. Still though, this only holds true if the tenant makes less than $175,000 a year. These days, that is often not the case in prime Manhattan.
In any event, yes - rent regulation produces housing shortages and you are right that this means there is huge demand. It would take a terrorist attack or a major depression to hurt the market.
Let's hope none of that happens. - CrazedLeper, on 04/25/2008, -1/+7I beg to differ. Those people are wealthy enough to have their servants jump for them.
- zlatinb, on 04/25/2008, -1/+7Well let me tell you we haven't seen any of the prices come down yet.
- xerodustrial, on 04/25/2008, -1/+6From what I understand, NYC's buying population is shifting from domestic to foreign -- mostly from Western Europe and Canada.
I can only presume this is because the weak US Dollar, combined with the relatively strong value of the British Pound Sterling/CA Dollar/Euro, gives the average European significantly more leverage to afford to buy things there. Given that most Europeans/Canadians with some extra money aren't any less rational than Americans, they probably decided to invest their money towards property in a place where they know they cannot lose -- if everything's already for sale, and the exchange rate is saving you a huge amount of money, why not buy?
NYC is big and busy enough that an influx of foreign buyers should prop up the value of real property out there for some time. It certainly doesn't help that NYC has one of the highest concentrations of wealth on the planet, and that wealth keeps the industries of the city in gear.
Unfortunately for Americans living in the area, that means there will probably not be a significant devaluation of real property. - 55mph, on 04/25/2008, -8/+12Wait until Wall St implodes due to the derivative crisis we haven't read about yet. $34 trillion of face value derivatives that have zero intrinsic value. We haven't begun to see the layoffs yet. The domino effect will takes it's toll. GL
- readme, on 04/25/2008, -2/+6Time for me to move. I bought my place four years ago in Manhattan and it's gone up 50% since. Houses in the suburbs are down about 20% so think it's a great time to get out. Especially if the Democrats get in in 2009 and change Capital Gains.
- surKaz, on 04/25/2008, -1/+5Sure.. Dr Manhattan is immune to that.. He's immune to everything!
- Enron1985, on 04/25/2008, -2/+5Manhattan is probably just where all the mortgage brokers/bank people live.
- rudy23, on 04/25/2008, -1/+4Ask my landlord.
- 55mph, on 04/25/2008, -0/+3ya know, you're right. people hate a kiljoy.
- reuscel, on 04/25/2008, -0/+3I hate to be that guy, but isn't it "immune to"?
- diggNewton, on 04/25/2008, -3/+6I wouldn't know. I'm stuck out in Queens.
- br0ck, on 04/25/2008, -0/+3Are you really profiting more than $500,000 (or 250k if single) from the sale? That's how much a couple can earn on a home sale before capital gains tax kicks in as long as you've lived there more than 2 years. Also, you have to be making more than $250,000 per year for the proposed capital gains changes to affect you. http://www.doityourself.com/stry/capitalgainstax
- ethomas046, on 04/25/2008, -2/+5There's nothing surer: The rich get rich (buy apartments like this) and the poor get laid off.
http://15cpw.com/home.html - anonymiau, on 04/25/2008, -2/+5Yes, Manhattan is immune. Prices can never ever go down in Manhattan. They will increase forever into oblivion. Manhattan doesn't obey laws of nature, like the rest of the earth. Things are limitless there. It's strange such a place should exist, but no matter what happens to the economy, be it hyperinflation and nationwide depression, Manhattan will still be a bubble of wealth and prosperity...great title...
- jetsetsc, on 04/25/2008, -1/+4The housing downturn does seem to be localized - with the prices of housing in more distant suburbs requiring long commutes, dropping quickest. Urban centers like NYC are less affected by the price of gas. It's not just the cost of housing, but the affordability - taxes, transportation costs, etc, that go into the desirability of real estate. It's also simple supply and demand. There is a glut of poorly built suburban housing miles from anywhere - that's bombing. Manhattan will always be a relatively desirable location, with a finite housing stock.
http://www.brookings.edu/reports/2006/01_affordabi ...
- olenick, on 04/25/2008, -1/+4The Bear-Stearns bailout sent a pretty clear message too. Market forces pushing prices down on Main St.? Oh well: the market knows best. Those same market forces -- for those same market products -- about to push prices down on Park Ave? Emergency! Send in $29B public dollars at 2.5% interest.
- azzythedemon, on 04/25/2008, -1/+4Manhattan is rent-controlled and has a whole host of other ***** rent laws. My family pays $2,000 a month in rent for a 650-square foot, 2-bedroom apartment. It's a bit cramped for four people. But, apparently we're going to make too much money next year to stay here and so will get kicked out.
***** if I ever saw it. - readme, on 04/25/2008, -0/+2That's actually good to read. I was unsure about the specifics. Thanks for the link.
- 55mph, on 04/25/2008, -0/+2"NYC is big and busy enough that an influx of foreign buyers should prop up the value of real property out there for some time."
Until they realize that NYC considers you a city resident if you sleep there for 30 days during any 12 month period. Then the tax man comes calling. Don't worry. The Euro is headed south too, sooner than later. See that wealthy guy sitting next to you? He's going to be middle class in a couple of short years. - musters, on 04/25/2008, -1/+3I would bet that NYC, Chicago, and Toronto will all survive any recession with no difficulties. These cities are the powerhouses that run North America. All still producing housing price gains while all other cities are posting losses. The reason LA is not in this group is it seems to be more of a destination than a engine... like Florida.
Unfortunately, in these cities just the poor will be affected, and those potential home-buyers who would have purchased, will be unable. So I think prices in these locales will steady during any recession simple because there are less buyers in the market, but for the most part, any downtown piece of property over the long-term is a good investment. - IphtashuFitz, on 04/25/2008, -0/+2I think it depends entirely on how far the downturn goes. If you were a zillionaire and could afford it, would you buy a luxary apartment in Manhattan if all around it were vacant apartments, people getting evicted, buildings being foreclosed, etc? If the neighborhood started to fall apart I seriously doubt many people would buy a place there even if they could afford it. Sure, it's likely a long way from happening, if at all, but eventually it could get to a point where even the super rich wouldn't really want to live there if the economy & housing markets slump enough.
- UGM2099, on 04/25/2008, -1/+3According to Digg the US should have collapsed about 1.5 yrs ago and we should all be in government prisons.
- diggerphelps, on 04/25/2008, -1/+3"If something cannot go on forever, it will stop."
--Herbert Stein - BCRazgriz, on 04/25/2008, -0/+2If you limit building of course house pricing will stay high and they will sell, because they're the only choice people have. Where I live in Georgia, they are building TONS of subdivisions, I could pass more than 10 just driving a few miles from my house, and NONE of them are selling, they're all empty and no one can sell their houses anymore. Why? Because there is nothing limiting how much can be built.
- TheWriteGuy, on 04/25/2008, -1/+3It's always about location, location, location. Lots of people want to be in the "cool" places like Manhattan, compared to a boring, generic exurb out in some fly-over state. Limited supply and greater demand.
- dpierce, on 04/25/2008, -0/+2Or this: http://flickr.com/photos/nicknormal/2274956896/
- inactive, on 04/26/2008, -0/+2Genuine rent control is incredibly rare now... you would have had to have been living in the same apartment since at least 1970 to qualify. For rent stabilization, I think you have to have been in the same unit since 1993, and once its rent goes over $2k/month, the stabilization no longer is available.
If you want some hardcore trivia, there is a special class of rent control for apartments located in otherwise single-family homes, e.g. one floor of a townhouse rented out as an apartment. If you have lived in such a unit since 1953 or earlier, you qualify for rent control! I've always wondered if even one unit falls into the category anymore... I bet one does, honestly. - austin63, on 04/25/2008, -0/+2so did I
- sagat, on 04/25/2008, -2/+4My $3200 a month 1-bed indicates 'yes'.
My empty wallet indicates '*****'. - muckemuck, on 04/25/2008, -0/+1 It's true that the foreign investors are buying up bargains in the US right now because the US dollar is weak... but remember we're in a "global market" and if the SHTF in the US it'll cause a huge downturn in other countries.
- austin63, on 04/25/2008, -0/+1not funny
- joe8pack, on 04/26/2008, -0/+1isn't this always the last question asked before the bubble bursts? Is "x" immune from the normal business cycle? Insert "new economy" "housing" "the Internet" or any other variable suitable for discussion in the shallow managed corporate media that turns our heads away from the real problems to focus on the clown in the corner while they steal our wallets out of our pockets.
When the dollar is worth pennies on the world market, when our treasury is bankrupt from fraud and deceit, when the very rich own everything, and everyone else is dead or in jail, who will want to live anywhere else? Only then will the true value of Manhattan real estate become evident. It would make me laugh if it wasn't meant to distract from the tragedies happening in our midst. These are Shakespearean times we live in and high tragedy will be writ large across this canvas we inhabit. - nobelief, on 04/25/2008, -2/+3he meant in *Manhattan*
- inactive, on 04/25/2008, -1/+2Nuttin wrong with Queens. I'm at Forest Hills and i love it there, one stop on the F for the best Indian around, and 3 stops on the V for the best Chinese food around, there's even talks of opening a farmer's market in FH.
- inactive, on 04/25/2008, -0/+1Gotta make room for more of your ***** Obammaspam right?
- hungarianhc, on 04/25/2008, -3/+4Wait til more bankers get laid off and they all need to sell their places
- roho76, on 04/28/2008, -0/+1Well when you have Millions of dollars it doesn't really matter how much the dollar is worth because in thee end you still have millions of dollars and you don't really care that gas is $10 a gallon. So the lesson here is make sure you have millions of dollars or you're *****. Good Luck.
- GroundhogBoy, on 04/26/2008, -0/+1We also make more than you make in Florida.
Secondly, we're not surrounded by old people. - GroundhogBoy, on 04/26/2008, -0/+1I do think that the housing crisis nationwide has affected rent rates, though. In 2006 & 2007, rents shot through the roof. I paid an increase of 12% in 2006 and they wanted an increase of 16.5% in 2007 when I decided to find a new place to live. That was after a 3% in 2004 and 2005, with no major improvements to the property to warrant the hikes. This year, my increase was a normal cost of living increase again - 3.5%
- pak314, on 04/25/2008, -2/+3What do you think would happen if the the Fed didn't bail out the financial firms with the junk investments?
- Y0tsuya, on 04/25/2008, -0/+1Half of whom will be laid off by the time this is all over. Hey it beats jumping out the windows.
- MWeather, on 04/25/2008, -1/+2Prices, not buildings.
- 55mph, on 04/25/2008, -0/+1Patience. Most hard assets decline during a depression, especially real estate.
Cheney says ' Let em' eat ethanol.' - davdev, on 04/25/2008, -0/+1It also occuring mostly in places that were at one time considered low income. I have been paying close attention the the real estate market in MA, and while values are down slightly just about everywhere, they are much more so in lower income areas. A lot of people foolishly spent a lot of money in houses in bad areas and are now getting killed. The more affluent areas are holding up fairly well, and still selling, though not as briskly as two years ago.
My neighborhood is still selling for significantly more than I bought 6 years ago, even if it is slightly more difficult to re-fi because the banks are tightening up, and giving below market value appraisals. - z28com, on 04/25/2008, -1/+2You people paying those amounts for housing in NYC are COMPLETE IDIOTS! You could own NUMEROUS beautiful homes in Florida!! I am so glad I don't live up there to put up with that *****.
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