Profile picture for sunnyview

Manhattan finally feeling the pressure?

This article talks about the changing RE market in Manhattan. Upper priced properties have largely been unaffected by the bubble up to this point, but it sounds like even buyers in this ritzy NYC neighborhood are wanting more for their money now due to stock market worries and the uncertainties in the upcoming election.

http://www.ft.com/cms/s/0/28fa17d0-787f-11dd-acc3-0000779fd18c.html?nclick_check=1

Do you think that there is any relationship between how long it takes for a market to show stress from bubble inflation with where prices will eventually end up (ie if it takes longer for them to show weakness, prices will drop less in the end overall)? Or will markets simply correct to supportable levels based on fundamentals like affordability, job outlook etc. no matter how long it takes prices to start softening?
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September 02 2008 - US
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the second option. some areas, like manhattan will always soften last, and most likely, the least, because of desireability/lack of availability (manhattan is an island. there is only so much space to put a dwelling on, therefore there will always be more demand than supply. what you are seeing now isn't likely a lack of demand, but likely a lack of available mortgages. people still want to buy, but can't because the mortgage requirements have tightened, creating lower demand.)

 

affordability, job outlook, etc. has always been the standard upon which housing prices were based. it has only been recently that free and easy credit created a housing market with no basis in reality.

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September 02 2008
Profile picture for buyer4896
Remember that by New York state law it takes the lender about 12-19 months to foreclose a property. In most other states it is between 60 to 120 days. So the wave of foreclosures that are going to ripen is about to hit New York City. Just sit in tight.
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September 03 2008
Profile picture for sunnyview
Good to know. It might explain the very slow creep of prices downward. The run up has been spectacular so I just hope the correction isn't as brutal I think it might be.
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September 04 2008
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That is a long time!

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September 04 2008
 
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