Manhattan Market Frozen
The news from across the East River ain’t good: Prices and sales volume are both down, and it’s taking a lot longer for apartments to sell; inventory is up 34 percent over last year. That’s the bottom line of the First Quarter Report from Douglas Elliman and Halstead released this morning. The number of co-op…
The news from across the East River ain’t good: Prices and sales volume are both down, and it’s taking a lot longer for apartments to sell; inventory is up 34 percent over last year. That’s the bottom line of the First Quarter Report from Douglas Elliman and Halstead released this morning. The number of co-op and condo closings fell 58 percent year-over-year and prices dropped 11 percent. (Co-op prices fared worse than condos, though that was likely skewed by fewer eight-figure co-op deals; in fact, the number of $10 million deals fell 87 percent.) Consumer confidence is the killer, said Dottie Herman, president of the Prudential Douglas Elliman brokerage firm. People are scared. They have never seen anything like this. Corcoran head Pam Liebman predicted that prices will fall further as sales volume picks up, which is good—it’s the only way for the market to find its bottom. How do you think the Brooklyn market is faring compared to this?
Apartments Sell for Less if They Are Sold at All [NY Times]
Crisis Hits Home: Manhattan Massacre [NY Post]
Photo by Rob Young
11217 — You’re missing the point when you mention Queens, Staten Island and New Jersey. Sure they are *less expensive* but I wouldn’t say affordable…. and you’ve changed the game. You’re now looking at a place to live as a place to sleep and you work in Manhattan… an hour + commute away.
What if I actually want a certain quality of life where the arts, cuisine, culture, AND work are actually accessible to me? I either have to make ridiculously high, unsustainable wages and live in the “most desirable” areas… or I choose a city that is smaller in scale. And the inverse, businesses will locate where they will be able to attract a workforce with these “perks.” The ability to attract a workforce is invaluable! NYC currently has that ability… but *retention* becomes an issue. “They’re paying me $60k!! and I get to live in NYC!” That’s all great… until you find yourself living in outer-Queens commuting 3 hrs a day on a packed subway and can’t afford the culture and art the city has to offer.
My prediction is that the smaller-scale city is what will take hold. (in the 10+ year range… not in the rollercoaster peaks and crashes we’ve been experiencing over the last few years)
11217– It’s all about the long-term. “but it’s certainly not NYC” is one of the things that makes NYC ridiculously expensive. Folks start to believe the hype and think that the experience they might have elsewhere is somehow inferior. There’s no reason an arts scene, culinary scene, sense of community etc. can’t emerge somewhere else… equal to or superior to NYC (if you are prepared to admit it).
Sure, Providence has issues — but a lot of the unemployment problems in R.I. are because the state as a whole is in the middle of a transition… like Michigan.
Both are/were heavy in manufacturing or various types…. this will shift. Blue collar jobs will remain (and probably grow), but a different sort. States and cities that have already gotten through a lot of the “transition pains” appear a lot more stable these days.
“but I think NYC is not affordable in the long-term”
I don’t know…it seems as though we are headed in the direction of becoming more affordable, at least.
The things is…us brownstoner readers are in a bubble. It would be like us starting a blog in LA that makes up the Santa Monica, Westwood, West Hollywood area and then saying nothing is affordable anymore, when there is a WHOLE city around us with areas that are affordable.
Leave the brownstone belt and Brooklyn is actually quite affordable. As is Queens, the Bronx, and parts of Staten Island and New Jersey.
We are in one of the most desirable areas of the city, so of course it’s expensive. Maybe it wasn’t like that 30 years ago and some old timers can’t believe that this part of Brooklyn is “cool” now, but it is. It’s a fact. Brooklyn has become a “brand” and that brand basically refers to Williamsburg/Greenpoint and Brownstone Brooklyn.
You’ve brought up Providence a couple times now…Michigan and Rhode Island are one and two in the nation for the highest unemployment rates in the country…both are now over 10%. And they say that’s not even close to the actual numbers, because those are just the people actually looking for work…
What jobs exactly do you see Providence luring back…? I’m genuinely curious, because in my mind, if Boston and NYC become more affordable, most companies would try to establish a presence there…not in Providence. I see New Haven poised to attract more people than Providence (and I do really like Providence a lot, but it’s certainly not NYC).
http://www.projo.com/news/content/RI_JOBS_01-23-09_RJD28BC_v185.4280185.html
11217 – i hear ya… but I think NYC is not affordable in the long-term. It’s not sustainable. In global economic terms, the wages required to live in NYC are absurd. Yeah, cost of living is high and the wages are *relatively* high — though not in-line with the C o’ L.
How is a company supposed to compete when a middle manager in NYC must be paid $90k or more, when the same job in Houston or Philadelphia or Seattle is $50-60k ??!
Also, I really don’t see companies moving to NYC in droves. Commercial real estate in Manhattan is still $50-90 /sq ft. It’s half that or less is soooo many other cities. You really NEED to be in NYC to pay those rates… and I don’t see this “need” being justified for a lot of companies.
DIBS – I agree, a lot of the growth these cities have been experiencing is due to the bubble… BUT they are still far more attractive options than NYC for folks looking at the “transition” from suburban/rural life to one of more density. And it’s the bubble that has given these cities a little kick in the arse — sure, they’ll slip backwards a bit, but not back to they’re low point.
NYC doesn’t have a lot of ways to “expand” infrastructure-wise before major quality of life issues start to manifest. These smaller cities can… and will. Some will “fail” and others will bloom. NYC will simply become painfully out-of-reach for most people to even contemplate… and “just working in NYC” and living elsewhere will become increasingly less and less attractive when other options start to appear. Why live an hour+ one-way commute form manhattan in Somewhereville, NJ when I can get a similar job in Providence and either walk or take a bus 15 mins to work…
Tyburg:
I think that as NYC becomes more affordable, a lot of companies who thought they couldn’t afford to be here, might take a 2nd look. I think the same is true for people. I thought of moving to Portland 2 years ago when prices here were outrageous…I went and met a ton of people who had relocated from NYC to there. I hear some talking about maybe moving back now that NYC is becoming more affordable again, as I’m also hearing from a few people who left for the burbs because they found NYC too expensive.
I don’t know…obviously this is all anecdotal, but my zest for moving to Portland has waned after going back again 2 months ago. It’s lost a little bit of it’s shine for me, because everyone I talked to said they wanted to move to Brooklyn. I had to rethink things, and thought that maybe it was a “grass looks greener” type of thing for me. Maybe one day I’ll move there, but I’m in no hurry anymore.
Even the guy who started Stumptown coffee up and left Portland where he started his business and moved to Carroll Gardens.
sam:”I take the opposite view of most academic environmentalists and believe that it is just as likely that dense cities like NY will be the least sustainable while sprawling cities will be more so. Cars are getting very clean and very efficient. The MTA on the other hand is a stone age relic that seems to be on the verge of extinction”
Completely untrue. Car-oriented systems can never compete with NYC; cars are nowhere near clean enough, and electric cars just push off the pollution to central plants. The energy usage of NYC on a per capita basis is much smaller than suburbs, because of large buildings and attached residences (not to mention less land use). Subway and bus transit is much more efficient, don’t conflate the incompetence of the MTA with the actual transportation.
tybur6…I think those cities are all good choices. I know that Worcester has pulled itself up from the dregs, Providence has gentrified as well. Unfortunately most of this has occurred because of the nationwide murant asset bubble.
As you may or may not know, I am long Philly and Bucks County property. Philly, due to its proximity to NYC, will continue to see an influx of people. Its just sad that the goverment there is so poor and the crime continues to be a drag for anyplace outside of Center City.