High Estates

MANHATTAN HOUSING – I expect a slower than normal wall street bonus season in the months of JAN – APRIL, in terms of buyer demand. As for bonuses, yes I think they will be given out (with some departments seeing drastic cuts in bonuses) but its HOW THEY ARE SPENT that I’m a bit concerned about. I expect inventory to build as we near summertime, as a result of a slower than normal bonus season, and wall street to deteriorate as we get more clues about whether we are in a recession or not. As wall street falls, so will confidence and demand on the buy side for Manhattan real estate products. At the same time, we will see more types of sellers contribute to inventory builds toward the end of 2008; speculators, foreign buyers flipping, second home’s selling, and struggling buyers who bought a bit more than they can chew or whose job security has changed to the negative. I expect job losses to grow during the first two quarters of the year as a result of the credit crisis and hit to the financial sector, leading to what I described above.

I’m also a bit concerned about appraisals coming in for contracts signed on new developments BEFORE the credit crunch hit. If sales do start to slip, how will banks lend on a product that sold for $1,400+ a square foot a year earlier? This worry is also tied to the state of the credit markets; should we see improvement this concern will ease.

While we won’t see a crash by any means, I think sellers will find that its a bit harder than they thought to move their property above last years comparable sales. As always, data proving or disproving this will not come until mid year at the very least due to its lagging nature.

Source:� urbandigs.com

This entry was posted on Saturday, February 2nd, 2008 at 2:01 am and is filed under Predicitons. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.