Manhattan Condo Sales Fall Most In 18 Years
Obviously with my premise that Wall Street is in a massive bubble that will result in its bust, we should expect New York City to see one of the worst real estate corrections in the U.S. To date, New York's real estate has been held up as a beacon of hope by many. Yet, we see negative data starting to develop in Manhattan. A large jump in uber expensive real estate transactions, substantial price appreciation, a large increase in NYC foreclosures and the largest percentage sales decline in eighteen years.
I was living in New York during the late 1980s and the price drops I recall in Manhattan were substantial. I can actually remember reading of a specific story after a large Wall Street layoff. The asking price for a particular condo that was being purchased by a Wall Street executive fell a substantial percentage almost overnight after he backed out of the contract. As liquidity recedes to its source, Manhattan would logically be the last real estate market to be impacted. It now appears that process is underway.
As an aside, I find an interesting parallel to history. In the late 1920s, there were weekend traffic jams to the Hamptons as New Yorkers headed to their second homes and to weekend getaways. I remember reading somewhere in the last year or so that a private developer was proposing a new traffic artery to.......you guessed it, relieve traffic from New York City to the Hamptons. We've already seen real estate in the Hamptons start to crater. Next will be New York. The more things change, the more they remain the same. Note, this does not mean I am predicting another Great Depression for the U.S. Just that the last Wall Street bubble had similar circumstances re the Hamptons.
(By the way, Tokyo residential real estate remains very attractive nearly twenty years after their real estate bubble popped. As an example, $350,000 for a new two bedroom condo overlooking Tokyo Bay. This in a city comparable to New York and London in its sophistication and wealth. In New York what would that be? $2-5 million?)
I was living in New York during the late 1980s and the price drops I recall in Manhattan were substantial. I can actually remember reading of a specific story after a large Wall Street layoff. The asking price for a particular condo that was being purchased by a Wall Street executive fell a substantial percentage almost overnight after he backed out of the contract. As liquidity recedes to its source, Manhattan would logically be the last real estate market to be impacted. It now appears that process is underway.
As an aside, I find an interesting parallel to history. In the late 1920s, there were weekend traffic jams to the Hamptons as New Yorkers headed to their second homes and to weekend getaways. I remember reading somewhere in the last year or so that a private developer was proposing a new traffic artery to.......you guessed it, relieve traffic from New York City to the Hamptons. We've already seen real estate in the Hamptons start to crater. Next will be New York. The more things change, the more they remain the same. Note, this does not mean I am predicting another Great Depression for the U.S. Just that the last Wall Street bubble had similar circumstances re the Hamptons.
(By the way, Tokyo residential real estate remains very attractive nearly twenty years after their real estate bubble popped. As an example, $350,000 for a new two bedroom condo overlooking Tokyo Bay. This in a city comparable to New York and London in its sophistication and wealth. In New York what would that be? $2-5 million?)
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