The Not So Impervious New York Market

There has been a lot of weeping and nashing of the teeth about the current state of capital markets–rightfully so. And as we know, a lot of the blame can be spread around, lenders, investors, underwriters, brokers, and consumers all got a little to euphoric over the belief that the while the market might plateau, fall it would not. Of course, not the case.

District of Columbia. HOT! market from 2002-2007 now has significant condo inventory not moving and one of the highest declines in home values in the nation.

Same can be said for Miami.

San Diego

Los Angeles

But supposedly not for New York.

Ah, let me be one of those folks getting in line to say, yes New York too. Now don’t get me wrong NY by no means has the same level of problem as so many other markets in the US. Decline in NY is nominal. But any decline at all is telling of what means it ain’t getting better.  

Anecdotally, looking at apartment listing on Craigslist made me wonder if the New York market was springing a slow leak. I noticed words like “Negotiable” in lots of ads. Negotiable brokers fees, negotiable lease terms, even negotiable rent. A couple of people were even giving “$100 off” rent concessions. Never in my adult lifetime have I ever seen anything like that. So many times I have gone to look at a “cozy one bedroom” to find out it was a studio with an extra wall and then watched the apartment get snapped up while I am standing there trying to decide if I can live in a cave with a toaster oven next to a crack house for the low low price of $1200+.  Now, I am a smart saavy NY girl with technology in the palm of my hand, and I was surprised to see that many of these places were in fairly decent to nice neighborhoods.

What is really going on?

But statistically, the number of multi-family buildings and condominiums compared to second quarter 2007 has declined steadily because of capital market constraints. That means lots of folks are out of the market–even in New York where it seems like no matter what the cost, someone is always in.

And then, of course, there is the unsettling up tick in the number of foreclosures in Manhattan. (which will probably be saved by quick sell…of course)

Now, this might simply be a blip on the radar screen, but after the dismal mid-year meeting I just sat in, the news for some of the biggest banks continue to worsen. And as Mayor Bloomberg often says, New York is way to dependent on the presence of Wall Street.