For years, people talked about how the housing market in New York City was “recession-proof;” how buyers' desire to live in New York City would always trump any housing problems the rest of the country was experiencing. But as the calendar turned to 2010, it’s pretty clear that New York is facing the same problems as everyone else.
According to experts in the industry, prices for co-ops, condos, and even rentals have slid back, with some areas of the city seeing double-digit decreases.
"In general, transactions rose steadily from about 2003 to 2007, then they started to decline about the second quarter of 2008,” says Michael Slattery, senior vice president at the Real Estate Board of New York (REBNY). “Beginning in the second quarter of 2009, sales began increasing quarter to quarter though well below the high points of 2007-2008.”
It's Weird Out There
“Fewer apartments are coming on the market these days, which is what is fueling a frantic sale market at this time,” says Barbara Fox, president of Fox Residential Group. “The sellers who are putting their properties on the market are those people who really need to sell—estates, business transferees, etc. There is very little speculative listing by owners today—just putting a property on the market at a very high price and waiting to see whether it will sell.” She says this is affecting new housing stock as well, since fewer buyers will always mean that developers have less reason to build.
“It seems inevitable that with the 80 percent drop in new housing permits this year, and probably 50 percent or more of the new permits issued in 2008 stalled, that the inventory of new units will decline as will the total available for sale,” adds Slattery.