For pretty much every business sector you can think of, 2009 was a roller coaster of a year—and real estate was particularly hard-hit. Some industry professionals have weathered the storm, while others have packed up and moved on from the uncertainty of this tumultuous industry to seek better fortunes elsewhere. Now, as the year draws to a welcome close, it may be a good time for not just evaluating 2009, but postulating what 2010 might have in store. So we asked a handful of New York real estate professionals to reflect back on this past year and see if they can look into their crystal ball to forecast next year’s trends and challenges.
A Big Rough Patch
Paul Purcell, co-founder of Charles Rutenberg Realty in Manhattan, frankly admits that from December 2008 through March of 2009, “I didn’t want to get out of bed. We had no market, no volume and no deals being done. We were off about 80 percent of our business. The day Lehman Brothers [went under] was called the ‘day of death’ around here—it was like the faucet got turned off.” Purcell explains that fearful buyers were pulling back—even if it meant forfeiting down payments and fees for properties in contract.
“Even when you knew cooler heads should prevail, it was a frightening time for all of us,” he continues. “It wasn't until late spring and early summer—right after Memorial Day—that the industry started to turn back on again. [Buyers] had been waiting on the sidelines, looking for prices to be attractive. Combine that with incredible interest rates, and these people decided they were going to go for it. These are just anecdotal reports, but the feel on the street seems to be that there’s a renewed confidence now.”
Raffi Arslanian, a principal with New Jersey-based RSA Development Group LLC, saw 2009 as the eye of the economic storm—and says that the full effects still haven't been felt in the area.
“New York City is not immune to market conditions,” he says. “Buyers are seeing greater drops in price in New Jersey, and consequently their appetite for looking there has sharpened. First-timers and much younger, less affluent buyers are making their way to the suburbs because New York City is still beyond their reach, regardless of the extent of price reduction.”