Monday, November 10, 2008

Its Official...The New York City Real Estate Downturn Begins

According to the New York Times, a crack in New York City Real Estate’s mighty armor has finally showed its ugly face. On the front page of the New York Times real estate section states, “ Even though the average price for a Manhattan apartment, at $1.5 million, is higher than it was a year ago, some New York neighborhoods have already started to feel the downward tug that has wrenched the housing market elsewhere in the nation.”

Though this is the first major article stating that a downturn has begun, we have been seeing this for awhile now. Since the credit crisis began about a year ago a lack of buyer confidence has started to grab hold and the once piping hot market began to cool off.

These outer neighborhoods or fringe neighborhoods have showed the first signs of the downturn. Harlem, East Harlem, Midtown West, and Hell’s Kitchen, have showed the biggest year over year decreases.

While the rest of the country has been facing a continued real estate downturn New York City has been the shining beacon of hope seeing appreciation that seemed like it would never end. This run up occurred because of a perfect combination of forces, a few including an easy source of credit from banks, a weak US dollar brought in oversea investors buying condominiums at significant discounts, Wall Streeters were buying properties with their huge bonuses, and the psychological impact that prices were never going to stop going up.

A credit crunch has made mortgages harder to obtain, the Wall Street meltdown is in full effect, and buyers are now watching from the sidelines to see what happens in the short term.

As always, buying Real Estate should be a long term investment, so unless you are selling, you will not know the true value of your apartment. For those people who have a strong need for a New York City apartment, you have entered a buyer’s market. The tables are turned and now you are in the drivers seat. The opportunity to buy fantastic apartments that were once financially out of reach or sold during the first open house will be ripe for the picking.

To view more information about buying in New York City:

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