New York property suffers from job losses and lack of Euro interest
|Monday, 06 October 2008|
Property in New York is heading for major price falls as high earners in the finance sector lose their jobs and bonuses and the number of foreign buyers drops.
Analysts believe that although New York real estate prices have held steady in the last six months since that's about to change.
At the luxury end of the market million dollar plus properties are lingering on the market for up to 90% longer than they did before the current finance crisis even in popular areas like the Upper East Side, Soho and West Village.
The city's high prices have been buoyed by moneyed buyers, many of whom work in finance. But the latest figures from the Department of Labor shows there have been 65,000 layoffs on Wall Street this year.
This is certain to affect other pockets of wealth, including Greenwich, Conn., and parts of Westchester County, North Jersey and Long Island.
Figures from Altos Research, a real estate research firm, found that in March properties in Soho's luxury sector were on the market for an average of 118 days. Now it is more like an average of 215 days, an 82% increase.
'I think the minute bad news hits, the first people that run for the hills are certainly buyers,' said Barbara Corcoran, chairman of the Corcoran Group, a New York real estate firm. 'There isn't a single person out there who isn't asking themselves if they should wait and getter a better deal in three months,' she added.
Another bad sign is a slowdown in the number of European buys. Last quarter Europeans accounted for approximately one-third of Manhattan luxury purchases, according to Miller Samuel, real estate appraisers.
But recent failures of Bradford & Bingley in the UK and in Belgium, the Netherlands and Luxembourg and trepidation about recession across the Eurozone, suggest that European property investors are increasingly wary.
'The credit markets have to be fixed before anything else, but who the hell knows when that's going to happen,' said Jonathan Miller. 'It's not going to be next week; it's not going to be in a month. It's going to be one to two years,' he predicted.
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