New York City Real Estate: Are You Next?
Last week I attended the INMAN Connect, a real estate technology conference. While attending various seminars and listening to many people’s opinions about this or that, there was one common question throughout the conference which kept coming up in every conversation: What’s next for Manhattan real estate?
I saw it everywhere, from Dolly Lenz’ quote in The Real Deal:
“It’s a stale market.”
to last Sunday’s article in The New York Times. Apparently, many people are beginning to recognize the signs of “a new market” emerging.
I’ve always said that Miami real estate was 10 years ahead of NYC with regard to real estate. We were the first to boom. We had the first branded condos. We had the first “starchitects.” We were the first to have the new “sexy,” “lifestyle” condos. Miami did “zen” three years before most people even knew what it was. We were the first to BUST.
I remember looking (there was really nothing to read) at New York Magazine about two years ago and noticing a special section which debuted called “VU.” It was a section dedicated to real estate in Manhattan and advertised all the glitzy, modern, edgy, branded new towers, and was like premium cocaine for the real estate addict. I remember thinking to myself, “this reminds me of Ocean Drive magazine three years ago.”
Remembering back to the spring of 2005, I had a conversation with a colleague about the real estate market here in South Beach, I remember telling her that the boom was over and to get ready. She, of course, laughed and told me how crazy I was and that South Beach was a WORLD-FAMOUS destination and the real estate market would NEVER have to endure so much as hiccup in South Beach.
We continued to discuss the ying-and-yang of it all, but we decided to disagree.
All The Signs Are There
While reading the January issue of The Real Deal, I decided to pull some quotes and titles at random from the magazine, I love this one the best:
“Starck heads downmarket”
Come on, Philippe Starck is now doing RENTALS in JERSEY???? Priceless.
“A sober look at year ahead”
“Residential brokers hang onto hope”
“Will the city’s hotel market stay strong or stall amid a glut?”
“Playing by a new set of rules”
“The exuberance has dissipated a bit.” Gil Neary, The Real Deal
Here’s What I See
- Lots of inventory in the pipeline
- Attitude of buyers changing
- Attitude of agents changing
- Loss of liquidity in the mortgage markets
- Recession
- Heavy reliance on the foreign buyer
- Banks are laying off workers
What Will Be Will Be
As an agent selling real estate in Miami Beach for over 15 years, I was in the business before the boom, during the boom, and now in the messy aftermath of the bust. Truth be told, it’s not all that bad. Sure, I miss the days of 2004–2005 market, but just like the condo bust of 1983 on Brickell Avenue, Miami recovered then, and will again.
Words of Wisdom
Now, before anyone out there goes “postal” on me, I’m not wishing for this to happen. What I can tell you is that I have lived this already, and from hindsight, see all the same signs of trouble on the horizon. I learned that you can’t be “positive” because people will either hate your for “spinning” the situation or think your are completely clueless; it’s a tough position to be in. Don’t use inane descriptors like “balanced market” or “soft landing.” Just be real and accept the current market for exactly what it is at that point. Suze Orman said something once, I don’t remember exactly what it was but she said “perception is reality, and if people perceive the market as bad, than it is bad.”
As for Miami, the worst is still ahead of us. From my calculations our “bubble” burst in April, 2005. So, it seems to me that we are almost three years into our healing process and there is no doubt that a bumpy road ahead still exists. So, all you guys up there in NYC remember: the best locations are the last to go down and the first to come up!
