NYC Housing market could stall in 2008 - Second Mortgage Rates to Increase?
A Reuter’s publication states New York’s real estate market may slow down in late 2008 if the economy along with Wallstreet doesn’t pick up. Negative press has also talked buyers into re-considering their purchase of real estate in the area due to the slowing of the economy, job-security, and the outcome of the election. Nervous buyers are “skittish” when considering dropping large money on property in NYC. Not to mention some buyers hold unrealistic prices in their minds when considering purchasing a worthwhile property.
Pamela Liebman, chief executive of the Corcoran Group, said Tuesday at the Reuters Housing Summit that a lack of supply and a surfeit of foreign buyers taking advantage of a weak U.S. dollar has meant the city has “absolutely stood alone” in skirting the nation’s decline in housing prices.
While bidding wars are less common than a year ago, Liebman said demand remains very healthy, especially for the largest, multimillion dollar apartments — but that could change.
“If Wall Street has a terrible year, and the press is really talking negative about the economy and the election, I think things could really slow down at the end of the year,” she said.
“I don’t see New York City crashing or coming to any kind of a standstill, because the product is too good and there’s too much belief in the city,” Liebman continued. “What will stall this market is a negative economy, nervousness and skittishness about job security, consumer spending, layoffs, and sellers with unrealistic prices.”
Earlier Tuesday, Jonathan Miller, director of research at Radar Logic, said at the Summit that Manhattan’s housing market was “definitely going to see weakness” within a year or two. Radar Logic tracks home price changes in 25 U.S. metropolitan areas.
News of NYC’s real estate market doesn’t come as a surprise as the entire country has seen a slow down in market over the past 2 years. Properties all over the nation have dropped in value as sellers have no choice in selling their property at a lower price to meet buyer demand. Hopefully, within the next five years, real estate market will spring back up along with the new economy brought on by the new presidential cabinet. Should the NYC market collapse however, rates for loans such as the second mortgage will certainly rise. Banks rates tend to jump as banks fail.
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