In the city that never sleeps where the real estate boom got its birth on Wall Street, Manhattan apartment and housing prices are declining at some of the fastest rates in the nation, and there's no sign they are about to bottom out soon.
Prices on apartments and condos in the Big Apple are down 20% from the markets high. On the upper-eastside a towering 30-story condo building has few lights on at night as most units sit unsold and vacant. The real estate crisis has hit New York in a big way and before it's over housing deflation is forecast by Housing Predictor to take a record tumble.
The big shoe has finally dropped. The Manhattan residential market is in a free fall after holding up longer than all other major urban markets in the country. Rents have fallen 30%, and the high-end market is about ready to take a beating above $2-million.
The swindlers on Wall Street cashed out before the bottom of the housing market dropped. The hardest hit $1-$2 million price range that got bought up by Wall Street traders will be selling for half their values by the time the deflationary cycle halts. More than 500,000 workers associated with financials have been thrown out of work and they're fleeing the Big Apple. The glorious mansions that have awesome Central Park views topping $30-million will be the last to fall, but they are forecast to fall the most in the city that never sleeps.
New York City's real estate market was bolstered by those working on Wall Street earning high commissions and record bonuses. Now, the tables have turned and The Street is hurting. Housing Predictor forecasts housing values in Manhattan to deflate 32.8% on average in 2009.
 |
| City |
Forecast |
| Manhattan |
− 32.8% |
| Long Island |
− 22.7% |
| Albany |
− 11.4% |
| Rochester |
− 10.1% |
| Glen Falls |
− 16.9% |
| Buffalo |
− 13.7% |
| Syracuse |
− 10.7% |
Few want to talk much about real estate in New York anymore, unlike the days when apartment and condo prices were rising with the speed of a jetliner taking off at Kennedy Airport. While sales on homes have risen in Florida and California because of their early deflationary spirals, Manhattan and its surrounding Burroughs will see longer lasting pain. Fewer foreign buyers are making plans to move to the Big Apple. Buyers are leaving deposits on new high-end condos in mass.
The housing crisis in New York represents just how messed up real estate markets have gotten. What started as a subprime lending problem has spread to every conventional mortgage type there is, and the deflationary spiral is only worsening. Conditions have been deteriorating for nearly a year, beginning their decline with the collapse of Lehman Brother's.
Outside of busting Manhattan on Long Island homeowners are fleeing their homes as the foreclosure epidemic takes hold. Home listings are up but sales are weak. The financial crisis is impacting the Burroughs after all the artificial money akin to Monopoly dollars manufactured on Wall Street stopped flowing.
Home sales were still moving in the artificially inflated housing markets in New York in Queens, Brooklyn, Staten Island and the Bronx, but have since slowed. Home values on Long Island are now projected to deflate an average rate of 22.7% in 2009. The Bronx, Brooklyn, Staten Island and Queens are forecast to deflate around 15.8% on average.
Upstate and in Western New York it's less painful for residents out of the hustle and bustle of big city life. In snow bound Buffalo home prices are falling with slower sales as nearly half of all sales are foreclosures. Buffalo is forecast to experience average housing deflation of 13.7% in 2009.
In Albany, the state's capitol the housing market didn't experience the double-digit appreciation during the boom of Manhattan, but as home sales slow prices are tumbling albeit at a slower rate. Average market depreciation in Albany is forecast to be 11.4% in 2009. High property taxes and increasing homeowners' insurance costs are impacting the market along with the credit crunch.
In Syracuse home prices remain comparatively reasonable, never having experienced the boom else where in the state. However, increasing job layoffs are triggering more foreclosures in the region, which will cause further price declines. The average home in Syracuse is forecast to deflate 10.7% in 2009.
In Rochester it's a feeling of less painful days from the credit crunch with slower home sales, and as a result average housing deflation is forecast to be less at 10.1% in 2009.
In Glen Falls, where the rich have bought $1-million condos, the clock is being turned back to the grave days of the 1980's when prices fell at double-digit rates. Glen Falls surged during the boom but is forecast to see average home deflation of 16.9% by year's end.
