It was bound to happen sooner or later.

The real estate bust of 2008 is finally having an impact on one of the last hold outs, New York City.

Manhattan, in particular, seemed all but immune to the current subprime mortgage mess mostly because foreign buyers were able to take advantage of the declining value of the U.S. dollar.

But, now, even that bubble has apparently burst.

The Real Estate Group in New York reports that rents in Manhattan decreased last month by more than 7 percent.

The last time rents actually went down in Manhattan, George Washington was president!

Part of the reason, no doubt, is that, even in New York, there is somewhat less demand for expensive condos and co-ops leaving many to the rental market. That translates into lower prices.

According to Multi-Housing News, there are some who believe the situation in New York will now worsen..a lot.

It quotes James Hughes , dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University as saying that housing “might be twice as bad as the period after the 1980s real estate bubble.

One bright spot here…according to Huges, those who held on to their real estate property throughout the last bust and subsequent upswing saw their houses, on average, double in value.

If you're new here, you may want to subscribe to our RSS feed or sign up for our real estate social network. Thanks for visiting!

Tags: manhattan, new york city, real estate, rental, rutgers university

There is a land where the normal physics of real estate does not hold sway; a place so special, those who reside there are seemingly inoculated from the everyday concerns of mere mortals.

The housing bubble may burst; the credit may crunch; the mortgage industry may go so far south that Bolivia would be akin to the North Pole. And yet, on this special island, those charmed through luck, perseverance or family fortune can go about their lives all but oblivious to the calamity of the outside world.

That island is, of course, Manhattan. (Come on now folks, you didn’t think I was talking about Cuba, did you?? Only Michael Moore would think that!)

In a bit of understatement worthy of the Pentagon reporting Iraqi war casualties, senior brokers say Manhattan is “holding its own,” says The Real Deal, which tracks such things.

In fact, says the Real Deal article, Manhattan is “proving its exceptional nature once again.”

Duhh. Well, yeah! What else would it do? Manhattan is , as the Sunday New York Times proclaimed in its Sunday magazine section, “where the haves live!” Everyone else presumably lives in Newark or places even further from Oz.

Take just one example: According to the Times, “in the area from 56th to 59th between Madison and Park, average household income increased almost 700 (that’s seven HUNDRED) percent between 1980 and 2000.” Think that might keep real estate prices high?

Even Harlem is “special.” According to Realty Times, “Harlem is still rife with investment opportunities,” and quotes one commercial real estate agent as saying that Harlem’s “profitability has not suffered significantly…”

It is not only possible, but likely, one could spy an 18 year old emerge from a gleaming 5 million dollar one bedroom condo in the former Meat Packing district—now the “in place” to live and play in Manhattan for the under 40 crowd–affording his new abode courtesy of either wealthy parents or foreign money or both. After all, there are not many 18 year olds who can afford 5 million dollar condos on their own dime.

For real estate developers, this is great. No shortage of cash and credit bloated customers in line for Manhattan properties. Of course, this does tend to drive up costs for those who actually live on Earth as opposed to floating above it. No matter,though. What matters is, Manhattan , at the moment, is like no other place in the United States–on this charmed isle, apples fall upward once detached from trees; water flows uphill to the surprise of no one and the expectation of everyone; and the mortgage/housing/credit “crisis” is nothing more than a burp for which a bit of Alka Seltzer will set all right.

As for Brooklyn—–don’t get me started.

Tags: harlem, harlem real estate, manhattan, manhattan real estate, new york city, New York Real Estate, nyc, real estate

A few days have passed in 2007, and there are a few stories I think are worth a look. Enjoy!

• Manhattan real estate market remains strong
  The Manhattan Market is INCREDIBLE! “The average price of a Manhattan apartment rose to more than $1.14 million in the fourth quarter of last year, up 5 percent compared to the same period the year before, according to two reports released Wednesday.” In addition, “The average price per square foot in Manhattan rose to $1,050, topping $979 in the fourth quarter a year ago and setting a new high.” WOW!
• Construction activity dips as housing falls for record eighth straight month
  “Housing has been in a slump this year after a prolonged boom that was fueled by the lowest mortgage rates in more than four decades. However, that boom triggered increased speculation, driving home prices up sharply in many parts of the country.”
• 2007 Predicted to be Poor Real Estate Year in California.
• Subprime Lender Implosion: Bad Omen For Housing Market
• Foreclosures Skyrocket in 2006 according to Default Research. This is nothing new, but there are a few things in the report that are worth reading.
• “The Beginning Of The Domino” In California
  A look at how the California market is begging to topple (compiled from various news sources).

Tags: construction, estate, foot, Foreclosures, housing, manhattan, market, per, price, real, spending, square, US

When I discuss with friends about buying real estate in Manhattan, and specifically about why my husband and I have not been able to find anything for years, I always blame him (out of his earshot, of course). He happens to be one of those people who want a perfect home, and we all know that “perfect” doesn’t exist. There’s always a little compromise here and there, but most buyers end up with a home that they love, after some renovation or what not. But he is unbending in his quest. Another problem he has, when looking, is that he’s always looking to buy something for nothing. In other words, if the property is listed at $1 million, he only wants to pay $500K. And another problem he has is…. Wait, I could go on forever!

But I have to admit that I, too, have little fixations that do not help. I’m a big proponent of Feng Shui, the Chinese art of interior design and placement which theorizes that the layout of a home can influence your life. It really does make sense: a layout of a home can give it a certain energy that will affect your chi over a period of time.

There are many schools of thought in Feng Shui, but the basic premise is that different spaces and corners of your home represent different areas in your life, such as love/marriage, money, friends/helpful people, career, education, and so on. If certain corners are missing from your home (if you have an L- or T-shaped home, for example), those parts of your life can be seriously affected. That’s why the first thing I do when searching for apartments in New York is to ask the broker to send me the floor plans. I then obsessively screen for “whole” apartments: no corners missing, front door in the right place, bathrooms situated in the right place, and so on. My favorites are apartments that are completely square or rectangular. Sounds simple enough, but surprisingly hard to find in Manhattan.

By the time I’m finished with my Feng Shui screening, about 95% of the listings are tossed out. Whatever I end up with, I show to my husband, who as previously mentioned, has his own real estate pathologies. Should anyone be surprised that we haven’t yet purchased our dream home?

Tags: apartments, chinese, design, estate, feng, interior, manhattan, New, real, shui, York

For city dwellers with children, there is always this dilemma of whether one should move to the suburbs. The case for the suburbs is pretty cut and dry: there are the obvious lifestyle reasons such as more space for children to run around, and also financial ones, like being able to send kids to great public schools where you don’t have to fork out private school tuitions in the $25,000-to-$30,000 range (per child, that is).

In our family, thoughts about moving to the suburbs always lurk in the background, even as we go apartment hunting in the city. In fact, one year, the lure of the suburbs was so strong for my husband that we even went house hunting in various towns in Westchester and New Jersey. Obviously in the burbs, you get more for your money. A spacious house, a nice yard, maybe even a swimming pool if you’re lucky. The pitfalls of moving to the suburbs seem so few, aside from the inconvenience of having to drive everywhere (it’s a given anywhere else, I know, but for Manhattanites, it’s a huge deal!). And oh yes, the high taxes. This is especially true in good school districts in Westchester and Long Island.

According to the New York Times (“Leaving the City for the Schools, and Regretting It,” November 13, 2006) however, there is an interesting upward trend of people who move to suburbs like Westchester choosing to send their children to private schools. That seems to defeat the whole purpose of moving to the suburbs in the first place. The high property taxes AND the tuitions? Apparently, many of these families did not plan to do this when they moved out there but decided to do so after finding public schools a little less than ideal, even in the good districts. The common complaints are that the programs are under-funded, too many kids in each classroom (many of them unmotivated), the administration is not responsive to parents’ needs, and the list goes on.

Guess you can’t have everything, even in the burbs. I’m just glad that we are still in the city, paying just the tuitions but not the high taxes. Of course, it’s not a given that you’ll find the schools in the burbs unacceptable; plenty of families are very happy there. But there is always that “What if?” You can bet that I will be showing my husband this article every time he muses about moving out of the city.

Tags: city, estate, manhattan, New, real, schools, suburbs, Taxes, Westchester, York

Thank you, Josh, for inviting me to join the Biggerpockets.com blog community! And I also wanted to congratulate him on his recent nuptials & honeymoon to Thailand & Hong Kong. I’ve spent some time there myself, & they are such amazing places to visit, Thailand with its exquisite beaches & Hong Kong with its fast-paced vitality. Speaking of fast-paced, vital cities, I’m writing from New York. Love it or hate it, there’s always something happening here! It’s fun to be living here, & although the competitive nature of the place gets to me sometimes, I still can’t imagine living anywhere else.

New York City has probably led the country in the real estate run-up, & though many say that prices are softening, I don’t really see all that much of it. Maybe the bidding wars of years past have subsided somewhat, but prices here can still take your breath away. There’s still a lot of new construction going on, & those prices are still astounding. Here’s 2 examples of some family-size apartments in these new developments that I have personally looked at for my family of 4:

170 East End Avenue: Apt. 12 B (3 BR, 2,716 sq. ft.) at $5,395,000

310 East 53^rd St.: Apt. 11C (3BR, 2,313 sq. ft.) at $3,550,000

Both are beautiful, glass-encased beauties, with the one in midtown (E. 53rd St.) slightly priced better, probably because of its midtown location, a less residential area that is further away from most schools. The developments downtown in the financial district are priced even better, but who wants to spend the whole day in transportation in getting the kids to and from school?

Of course, when my husband & I visited the sales offices for the properties listed above, our eyes sort of just glazed over. They are so far from what we are able to afford, but yet as middle-class citizens of Manhattan, is it so ridiculous for us to be interested in a nice, new 3BR apartment? The answer, unfortunately, is yes. Meanwhile, we retreat to the comforts of our cramped rental apartment & the search continues….

Tags: city, estate, manhattan, midtown, New, real, rental, York

I wanted to extend a warm welcome to Bea Chenowitz, a new contributor to our blog. Bea is a wonderful writer from New York, and will help share her unique views of this crazed real estate market.

Here is a brief bio she threw together for us:

“I have lived in New York City for 16 years, and sadly, my number 1 passion is looking at real estate ads and going to open houses for fun. Currently living in a rental apartment after having bought and sold real estate in Manhattan, I really would like to buy something again. If I can only persuade my husband, who seems pathologically unable to pull the trigger.”

Please help make Bea feel at home here!

Tags: blogger, estate, manhattan, market, New, real, York