Wednesday, October 1, 2008

Manhattan real estate market cools

After seven years of nonstop construction, skyrocketing...sales prices, ... the credit crisis and the turmoil on Wall Street are bringing New York’s real estate boom to an end.

...Developers are complaining that lenders are now refusing to finance projects that were all but certain months or even weeks ago.


...Examples of aborted deals and troubled developments abound. Last Friday,
HSBC, the big Hong Kong-based bank, quietly tore up an agreement to move its American headquarters to 7 World Trade Center after bids for its existing home at 452 Fifth Avenue, between 39th and 40th Streets, came in 30 percent lower than the $600 million it wanted for the property.

...Barry M. Gosin, chief executive of Newmark Knight Frank, a national real estate firm based in New York, said: “Today, the entire financial system needs a lubricant. It’s kind of like driving your car after running out of oil and the engine seizes up. If there’s no liquidity and no financing, everything seizes up.”

...“Any continued impediment to the credit markets is awful for the national economy, but it’s more awful for New York,” said Richard Lefrak, patriarch of a fourth-generation real estate family that owns office buildings and apartment houses in New York and New Jersey.

“This is the company town for money,” he said. “If there’s no liquidity in the system, it exacerbates the problems. It’s going to have a serious effect on the local economy and real estate values.”*

The New York Times

Oct 1, 2008

My question: Does it get worse before it gets better?

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