Real Estate – State of the Market
Back on April 25th, I wrote an article asking you what you thought about the real estate speculation in general. See below for the original article, as well as comments.
In recent news, we had a moderate stock market fall, which some blame on real estate sales (or lack thereof).
Additionally, last week there was a report on Bloomberg.com that talked about Miami’s glut of properties which have people talking about a “recession” for the entire state of Florida.
Do any of you see any changes coming for Hoboken? What about the inventory we have? What about those failed “auctions” over at the Velocity? Is Hoboken and the NYC area immune to all of this?
Miami Condo Glut Pushes Florida’s Economy to Brink of Recession
The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida’s economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody’s Economy.com, who owns a home in Vero Beach, Florida.
“Florida is the epicenter for all the problems that exist in the housing industry,” said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. “The problems we have now are unprecedented and a lot of people will get burnt.”
Thirty-seven new high-rise condos and 20,000 new units are being built in Miami’s 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That’s the most unsold units since McCabe began tracking sales in 2002.
“Have you been to Miami lately?” Florida Governor Charlie Crist said at a homebuilders’ conference last week in Orlando. “It’s like we have a new state bird: the building crane.”
Read the rest of the Bloomberg article HERE.
See the previous update below.
4/25/2007 Original Article:
Real estate, and the economy in general is a topic of great debate these days. You have nay-sayers as well as eternal optimists trying to predict whether what some say is an artificially inflated “bubble” will burst or not.
I don’t personally have much of an opinion on this, because I believe there’s a lot of speculation as well as “spin” out there that make the future next to impossible to predict. I also believe that some of the “figures” and information provided by our government may be misleading and can result in a potentially devastating collapse if that is the case. I’ve witnessed everything from people who bought at the right time, flipped and made a tremendous profit, to those that “jumped on the bandwagon”, and are now somewhat stuck in the mud, and other followers who severely over-extended themselves (mortgage too high, or interest-only loans, etc.) due to fear or peer pressure that they may never again be able to afford housing in this area.
I hear things like “mild correction” or “the worst is over”, to “doom is coming” and “haha, you bought too soon, sucker”. I also hear many people (including real estate agents) who believe that Hoboken and the NYC metro area is somehow “immune” from any kind of problem with the real estate market. That our growth is limitless, and all the wealthy people want to live here and will continue paying the high prices until they run out of space to put new condos.
There have been heated discussions amongst my friends about the state of our economy, especially real estate. Some who believe that the market is priced so beyond reach of many middle/upper class income earners, that something is bound to happen. That the cost of real estate has far exceeded the rise in annual income levels. To others that say that the “crash” is inevitable and whomever is “in charge” is just delaying that horrible moment. And of course, those that believe that indeed our area is immune to a disastrous crash, and lavish in the massive profits they’ve made, and continue to make. “The rich get richer”.
So what is happening here? A sweeping change of economic class in the tri-state area? That “seven-figure-income” is now the new “middle class”? That all $75k-$125k earners will have to leave the region in search of affordable housing? Even a recent council candidate mentioned that current “middle class” earners are running out of options in Hoboken and nearby cities, that it’s either 1.5 million dollar condos, or poor subsidized housing.
What are your thoughts? Where Hoboken be in 1 year, 5 years, or 10 years?
Here are some recent links:
- Plunge in Existing-Home Sales Is Steepest Since ’89 (NY Times)
- New Jersey Real Estate Report (blog)
- Manhattan Beach Real Estate Bubble (SoCal blog)
And back before Hoboken411 had huge daily readership, the topic of local real estate conditions came up much more frequently than politics. Some examples: