When the bubble bursts.Visualize the huge, expanding real estate balloon being pumped with hot air by investors, developers and frivolous buyers, some of whom haven't the ability to sustain the rapidly rising prices, yet continue to feed it with hot air. This balloon has serious leaks, involving both residential and commercial markets. The trend towards no assets and little financial equity for buyers weakens the balloon and increases the potential for bankruptcies which are already at a record high. New owners who haven't established realistic long-term income strategies, interest-only mortgages and other risky financial packages sap the balloon. Financial advisors frequently counsel "use your home as equity for your kids' college education," but it can't be done with risky mortgages. Other leaks involve the questionable objectives of commercial and residential rental developers. Today's high Today's High The intra-day high trading price. Notes: In other words, this is the highest price that a stock traded at during the course of the day. More often than not this is higher than the closing price. See also: Today's Low acquisition and construction costs make rentals a poor investment. Owners can't afford vacancies for more than a couple of months. While new manufacturing and warehousing construction is declining, "Office Space for Rent" signs are increasing in number. Can owners garner the necessary rents to sustain expenses over the coming years? The answer from developers is a resounding re·sound v. re·sound·ed, re·sound·ing, re·sounds v.intr. 1. To be filled with sound; reverberate: The schoolyard resounded with the laughter of children. 2. no ... To compensate for this, they are converting huge numbers of commercial properties and even high rent housing to condos, co-ops and luxury rentals. The explosive growth of the luxury market is changing the social face of New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. ; the inflated prices and rents threaten low and middle income residents, driving out the middle class and low income populations, who are being concentrated into ever-shrinking areas, many of them in the outlying out·ly·ing adj. Relatively distant or remote from a center or middle: outlying regions. outlying Adjective far away from the main area Adj. 1. boroughs. With all the hot air, the weakened balloon will burst. When it does, the billionaire developers will walk off with the profits they have already garnered. How will the rest of the real estate industry survive the crash? They will still make money. After all, someone will have to sell and someone will be waiting to buy. There will be lots to sell at deflated de·flate v. de·flat·ed, de·flat·ing, de·flates v.tr. 1. a. To release contained air or gas from. b. To collapse by releasing contained air or gas. 2. prices, with lower commissions, but volume can compensate for that. But what will New York City look like then? Will this city become a colorless col·or·less adj. 1. Lacking color. 2. Weak in color; pallid. 3. Lacking animation, variety, or distinction; dull. See Synonyms at dull. traffic-clogged place, with wall-to-wall stadiums and massive developments, lacking the flavor of its past? It is about time that the real estate industry removes the rose-tinted glasses and takes a realistic assessment of what is happening. Remember Boom always becomes Bust, so buyers beware! THOMAS A. LAURICELLA ASSOCIATE BROKER WORKING REALTY realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . |
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