Housing market weathered storm.
Speaking at the New York Times-organized panel discussion "The Residential Real Estate Market and Consumer Trends," Barbara Corcoran, president of The Corcoran Group, cited low interest rates and an aggressive advertisement campaign as reasons for the continued interest in New York City.
"After September we took a short breath, but the market never broke stride," she said. "Now we have a lot of capital running away from the stock market, we have cheap money, and a $1 billion ad campaign that brought in people from outside New York."
Steven Spinola, president of the Real Estate Board of New York, agreed that the demand for housing in the city has continued to be strong.
"We've never had enough housing in New York," he noted. "So our vacancy rate right now is still under 5%. That's good news because when the economy starts the shrink, the impact on real estate is not as great. My feeling is that New York can withstand basically anything."
At the same time, most of the panelists mentioned massive layoffs and the city's budget deficit as signs that there may be problems ahead.
"There are two different residential markets -- the sales market and the rental market," explained Daniel Brodsky, president of The Brodsky Organization. "The rental market is driven by jobs. And even though it is still very stable, I'm worried about it. Credit Suisse First Boston just eliminated some jobs, Wall Street has fired some people -- that can't fare well with the rental market."
However, Brodsky was very optimistic about the future of Downtown and Battery Park City, an area where his company owns some apartment buildings.
"People consider three basic factors when getting an apartment -- the price, the location, and the quality of the housing," he said. "We lowered our rents Downtown, so it has become less expensive for people to move there. Now the number of vacant apartments in our buildings has changed from 35 to five. My sense is that the quality of life in the city went up dramatically in the past 10 years and people are still responding to that."
When asked whether they think Lower Manhattan would emerge as a viable residential community in the next several years, all of the panelists expressed confidence that it would.
"As sad as it is, I don't think in 10 years people will even remember what happened there," said Corcoran. "Nothing will change, there, except that we will see even more aggressive development."
Dennis Hevesi, a real estate reporter for The New York Times, pointed to the Lower East Side and the Bowery as the indicators of how Downtown is fairing in terms of the residential demand.
"I just did an article about the gentrification' of the Bowery -- there are luxury apartment buildings going up there," he said. "Downtown is certainly going to look different in a few years. Hopefully, the demand will be there as well."
In speaking about neighborhoods that are currently emerging as trendy residential areas, Brodsky and Spinola mentioned the West Side of Manhattan and the 23rd Street to 42nd Street stretch.
"Residential development will go wherever there is an improvement in transportation and gentrification going on," Spinola said. "The mayor is committed to bringing the #7 subway line to the West Side and we have new zoning, so that will open the neighborhood up.
Corcoran mentioned Harlem as a possible future gold mine.
"The earliest sign of what's going to happen to a neighborhood is seeing young gay people moving there," she said. "And you see that in Harlem."
Overall, the panelists seemed confident that New York is going to survive its fiscal crisis and will continue to be one of the most overcrowded cities in the world.
"There are some dangers for the future," Spinola said. "New York can withstand a $2 billion deficit for one year, but I don't know about two years in a row. We will have to see if the mayor's current strategies work. But we've had eight great years that had given people confidence in this city. So I am optimistic."
The discussion, which was hosted by New York University, took place on Apr. 4.
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|Title Annotation:||following September 11th|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Apr 10, 2002|
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