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New York and the international buyer.

New York has always been a city of international dwellers and home owners. The presence of people of all nations residing in one place, sharing schools and means of transportation while contributing to our rich cultural environment and vibrant economy, is what makes New York uniquely wonderful and alive.

And the New York of today is no different. Very simply put, the buyers of residential real estate in Manhattan today are often international buyers - from Europe, South America and Asia - and we are fortunate to have them. While they buy for very good reasons of their own, in doing, so they substantially help the economy of New York in general and the residential real estate market in particular. Contrary to what many people think, these purchasers are not just buying for investment purposes. They are often buying because they reside here either full or part-time.

While the current flow of foreign capital into the real estate market is helped along by the present exchange rate, which favors foreign currency over the U.S. dollar, it is also buoyed by the fact that New York is still a major - if not the - international capital of the world. As such, New York will always attract an international clientele. It's the "melting pot" theory applied to the 90's.

Furthermore, Manhattan is an island with limited land and space for growth and new buildings. This means that the housing stock is limited, and a curtailed supply means that there will always be a demand for housing in New York. The significance of this fact is acutely understood by the people of Tokyo, Hong Kong and Paris, who also live in crowded island cities, or cities defined by water boundaries.

What has changed in the 90's is what the buyers are purchasing, and for how much. In the golden 80's people did not mind spending top dollar for what they perceived to be top-of-the-market product. Now we are in a more humble and realistic economic climate where people are value and cost conscious. In keeping with the new buying style, people are no longer taken in by elaborate building brochures and promotional collateral materials. They seem more comfortable with a more subdued selling approach that more closely matches the new down-to-earth lifestyle of the 90's. Now, less is more. Here in the 90's all buyers - domestic and foreign - are looking for value and a favorable price.

Furthermore, the sophisticated purchaser - which most buyers are today - knows that the New York market has faltered over the last few years. While the top selling point of the 80's was "location, location, location," today's seller must complement this positive with product that is also priced right. Therefore, the successful sales formula of the 90's has become: "prime location at the right price." At Trump Palace there have been more than 100 new sales in 1992, at prices up to $750 per square foot.

Selling residential product at prices that are realistic and fair in the current market climate stimulates buying, which in turn quickens absorption. In this way, supply and demand factors start to adjust in favor of higher prices.

The "right price" sales strategy is not the only factor driving sales today. The other very key element is the fact that people perceive that the market has bottomed out, and they want to "get in" before prices increase significantly. And prices are going up. We recently instituted a price increase at Trump Palace and have already completed sales a the new pricing levels. If what is happening at Trump Palace is a microcosm of what is happening around the city, then we have reason to rejoice.

While there may still be a tendency to pine after the golden 80's, we should not lose sight of the good news before us.
COPYRIGHT 1992 Hagedorn Publication
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:evaluation of real estate market in New York, New York
Author:Banham, Judith A.
Publication:Real Estate Weekly
Date:Nov 11, 1992
Previous Article:Changing face of the mortgage market.
Next Article:Yale Robbins offering new condo sales report.

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