Housing Bust to Hit Manhattan, Hamptons

nycv-skylineManhattan has — so far — mostly escaped the housing bust.

Some of that is a function of the lack of honest real estate sales reporting in Manhattan, where MLS holds no sway, and the oligopoly of Real Estate agencies are notorious data shills (more on this at a later date).

And the second home market in the Hamptons is also showing signs of distress.

Will Wall Street’s epicenter get hit as badly as the “sand” states?

Reuters:

“New York City real estate prices are looking increasingly shaky as instability in two of the city’s sexier submarkets — second homes in the Hamptons, and new condos in Manhattan — register the latest signs of a housing downturn.

Property prices in the Hamptons, a fabled playground of the rich on nearby Long Island, rose steadily for almost two decades, but the prices on almost 1-in-3 of current listings have been cut an average 11 percent from the initial asking, said Sofia Kim of real estate website StreetEasy.com.

Back in town, the number of sales in new developments dropped a whopping 71 percent in April from a year earlier as condo developers enmeshed in complicated financing arrangements have been slow to slash prices even as the market corrected all around them, Kim said.

But if prices on these new condo towers do not fall to match the rest of the market and stay empty as a result, then it could eventually trigger foreclosures of entire properties, forcing much bigger price cuts as lenders seek to reduce their liability.”

During the boom, the Coop/Condo financial requirements avoided speculators excesses. Now, its the economy and the collapse of Wall Street threatening the RE market . . .

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Source:
Is the housing bust about to take Manhattan?
Helen Chernikoff
Reuters, Jun 14, 2009 3:34pm EDT
http://www.reuters.com/article/newsOne/idUSTRE55D1ON20090614

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