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July 21, 2015- We have previously reported how the majority of owners of new condo units in the pencil-towers going up everywhere will be absentee investors not actually using the apartments. Foreigners need safe havens for their cash and U.S. real state is one place for it.
Now, it seems that the demand for condos is falling off, increasing the likelihood that those new pencil-towers will all be empty.
The WSJ reports, “With the housing market in its fourth year of recovery, construction of single-family homes and multifamily rentals is rebounding. Not so for condo construction, which has been slammed by tough rules on condo mortgages enacted after the housing bust as well as stronger demand among young people for rentals and tight lending conditions for builders. In the first quarter, condo construction accounted for just 5.5% of all construction of multifamily housing in the U.S. That was the lowest ratio since the Commerce Department started tracking the figures in 1974, and far below the 24% average.”.
I love your site, especially exposing all the corruption and funny business going on with CB1 and the Battery Park Authority. But I completely disagree with your view on Manhattan real estate. We are not going to have a crash and doubt any correction is more than 5%.
Also, your representation of the WSJ article is very misleading as it is primarily talking about real estate outside of affluent cities such as Miami and New York. It explicitly states that the condo market in those cities is actually strong in part due to foreign money.
I really like your passion, but I think it takes away from your credibility when you stretch the truth or cite sources that don’t really fit your narrative.
– Avid reader Phil
“We are not going to have a crash ” . . . I heard that in 2008 . . . and 2000 . . . and 1987
Really Callahan? Tell me about the big hit you took on your condo value in any one of those years. I’m pretty sure you and the rest of property owning New Yorker’s are just fine. NYC property values are historically resilient due to foreign investment and limited space.