Bubble Wrap: September 2006

Surprise! Home Prices Down

The NY Times covers the National Association of Realtors home sales report. After 11 years of of increases, the median price of an existing home is finally down compared to the same period last year.

David Lereah, chief economist of the association, said he expects prices to continue to fall. “We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market,” he said in a written statement. “This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”

Early next year? That sounds nice, if not a bit optimistic.

“With inventory still rising, there is no chance of any short-term relief” for sellers, said Ian Shepherdson, chief United States economist with High Frequency Economics. “Prices and volumes have a long way to fall yet.”

Back to square one for Govs Island

Crain’s New York Business reports Governors Island proposals to be trashed

Insiders say that the Governors Island Preservation and Education Corp. plans to throw out all the master-plan bids it received to redevelop the former military base because the costs are too high.

The city-state agency pared the 25-bidder list to 10 last month, including a proposal by cable network Nickelodeon to build a theme park and resort.

However, GIPEC officials realized that all of the projects would require substantial government subsidies, given the transportation needs and the deed requirements to retain and maintain old buildings.

Where are all the rentals?

The Real Deal covers CitiHabitats latest rental report in Rental vacancy rate rests below 1 percent

As Manhattan enters the usually frenzied fall rental season, prospective tenants and their brokers will find themselves grappling with a borough-wide vacancy rate that remains below 1 percent.

The vacancy rate for Manhattan rental apartments was 0.76 percent by the end of August, according to a report released on Monday by brokerage Citi Habitats.