Bubble Wrap: October 2008

Up Against the Wall

The NY Post reports on the state of the Jersey City condo market as sales have slowed significantly and developers have increased their incentives, such as free parking, covered transfer taxes, and closing costs.

But there are signs of hope in Jersey City. Near the Grove Street PATH station is Ivy House, a boutique condo building from Fields Development Group and TreeTop Development, which has sold 15 of its 18 units since going on sale at the beginning of July. With prices around $500 per square foot, the units are aimed at entry-level buyers, a demographic, says Fields principal James Caulfield, that’s been under-served by new construction.

Plaza pain

As a possible sign the times of high flying flips may be coming to an end, the Post’s Braden Keil reports that a buyer at The Plaza is ready to take a loss.

One Plaza buyer is now ready to take a loss on his investment. Oscar Schafer, the managing partner of OSS Capital Management, has lowered the price of his 17th-floor, three-bedroom condo from its $18 million June price to $14.5 million.

Buying From the Glut

New York Magazine has surveyed many new condo buildings sitting on the market and questions whether you should steer clear, or bargain hunt.

But is it a good time to be a buyer? Is that gleaming, empty tower in your neighborhood a white elephant—or a bargain buy? The buildings below are, to varying degrees, selling slowly or not at all. (They range from a $325,000 one-bedroom in Brooklyn to a $6.8 million East Side penthouse.) We’ve taken the market’s temperature, neighborhood by neighborhood, based on data from Streeteasy.com and talks with experts of every kind. And wherever you’re shopping, remember that long-term buys are inherently safer at a time like this. The era of the quick profitable flip is over.

Jersey City's Boom Is Set Back

The Wall Street Journal reports on the ascension of Jersey City and what ramifications the current economic crises could have on real estate and development.

The biggest residential boom in the Garden State city’s history brought in thousands of residential units in recent years, and another 72,000 could come by 2050. Big brands including Trump, Toll Brothers Inc. and Hovnanian Enterprises Inc. have put their stamps on the burgeoning skyline.

The boom, however, comes as the worst housing correction in decades has turned into a credit crisis that has seen some of the financial sector’s most storied names, such as Bear Stearns and Lehman Brothers, crumble along with thousands of white-collar jobs.

Housing Recession Approaches Manhattan as Nearby Prices Fall

Bloomberg reports on the falling housing prices in the boroughs, with many down over 10%, and experts are predicting Manhattan will soon follow.

“The storm is going to engulf Manhattan,” said Mark Zandi, chief economist for Moody’s Economy.com. “It has held up well to this point for two reasons: one, global investor demand for everything New York, and second, the problems on Wall Street have only now really begun to impact jobs.”

Big Real Estate Would Love Bloomberg Triplex

The Observer spoke with many in the real estate industry, who are all for Bloomberg seeking a third term, with praises from residential and commercial insiders.

First off, he’s been a very pro-business, pro-real estate mayor. The expansion of 421a development tax abatement exclusionary zones aside – (Robert Knakal, chairman of Massey Knakal and another mayoral fan, pointed out no one is perfect)- the powerful Real Estate Board of New York has long held Mayor Bloomberg in a favorable light.

And, given recent events on Wall Street, real estate types would prefer a businessman like themselves take care of New York City. (Far easier to trust a businessman, after all, than an activist or, even worse, a lifelong politician.)