Monday, October 3, 2011

New York Exceptionalism

American debt has been downgraded. Has Manhattan real estate? A data-driven review.

We know the eurozone is barely hanging on, job reports are terrible, and nobody’s hiring. What we don’t know—because it typically takes a few months to become evident—is what all of this means for New York real estate. Is this a moment to buy? To sell? To panic-sell? In the weeks after the Standard & Poor’s downgrade, we asked a wide range of brokers, analysts, and executives to size things up. As you’d expect, they more or less fell into two camps—the ups and the downs—but their opinions tended to funnel down to one conclusion.

From the optimists: “In my opinion, we’ve already come off the bottom,” declares Barbara Corcoran, founder of the Corcoran Group and commentator for the T­oday show. She says newcomers are still pouring in, especially from China and Brazil, and that those wealthy buyers are indifferent to the downturn. She’s backed up by Victor Calanog, chief economist at the analytics firm Reis, who’s seeing “large transactions that seem to defy gravity.” (A penthouse just sold on First Avenue—that’s First, not Fifth—for $11.025 million.)

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