Property Grunt

Wednesday, February 01, 2006

Ok. Can we panic now?

It appears Bloomberg's concern regarding the New York real estate market was justified. Thanks for the tip DC.

The Mayor's office just released their preliminary budget for 2007 and the part I think you will all find a bit alarming is the section on economic growth.

Continued Economic Growth:
New York City’s economy continues to strengthen in the short-term and jobs are being created throughout the City. The Administration’s five borough economic development strategy has helped push unemployment to 5.8%, the lowest level since 2000. Wall Street’s revenues have rebounded to pre-September 11th levels, reaching $225 billion, an increase of nearly 50% between calendar year 2004 and 2005. The securities sector bonus pool is forecasted to top $20 billion in calendar year 2005 and 2006, the highest levels ever. However, rising interest rates will slow Wall Street’s advances and profits have declined this year. Visitors to New York topped 41 million in 2005 and employment in the tourism sector topped 305,000 in 2005. The City’s commercial occupancy rate is the highest in the nation. New York’s real estate market is expected to slow, however, with a 10% decline in home prices, a 14% decline in home sales over the next few years and a significant decline in real estate transaction taxes that have buoyed the City’s tax revenue in the last few fiscal years.

I dare you, I double dog dare any of you out there to say Bloomberg is wrong. I dare you to say that the Wall Street bonuses are going put some juice back into the market. I dare you to say that the spring season will rejuvenate the market. I dare you to tell me that that people including myself are a bunch of chicken littles for calling bubble. Please. Do it. Because I am in the mood put foot to ass to someone who thinks that the market is still going strong.

This reality check has been a long time coming and now is not the time to submerge ourselves in the delusions of real estate grandeur. This is the time to take a good hard look at ourselves and try to figure out a way to ride the storm. This is the time to make hard decisions.