Manhattan – finally property prices down

If the effects of the financial earthquake were felt so acutely world over; can one imagine what it would have done to the epicenter – Manhattan? Rated amongst the costliest place on earth, the realty sector is expected to take a turn for the worse in the aftermath of the collapse of the American financial system. Even when prices of homes all across USA were falling, Manhattan, like Mumbai, is treated unique and usually, nothing affects it. But finally it too has got caught in the whirlpool. Residential house prices have fallen 19% across the US and are down 10% in New York. And now with more jobs being lost on Wall Street, Manhattan is expected to see a more steep fall. Job losses would mean more properties would come into the market and fewer people being able to get the finance to buy.


A New York based a real estate appraiser stated that a large number of deals are falling through and one in three new apartments in Manhattan are sold to foreigners, primarily Western Europeans.

In the commercial sector, the property expected to come into the market is huge. AIG has more than 53m sq ft of commercial property around the world, including its global headquarters in Manhattan which is an historic 66 storey 1930s building. Lehman would be liquidating everything it has and this includes its land in California to apartment buildings in Boston and New York. According to a projection released by Property & Portfolio Research Inc, in a worst-case scenario, in the New York region, commercial vacancy rates will hit 19% by 2011 and values will scale back over 13% through 2009.

Well, Manhattan alone is responsible for the state of the world today, so to some extent it would not be too selfish to feel vindicated.
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