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How Speculation is Affecting the Manhattan Apartment Market

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  • Rick | | 17 Dec 2012, 05:59 PM Agree 0
    The only thing speculative here is the reporter's comments. I rent out apartments in the Manhattan market - the blogger appears to have not done any research whatsoever (and doesn't even provide the Fed statistics supposedly supporting his argument). He also ignores the impact of co-operative boards and the restricted nature of this form of housing, as well as the impact of foreign buyers and corporate buyers who may also have homes elsewhere. Manhattan has a unique housing stock mix, with co-ops, condos, brownstones, restrictive rental opportunities between rent-control, rent stabilization, income-restricted co-ops and other subsidized housing, with a wide range of buyer motivations. Also, apartment prices trend differently depending on neighborhood, housing stock ( type and quality) and unit size. To say that the market is speculative, artificial (what does that mean??) and overvalued now and for the past twenty years, is unsupported speculation. It betrays the writer's lack of detailed knowledge about this nuanced and dynamic market. The writer displays a sophmoric grasp of market fundamentals, perhaps betrayed by his comment that this is a "lucrative" market. On what planet can he make that claim? Lucrative for whom? The seller - not necessarily. Like any other, this market has its ups and downs and whether you gain or lose depends on when you bought and when you sold. In addition becuase of the high mix of co-operatives, unit turnover can actually be quite low. Immutable law of markets, any market. This article would never have made it into a publication I would edit. It is not good journalism.
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