This morning, the New York Times published a report on the decline of development in the city that was written in such somber tones that it read like a eulogy to the real-estate bubble.
Developers are complaining that lenders are now refusing to finance projects that were all but certain months or even weeks ago. Landlords bewail their inability to refinance skyscrapers with blue-chip tenants. And corporations are afraid to relocate within Manhattan for fear of making the wrong move if rents fall or a flagging economy forces layoffs.
It's like this was an obituary they already had written, and were just waiting for our real-estate market to die to publish it. Apparently we should expect far fewer big developments here in the near future, which is bad news for construction workers and city tax income, and also a bummer for Michael Bloomberg, the development-eager mayor who will be seeking a third term amid all of this. (Don't expect to see the Hudson Yards, Penn Station, or Coney Island revamped anytime soon.) Rents are falling, and gentrification will soon slow in neighborhoods like Harlem, the Lower East Side, and Fort Greene. Megadeveloper Tishman Speyer is facing serious trouble over their $5.4 billion purchase of Stuyvesant Town and Peter Cooper Village, as the S&P dropped its rating on their bonds, the properties' value is down 10 percent, and they are running low on cash.
The Post has a similar report that could at least mean good news for home buyers (you know, those that can get mortgages), but bad news for families whose homes are their main source of equity. Apparently the price of single-family homes in the five boroughs and surrounding suburbs dropped 7.4 percent over the last year (ending in July). According to an S&P study, housing prices dropped in all twenty American cities surveyed. New York has been one of the least hard-hit so far — Las Vegas, Phoenix, and Miami saw much steeper declines in single-family home prices.
We take this last piece of information as small solace amid all this bad news, because the age-old adage has held true: Things may be bad, but at least you don't live in Phoenix.