Stephen G. Kliegerman
President of Development Marketing
By: Tara Lynn Wagner
The year 2008 saw prices fall and foreclosures rise, but will 2009 see the real estate market get back on track? In a word, not likely.
"We think 2009 is going to be a very difficult time," said Daniel Brodsky, Brodsky Organization.
"I think in 2009 you're going to see more weakness," said Stuart Elliot, editor of The Real Deal.
Given the end of the year numbers for 2008, it's no wonder industry insiders are worried about 2009. Elliot said 2008 saw a dramatic decline in sales across the city.
"Compared to this time last year, there are about 75 percent fewer sales so the market has sort of ground to a standstill," said Elliot.
Prices, however, are still on the move, though not in the direction real estate brokers like to see. Elliott said the latest reports show Manhattan prices down 20 percent and experts said they're likely to drop even further.
"I think we still have to bottom out another five percent in the prices," said Christine Blackburn, Senior Vice President of Douglas Elliman Prudential.
So what needs to happen to get the market back on track? Stephen Kliegerman of Halstead Property said finally acknowledging we're in a recession will help.
"Once that cat gets out of the bag, everyone's shoulders kind of relax. Everyone takes a deep breath, and says 'okay, now I know what I'm dealing with'," said Kliegerman.
Next, it's a matter of getting money moving again. Banks have lowered interest rates, but now have stricter standards for who gets a loan.
"The rates are amazing. You can get a 30-year fixed in the fours which is unbelieveable, but you still have to put 20 percent down so they haven't really solved the problem completely," said Blackburn.
With 1-in-10 homeowners across the US having trouble making their mortgage payments, Elliott said that kind of caution is understandable.
"You want people to jump back into the market, but you want those to be the right people and I think that was the lesson that was learned through this dramatic run up," said Elliot.
In the end, it may all come down to new residents and how the new administration decides to deal with the the struggling economy.
"Certainly by the end of '09 we'll begin to feel the monetary stimulus into the veins of this economy of ours so that the last part of '09 will be better than the last part of '08. I certainly think '10 will be a very solid year of recovery and on into '11 and so forth," said Larry Silverstein, President, Silverstein Properties.
"I don't believe it will bring the return of the great market that we've had in the city for so many years. But I do have great confidence. This city has always come back and it will come back again," said Brodsky.
Friday, January 02, 2009