2011 came and went in a flash; however, this was one of the most interesting years in the market that I can recall. With the Dow jumping up and down like a roller coster, with a difference of a 1000 points in the last two weeks alone, investors are more unsure than ever. If you live outside of New York City, things look largely the same or worse. Foreclosures continue to ravage suburban and rural areas outside of the major metropolis' of our country. But New York, once again, continues to shock...
Everyday on my way to work, I have been passing the construction site of a rather large nature, with the building being worked on going up at an extraordinary rate. Sitting down at our weekly meeting one Monday, our broker let us in on what exactly was going on over there. The building will be called One 57 (for 157 west 57th st) and is under the umbrella of Extell Development. It is going to be half hotel and half condo's. The reason this building is different than any other construction going on in the city right now, is because it is obvious that the brain child of this operation had the goal of building the most extravagant, tallest, and ostentatious residential building in the city.
Are you ready for the prices? For the pleasure of living in the city's most desired new development, be ready to dish out anywhere from 3 to 98.5 million dollars, with one bedrooms starting at 3 million and all 6 penthouses going for 98.5 million each; and guess what, they've already started to sell and close deals.
What does this tell us about the market? It tells us that New York, in 2012, intends to increase the value of it's housing to the type of numbers we were seeing prior to meltdown of 2008, inflation not included. The original benchmark one would use to determine the state of real estate in New York, in my opinion, was the penthouse at the top of the Time Warner Center. In 2008, before the meltdown, it was going for a whopping 60 million dollars, at the time, the most expensive apartment in the US. After the meltdown, the price was dropped to 41 million. What's the price this year? That's right. It's back up to 60. Not only that, it now has One 57 to compete with a few blocks away!
You remember all those real estate agents telling you to buy last year, that everything was headed up in this city, that our bubble doesn't burst? They were right. You still have a chance to get out there and hop back on the train, and your share doesn't have to be some 98 million dollar penthouse with the best views in the city. In fact, the apartments going for 500,000 to 10 Million dollars are much safer investments. Think about what's going to happen in this city! What's going to change, where is the city moving upwards? There's a million dollar one bedroom across the street from One 57? Sounds like a good investment to me. A lot of vacancies on second ave, where the new subway line is being built? I bet those property values will rise after that subway is there!
Stop fooling around on the stock market with short selling and hedging your bets on what the next bubble is going to be and invest in something real, something that moves with the price of inflation. Real estate is the still the safest investment that one can make these days. The only difference now is that we have to be a little more cautious of where we decide to invest.
