Bon jour and welcome to my blog
I do not believe that I can consider myself an expert but I do have ideas and I would like nothing more than an intellectual exchange not only on real estate but also of business and the economy as a whole. So here goes.
I do not believe that the subprime issue is over. Citibank’s announcement today that it will write down $500 billion, that’s half a trillion, in assets over the next X number of years and AIG’s $7 billion write down are just two indications of this issue. I do not know if Met Life and Prudential also has this issue but if they do, it will be interesting to know the amounts involve. How does that affect real estate in Edgewater, in particular, and the Hudson county, in general? Well, the last couple of years has seen the development of high-end condos in the area whereas as late as 8 years ago, there was none.
How it will affect pricing will be very interesting. We are already seeing Miami condos that would have sold for $750K or more getting reduced by 20% or so. And there are still a lot of unsolds. Perhaps, because of the Edgewater and the surrounding areas’ proximity to NYC, the prices will not be reduced by that much. But if UBS and the other investment banking and financial related firms continue to cut jobs, who can buy these condos? I think the economics law of supply and demand will then prevail.
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