H OUSING N EWS R EPORT
builders pulled only 3,550 permits. Last year, developers were issued 13,386 new home building permits, according to the Census Bureau. Yet the shortfall of housing is such that even this building boom may not seriously dent prices. “We saw this coming two years ago,” said Congi, pointing to new developments like the twin towers at Infinity , 181 Freemont and One Mission Bay. “You have all these new projects coming on. That’s going to affect the re-sale market and boost prices.” Rising home prices have lured big developers, even Chinese builders. Beijing-based Oceanwide Holdings Group, for example, is planning to build the second-tallest tower in San Francisco. The $1.6 billion mega project will add 2 million square feet of office, retail, residential and hotel space to the south of Market Street area (SOMA) of San Francisco, according to ChinaSF, a nonprofit that promotes economic ties between the city and China and is part of the city’s Office of Economic and Workforce Development.
turn for the worse in San Francisco, workers would move out.”
New York Sand Castles
Like San Francisco, Manhattan’s real estate market has been sizzling for several years. But now cracks are starting to show in the once red-hot real estate landscape. Price growth is starting to slow amid concerns of a supply glut, particularly in the $5 million and above luxury market. Inventory is rising and the global economy is starting to show signs of strain. According to New York University’s Furman Center for Real Estate and Urban Policy, New York City has a history of real estate booms and busts. Over the last 45 years, New York City housing prices have experienced three boom cycles of rising home prices — 1980 to 1989,1996 to 2006 and 2012 to the present — and two downward bust cycles — 1974 to 1980 and 1989 to 1996.
Lawrence Yun Chief Economist National Association of Realtors Washington, D.C. “ San Francisco is one market to watch. If something would turn for the worse in San Francisco, workers would move out. ”
“While there is no crystal ball to predict how bad this downturn will be or which neighborhoods will be hit hardest, history can provide some helpful context,” said the Furman report. In the early 1970s, racked by rampant crime and poverty, New York City came close to bankruptcy. The economic crisis of the early 1970s overwhelmed the city. The stock market crashed, oil prices plunged and unemployment soared. The social problems sparked by the economic crisis resulted in widespread urban flight as 800,000 people fled the inner city, and home prices dropped 12.4 percent, reports the Furman Center. Today, after years of dizzying appreciation, the Manhattan home values are plateauing and in some cases — especially in the luxury high-end condo market above $5 million—plunging in some areas, experts claim. Inventories are swelling, prices are being cut and some properties are going unsold. “If you are a seller in the super luxury sector trying to flip a $20 million condo you bought in 2012, you will definitely be noticing a change in the marketplace,” wrote Noah Rosenblatt, CEO at Continued Next Page
Nearby, several other condo towers have sprouted up or are being built in SOMA — including the twin towers of Lumina, the 60-story Millennium Tower, and One Rincon Hill. In all, approximately 62,500 units of all kind — luxury condos, rental apartments, market rate and affordable units — are in the pipeline, according to the San Francisco Planning Department. “San Francisco has really changed since I was a kid in the early 1960s,” said Congi, a life-long resident of the Bay Area. “I still live in San Francisco; it’s a great place to live. If you can find a more resilient market than San Francisco, I want to hear about it.” Lawrence Yun, chief economist of the National Association of Realtors, worries about over-priced coastal markets like San Francisco. “San Francisco is one market to watch,” said Yun, speaking recently at the National Association of Real Estate Editors conference in New Orleans, Louisiana. “If something would
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