Sang

Condos are at the peak right now and coops have already fallen.

The recent credit and stock market meltdown, and more importantly, the bursting of the leveraged buyout bubble and collapsing hedge funds will significantly reduce the bonus pool this year.

Additionally, the weak Dollar is already strengthening due to unwinding carry trades resulting from risk aversion by fund managers. A strong Dollar is not good for foreign real estate buyers.

Condos have held up longer than coops because most foreigners don't purchase coops due to board regulations. So foreigners have been purchasing and selling these condos to each other, driving prices up.

However, with the strong Dollar, these foreigners will see their currency driven discounts diminish.

In other words, the Manhattan real estate market, which has been strong while the rest of the nation suffered, is about to get its first real dose of reality- with more to follow.

The nationwide real estate bust has impacted Wall Street, with ripple effect from the subprime fallout still working its way through the system. Wall Street has finally been affected, and the next to follow will be the economy's indicators. If one looks at the data, one will quickly realize that we have not reached the peak in terms of sub-prime and ARM resets- that is due later, and the current rate will increase until that point. In other words, the worst is not over, and if Wall Street dropping over 500 points in a week is any indication of what's to come, it would be prudent to wait and see what the effect Wall Street falling will do the this local market.

MMAfia - Sat Jul 28 2007, 20:00