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Oshrat Carmiel, a reporter for Bloomberg and a good friend of mine, wrote an interesting story last week about the potentially devastating impact that the the expected reduction in Wall Street bonuses could have on Manhattan real estate.
Sam Chandan, Real Estate Economics’ chief economist, told her that a 50% decline in bonuses could result in a 20% to 24% drop in home prices. Prices have already fallen 15%, Chanden said.
Jonathan Miller, co-founder and President/CEO of Miller Samuel, told me recently that he thinks Manhattan prices have already fallen more than 20%.
Prices in Manhattan have a long way to fall. The median home in Manhattan was $955,000 in the fourth quarter of last year, Miller said.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.