Tuesday, July 15th, 2008
The housing crisis we keep hearing about is being reported almost entirely from the vantage point of speculators and sellers. But if you are a young couple starting out in life, seeking to buy your first apartment or home, why is it a crisis if the housing market is in a recession, prices dive and you can suddenly afford to buy?
The great Jewish renaissance on the Upper West Side that began in the 1960s and ’70s was, to a large extent, the result of a depression in the West Side housing market. Young people, fresh out of college and graduate school; artists; writers; academics; young marrieds; and civic servants were able to move into large apartments on West End Avenue and its side streets at very low rents. These were the people who formed the core of Lincoln Square Synagogue in its heyday, who gave Shlomo Carlebach the congregation he deserved on 79th Street, who revived Anschei Chesed, who developed what was arguably the most creative, religiously and intellectually stimulating Jewish neighborhood in New York City in the last century or any other century.
What we’re seeing in New York City is not a crisis but a correction, the first price declines in a decade. According to a recent article in The Sun, “The slowdown spells trouble for next year,” said an appraiser for Prudential Douglas Elliman. “Unless the credit crunch lessens… it will have the effect of tempering prices.”
Whose “trouble” is that? If you’re selling, it’s trouble. If you’re buying, it would have been trouble if prices kept rising as dramatically as they had been.
Again, according to date acquired by The Sun, “the average sales price of condominiums and cooperative apartments fell between 1% and 3% versus last quarter, but jumped between 25% and 36% from a year ago.” That inflation was a crisis for buyers. Who cried for them?
According to the Associated Press, the National Association of Realtors reported that in May, “Sales went up 2 percent… The median sales price, however, fell to $208,600, down 6.3 percent from a year ago. That was the fifth biggest year-over-year price decline in records that go back to 1999.”
That’s right, based on records that go all the way back, um, less than a decade. “Fifth biggest” in a decade seems to be just about right, Goldilocks, not too hot, not too cold. Exactly how would this be a crisis in a non-election year?
The Wall Street Journal noted (June 26) that Rep. Barney Frank, author of Congress’s $300 billion housing bailout, said, “Having Bank of America buy up Countrywide is a good thing for America.”
The Democrat from Massachusetts may be right about Bank of America’s better management, said the Journal’s editors, “but there’s no doubt his legislation is very good for both Countrywide and B-of-A. Thanks to this bailout that is now on the Senate floor, taxpayers could end up on the hook for more than $25 billion in loans originated by Countrywide.”
Whose crisis is that, except those whose taxes will pay for the bailout?
Before you cry for those apartment owners in Manhattan who might be suffering through a housing crisis that might shave a few thousand off a price in the high six-figures, even seven-figures, check out this piece in the Times to see what co-ops were being sold for just thirty years ago.
The Upper West Side became one of the greatest Jewish neighborhoods ever — pre-war Europe and modern Israel included – because rents were in free fall. The Zionist revival got going because JNF “blue box” nickels and dimes were able to buy up what is now the State of Israel at depressed prices. Every crisis has its blessing. To twist the Grateful Dead, one man’s touch of grey is another’s silver lining.