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Tuesday, March 11, 2008

A Sign of the Slump?

Opinion by Guest Blogger Gregory Lobo Jost
New York City has seemed immune to the housing downturn afflicting most of the country, but there are plenty of signs that it may just be a matter of time. Foreclosure numbers continue to rise (at least in the outer-boroughs), many of the newly constructed infill housing (multiple 2- and 3-family homes on one lot) in the West Bronx sit vacant with For Sale and For Rent signs in the windows simultaneously, and now the latest from the Daily News: New housing construction down by one-third.

According to the article:

a new report from the city's housing and buildings departments shows building permit applications plunged 33% in the Bronx in 2007. Permits were issued for 3,104 new residential units in the Bronx last year, compared with 4,658 in 2006.

The ever-optimistic Borough President's Office counters that
the numbers do not represent a leveling off of local housing development, because there were still a record number of dollars invested last year — more than $925 million, compared with $713 million in 2006 and $237 million in 2002. Carrion's office said that more "substantial structures" were built in 2007 — including multi-family apartment buildings on smaller parcels of land and more elevator buildings, which cost more to build. The investment dollars also went into significant renovations of buildings. "It was a great year for housing in the Bronx — the fourth largest year in decades," said Carrion. "That's something to take notice."

Nonetheless it will be interesting to see how this plays out in the Bronx. No matter what, there will be some winners and losers. If housing prices do decline, current homeowners -- especially those in foreclosure who need to sell -- and banks will lose out. But if prices stay at the levels they are now, our affordability crisis will get worse as operating expenses like fuel and water continue to rise.


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