Hunters Point South forges ahead; Long Island City and the financial crisis

A condo glut is definitely imminent in LIC. How could it not be?

Rents are staying where they are b/c now, more than ever, people want to live here. Duane Reade, new streets and waterfront parks, increased #7 trains, wine bars, brick oven pizza places, cafes, etc.

wait… so when are the rents going down? i don’t think brick oven pizza is going to correct this financial crisis.

all joking aside, many financial experts are predicting that the housing market will bottom out in 2010. nyc, lic included, should follow suit – although to a lesser degree than the rest of the country due to foreign buyers.

http://www.bizjournals.com/nashville/stories/2008/09/22/daily35.html

Of course they do! If anything Queens has become the foreign buyers wet dream lately.

What’s usual? They’re all only a few years old. This has been predicted for over half a decade now. We all knew more buildings were going to be built and that it would take awhile to absorb all those apartments hitting the market at once. No biggie.

Hey Townie. I’ll tell you up front that I am a broker. But, I’ll give you some reality.
First, I am not a fan or a supporter of the Hunters Point South Plan- I am on the record with the City numerous times (just check the scoping session report), that I think the plan is flawed in many way, including, but not limited to:
1- Way too dense. It would take 11 buildings the size of CityLights to fulfill the goal of 5000 units. not to mention “site B”, the Budweiser plant, which would add another couple thousand.
2- This is a wasted opportunity to add much needed park space! The plan does have some park space, but much of it is shoreline and unusable.
3- The idea of subsidized rental housing is undesirable. If there are subsidies, they should be for buying apartments which fosters a whole different sense of community.
4- There is little but lip service and no real plan to deal with transportation issues, namely overcrowding on the 7 train.
These are just a few issues.
More reality- prices in LIC are coming down already. Developers can’t and won’t advertize lower prices (they would have to file amendments which would piss off people already in contract). They may not advertize it, but if you go to just about any development in LIC when you include various incentives (closing costs, closing credits, etc..) you are seeing total discounts of anywhere from 5-15% and in some isolated cases more. On average, prices have come down around 10%. So, as a buyer you have to ask yourself where the bottom would be. Is it 10%? 15%?20%? Everyone has a different idea and comfort level. If you think 10% is the number you should pounce now. If you think it’s 15%, you look for 15% and if you find it, you buy it, if not you wait.
Just my 3 cents…

Which neighborhoods will take biggest knock?

With New York City’s financial sector freefalling, real estate industry insiders are expecting price drops across the board. But certain neighborhoods will probably be hit harder than others by the chaos on Wall Street.

In the past year, the city’s financial sector has lost approximately 10,000 jobs. Last month — when it was shaken to its core with Lehman Brothers’ bankruptcy filing and purchase by Barclays, Bank of America’s acquisition of Merrill Lynch, JPMorgan’s buyout of Washington Mutual and several other emergency rescue deals — the New York State Department of Labor projected that an additional 40,000 jobs could be eliminated in the coming year.

Barry Hersh, clinical assistant professor at New York University’s Real Estate Institute, said that the direct impact of the layoffs could be felt in a wide variety of neighborhoods, especially those in close proximity to financial services firms. While the swing factor would be how many residents bought in those neighborhoods in expectation of an easy commute, neighborhoods that Hersh mentioned as possibly vulnerable include Midtown near the Plaza Hotel (where a lot of hedge funds are clustered), Long Island City, and even Hoboken.

Wall Street layoffs could surge past 200,000

By JOE BEL BRUNO – 1 day ago

NEW YORK (AP) — Traders and investment bankers might have more to worry about than dwindling bonus pools this year as mass firings on Wall Street are set to hit a record.

The fallout from this year’s global credit crisis has claimed jobs on all corners of Wall Street, from hedge fund managers to floor traders and beyond. More than 110,000 have lost their jobs so far this year, and some industry experts forecast it could come close to 200,000 before the year is over.

Even the financial industry’s biggest name isn’t immune. Goldman Sachs Group Inc., the world’s biggest investment bank, made plans on Thursday to cut 3,200 positions from its staff of 32,000. Barclays Capital is in the midst of purging 3,000 jobs as part of its takeover of Lehman Brothers, and Bank of America Corp.’s acquisition of Merrill Lynch & Co. is sure to add thousands more.

Major U.S. financial companies are getting rid of redundancies caused by this year’s rapid-fire consolidation. They are also adapting to an environment of more regulation, less risk, and dwindling profits.

“Wall Street the way we know it is frankly gone,” said Dr. Michael Williams, dean of the graduate school of business at Touro College in New York. “This was inevitable because there’s just not enough money out there to support the huge staffs these banks and investment banks had before.”

Williams and other analysts believe this next wave of cutbacks will be the biggest the American financial industry has faced since massive bank failures in the 1930s. He believes up to 250,000 financial workers — perhaps even more — could find themselves out of work by the second quarter of next year.

U.S. financial services companies have cut 111,201 positions through September, on top of 153,105 made last year, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The Securities Industry and Financial Markets Association said there are currently 867,400 people employed by their members that include securities firms, brokerages, stock exchanges, and banks.

John Challenger, chief executive of Challenger, Gray & Christmas, said layoffs will surge in the next few months as companies begin to position themselves for 2009. In addition, cutting employees before the year’s end in some cases eliminates hefty bonus payments.

“There’s been heavy layoffs already, but until you see events start to slow down, we’re not out of the woods,” he said. “These companies, even the very best of them like Goldman, are subject to the conditions of much lower activity and much less revenue.”

For the two surviving stand-alone investment banks, Golman Sachs and Morgan Stanley, the business environment might slow as they reshape themselves into companies that more closely resemble retail banks. That means they’ll be more regulated, with greater limits on their ability to take risk.

There also remains uncertainty about how many banks might fail, even with the government’s various bailouts. Banks that have heavy exposure to toxic mortgage investments and other risky bets might collapse or be acquired by healthier banks, in the next year.

Washington Mutual Corp., the Washington-based thrift, is in the process of unloading its retail branches to JPMorgan Chase & Co., and Wachovia Corp. is selling its retail network to Wells Fargo & Co. The number of jobs lost is still unknown from those transactions.

BofA’s acquisition of Merrill Lynch could result in thousands of lost jobs, especially in areas like technology, operations and finance. Both sides are still attempting to map out where the cuts will come from, and there were reports this week that Merrill had already sent pink slips to 500 or more traders in New York.

A spokeswoman for Merrill declined to comment.