Just a quick snapshot of current market conditions.
While a couple of weeks do not make a trend, it does seem that Manhattan Real Estate is beginning to wake up from the Bear Stearns-inspired hibernation. What we are beginning to see from web statistics, deal flow, and client flow is that foreign investors have re-entered the market. The reason for the re-emergence is two-fold, both which relate back to the Greenback.
First, it appears that the fear factor of the US markets inspired by the financial crisis in mid-March, has worn off. Shortly after the Bear debacle, I for one, spoke to many foreign investors who were suddenly skittish and concerned about a potential dollar collapse. 10 weeks removed, it appears as if both the US financial markets, and US Dollar specifically, have stabilized (at least on a relative basis). Foreign investors stand to benefit not only from market appreciation, but Dollar appreciation as well.
Second, while the dollar is at these low levels, Manhattan Real Estate continues to look like a relative bargain compared to cities like Mumbai, London, and Moscow.
The New York market certainly faces it's challenges from a national near recession, higher than average credit spread (which is keeping rates higher they would be under ordinary circumstances), and hemorrhaging of Wall Street jobs. For the foreign investor at least, the potential double punch of price and currency appreciation is proving quite tempting.
As always, I'll keep you posted.Share