Wednesday, November 01, 2006

Bubble Schmubble

CNN Money came out with an article that says that New York City is one of the country's top five bubble proof markets. Limited availability and the fact that the city's financial sector can't stop making tons of money seems to be big factors in their assessment.

See the details from

Top 5 Housing Bubble Proof Markets:
1. San Francisco - If developers were allowed to go all out with building on San Francisco’s Treasure Island, Presidio and the Marin Headlands across the Golden Gate Bridge, the price of housing would fall close to the cost of construction. But those pristine natural amenities are the product of one of the most anti-development political cultures in the country - and a perennial magnet for the highest earners.
2. Los Angeles - Along with San Francisco, Los Angeles was the first major metro in the United States to become “filled up” during the 1960s and 1970s because of geographic constraints and political restrictions on building. Three-quarters of new construction is now in-fill development, and much of it is high end. The gentrification is pricing out middle and lower income families, who are moving in-land.
3. Seattle - The newest graduate to join this elite class of super-expensive cities, Seattle is the least likely to hold its place. New zoning laws approved by the city council this year lift restrictions on building heights in the downtown core, and promise to generate $100 million worth of affordable housing.
4. Boston - Boston had the strongest wage growth of these cities through the tech bust and jobless recovery. Over the next five years, it will have the highest per capita income, next to San Francisco.
5. New York City - The force with which middle class households here are getting replaced by wealthier ones was reflected in the recent hysteria over the Tishman Speyer group’s $5.4-billion acquisition of 110 apartment buildings in lower Manhattan, the largest real estate deal in recent history. The apartment blocks are home to thousands of rent-controlled tenants who should have been priced out of the city years ago - and fear they now will be by market rents under the new owner.

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