2008 Predictions

It's been an interesting year since my last predictions. For the most part the market performed pretty much as speculated. In retrospect it was pretty easy predict the market selloff. Predicting the bottom might prove a more complex task. At any rate here are my predictions for 2008.

1. Prices in the aggregate continue to decrease. The slow deflation of values continues with the distressed properties leading the way.
   
   
2. The new developments, Electra, Aria, The Mark, SmartCorner and Alta continue to have relatively large ready for sale and unoccupied units that slowly get occupied via sales or rental programs. Back in the "old" days it was normal for a new condominium project to have unsold units that were available for immediate move in. This was why the early phase people got a relative bargain. This relationship got pretty warped during the bubble and to some degree the standing inventory may point to a return of the normal pre-bubble relationships returning which is a good thing.


3. A bottom isn't reached in 2008 however relative bargains that have seen most of their deprecation start to become interesting.


4. In the broader market the concept of cash flow positive/neutral rental property starts to become more realistic. I'm planning on doing some analysis in this area to see what things are like today and what price action is needed for this to start making sense. If anyone has any specific examples post them or email them over as this may be an interesting topic to revisit over the course of the year.
   


5. Wildcards that could factor significantly into the market include the increase of the conforming loan amounts, recovery or yet another leg down in the credit markets, the prospects of a recession and inflationary pressures driving interest rates higher.

The market will remain worth watching. Downtown will continue to grow in other areas like hotels, rental apartments, office and entertainment which will help create an even better environment that will pair up nicely with reduced prices.

Another La Vita Unit Close to Developer Price

La Vita is a middle market property in Little Italy. Built by Intergulf.

Unit #1508 which is a nice northeast view two bedroom recently closed for $525,000, previously sold for over $700,000.

Keep in mind that the developer prices for La Vita were set at least a year before the initial closings took place in early 2005.