Posted by Leonard Steinberg on September 28th, 2011
As New York luxury residential real estate construction awakes from its slumber, we should prepare ourselves for another building boom in the city. Assuming construction financing flows and no major financial or political crisis hits, this could be very good for construction employment in the city. Already, architects, engineers, lawyers, designers, etc are hard at work in the planning stages. After this comes the big push when ground is broken. These are our questions:
1) Will this sudden awakening force construction labor prices up, thereby triggering inflation?
2) Will this awakening create a commodities and material price rise and shortages as it happens almost all at once?
3) Will so much construction of high end new product result in an over-supply? (I am counting around 1,000 super-luxe units already)….and will this additional supply dampen pricing on existing inventory that may have benefitted by low inventories?
4) Will the costs of doing a simple home renovation soar?
5) Will traffic and congestion and noise, not to mention builder dust, make life in the city tougher?
6) Or will this major injection of industrial activity boost the New York economy to new heights, maybe separating it from the rest of the country’s woes?
We shall see….