New York is poised for one of the greatest building booms of all time in 2013, fueled by the awakening sleeping giant of residential new construction. There are literally hundreds of buildings where already the roar of machinery and activity are firing up. This is what I predict as a result of the 2013 NEW YORK BUILDING BOOM:
1) With this very sudden burst of energy, finding skilled (and less skilled) construction workers will become tougher and more expensive, but unemployment will drop.
2) Materials will become more expensive as masses of Sub Zero refridgerators, Miele stoves, hardwood floors, sheetrock, steel, concrete, glass, etc, etc will be needed almost all at once.
3) I predict an individual renovation will be about 10% more expensive in 2013.
4) Construction noise will torture us all, not to mention traffic congestion caused by the numerous constructions sites. And these sites start early.
5) Lawsuits will rise as neighboring buildings, workers, passers by, contractors, developers, brokers and all those affected by the 2013 CONSTRUCTION BOOM will seek financial gain.
6) The City will see a surge in real estate transfer taxes (later of course when these units close) and then real estate taxes…..this could impact revenues very positively and mor immedfiately this time….without 421-A tax abatements, the real estate taxes will be high and immediate.
7) I see a large, bold, class action suit being filed by new condo owners who (rightfully) feel they are being unfairly assessed. Now it will be more obvious without the abatement programs disguising this injustice.
8) Real etstate prices for new condominium buildings will rise noticeably: its happening already.
9) All this activity will be good for the economy overall, lowering unemployment, creating more consumer dollars, and stimulte spending.
10) More people who lost jobs in other industires will become real estate brokers in an attempt to cash in on the get-rich-quick mood that will emerge.
11) While $ 2,000/sf is the new $ 1,000/sf, will 4% be the new 3% or 2,5% commission currently being paid by the few new development buildings on the market? They probably won’t have any option as the competition grows.
12) If you think the DOB is slow now, brace yourself for an even slower government process. Remember they cut back their staffing during the recession, so knowledgeable service will be in short supply.
THE SCARY PART: Hopefully this, combined with other increasing prices, doesn’t fuel inflation too much (its here already, btw!) so that the city becomes even less affordable for many.