Fannie Maeyesterday informed the banking industry that it would raise the nationwide pre-sale requirements for new co-ops and condominium buildings to 70 percent starting March 1, one of several changes designed to reduce the amount of risky consumer loans in the market...
GASP! for all the new developments all of United States, and the outburst of tears from New York City New Developments! It is just like yesterday that Manhattan New Development was the hottest item on the Real Estate scene, buyers lined up outside of the sales office waiting to get in, everyone is anxious to get on the 'preferential' or 'friends and family' list of the developer to get an apartment at initial offering price. Now, merely about 6 months later, the new development has becoming the last item on any buyer's list... The New Development ranking goes from #1 to the lowest of the low. Will NYC New Development ever make a come back? (hello Britney!)
With this new lending rule in place, how is any buyer going to buy in New Development,
not only with the typical new development risks, how is one ever going to be comfortable signing that contract not knowing when and if this development will hit 70%?
Or if they will ever be able to move in? What kind of buyer will take this type of risk?
Citibank and Chase, two largest lender in Manhattan Real Estate had increased a level of scrutiny on all buildings, the lending policy changes on the daily, almost hour by hour basis... It is not only affecting lending in New Development, it is also hurting the buyers who are buying the resale apartments!
As an active agent here in Manhattan New York City, part of my business is selling New/Pre Construction Developments to both oversea and local investors, with this piece of News in hand, even our cash rich buyers are shying away from New Developements because the domino effect that will have on their purchase, is this good for the market?
Less New Development and level off the inventory? Is this a good Market Correction?
Perhaps this is the Real Estate Darwinism?
Or the Real Estate Survivor?
Comments(3)