I read the other day that the median price for an apartment in Manhattan in the first quarter of 2007 was $835,000. This is four times the national median home price of $214,000. This information comes from the National Association of Realtors, whose NYC members themselves make astronomical commissions on co-ops and condos sold to those guys downtown working on futures. Theirs, not mine.
This made me wonder why there seems to be no end to the uptick in the prices of housing here in New York City. If the New York Stock Exchange were in, say, Las Vegas would we still have to pay over a $1 million for a tiny one bedroom apartment on the East Side? Come to think of it, Wall Street and Las Vegas have an awful lot in common. Legalized gambling from the floor just needs some showgirls to ring the closing bell. Might give a more proletarian feel to investing.
And what if Manhattan weren't an island? What if it stretched out in endless monotony like Vegas beyond the Sodom and Gomorrah neon light part? I mean, isn't part of this over-inflated pricing due to the fact that there are only so many streets to hold so many apartments to hold so many hedge fund guys?
As you know, Peter Minuit bought the island of Manhattan from the Canarsie Indians for $24 worth of trinkets. Yes, that is the story...allegedly, the Canarsie Indians resided on Long Island, and just traded in Manhattan. Kind of like the Westchester crowd today. Brooklynites choose to believe they they were from Canarsie--a pure myth--so it was the Long Island Indians who put one over on the Dutch white man. The Indians were probably thinking that those beads and silver trinkets, and maybe a hatchet or two were a much better deal than having to fix pot holes and get Co-op board approvals. So, with a collective sigh of relief on the part of the original native Manhattanites, the first real estate deal was done. Peter Minuit slyly exchanged his cache, believing he had put one over on those poorly clothed guys. And so began the incredible inflation that brought us to the ultimate silliness that was announced today.
Are you ready for this? There is a waiting list of seven or eight people who want to pay $225,000 for one of five private parking spaces on West 17th Street in the BASEMENT, no less, of a condo development that isn't even scheduled to open until January 2008! Pardon me, but that price should come with a view for your Honda Civic of the Hudson or the East River and maybe a southern exposure on a high floor! The part that has me bowled over is that the people buying these parking spaces don't even own cars! They're buying them as "investments" to be rented out to cover their costs and perhaps some day to be traded down on Wall Street. Or sold to put all the profits on black in Vegas.
So, what does this mean to me, a New Yorker? I am going to turn in my MetroCard immediately, find me a good financial advisor who specializes in Parking, and pull my money out of those stagnating Mutual Funds. The future of investments is clear for me, even if Peter Minuit's was a bit cloudy.
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