Thursday, November 22, 2007

The Manhattan Effect




First off, Happy Thanksgiving everyone. We are enjoying it at my parents house in New Jersey. This morning I read the papers and it is amazing how many letters and editorials were decrying the property taxes up here. A few of these authors claimed that the entire middle class of New Jersey was fleeing or wanted to flee to North Carolina or Florida because of the horrendous tax burden. I thought that it was interesting as more and more people that I know from NJ are considering moving South (especially to Charlotte).
Additionally, my parents live in Jersey City which is directly across the Hudson River from Manhattan. Being only one subway (PATH) stop from Manhattan, Jersey City has boomed. When I went to high school it was abandoned railroad yards. Now it is miles and miles of condominiums, offices, and mixed use spaces. I think 50,000 residences have been built here between the Bayonne and George Washington Bridges. Where do all these people come from that can afford half a million dollar plus condos? Everyone I meet is an immigrant (smart ones working in banking or such) or from the mid west. Right on our street are so many people who are aspiring actors or investment bankers. Its amazing.
Anyways, I read article after article stating that Manhattan along with a few other signature cities has continued to surge ahead in property values because of 1) Big Wall Street Bonuses (Yes they still got $32 Billion worth this year) and 2) Overseas investors taking advantage of the weak dollar. Well, additionally, Jersey is booming because even though a 600 sqft 1 bedroom condo costs $800,000, that is only 40% of the price it would cost in Manhattan. Absolutely amazing!
Anyways, as prices and taxes continue to rise here so many non-investment banking people, are considering moving. I think that by extension (or third order effect) that Charlotte will continue to do well. The only question that I have is whether enough people will continue to move to Charlotte to offset the number of new homes built on former farm fields. I keep watching that Charlotte Observer which says that new home permits are way down, but are they down enough? Here’s hoping and a Happy Thanksgiving!

1 comment:

Anonymous said...

I think Charlotte will do well. Prices are way too high in NYC for young people to afford.