his year’s “State of the City” report investigates the booms and busts ofNew York’s housing market over the past four decades and details a few lessons from earlier times that may be relevant as we face the current downturn. For the first time, the report includes a “State of Sustainable New York City” section and a “State of New York City Preservation” section. Additionally, the report updates the “State of New Yorkers” section, which analyzes quality of life indicators by race / ethnicity, and presents rankings for over 50 indicators by community district. The Furman Center used their Index of Housing Price Apprec iation, a measure of average sales price changes dating from 1974 that adjusts forinflation and controls for variation in the quality of housing, to examine how prices have changed over the last 35 years. During this period as a whole, home prices in the city jumped by over 250%. The break down by different boom and bust cycles is as follows: • Be tween 197 4 a nd 198 0, pri ces decli ne d by 12.4 % c it ywid e. • Between 1 980 and 1989, p rices i ncreased b y 1 52%. • From 1989 to 1996, prices dropped by 29.3%. • From 1996 t o 2 006, prices i ncreased b y 1 24%. While the growth associated with this last boom cycle is staggering, prices in the city have not risen as much here as they have around the country. Indeed, the nationwide increase over the same period was 189%. Of course, there is tremendous variation between city and national averages and prices in neighborhoods such as East Harlem (up 500%) and Washington Heights (up 333%) outpace the national average. The Furman Center also explored the relationship between neighborhood characte ristics and neighborhood prices and looked for trends that may help explain the variation. Among their key findings were: • Despi te t he downturns, the city continued to make impor tant prog ress . Between 1974 and 2006, the city’s price gains far surpassed the losses and numerous social welfare indicators such as crime rates, school performance, and employment rates improved. • Pre dicti ng wh ich neigh borho ods will do well or will far e po orly is v ery diffi cult . Specifically, price trends during past downturns are not reliable predictors of price trends in future downturns. Conversely , strong performance in the 1980- 1989 upturn was correlated with gains in the most recent boom. For example, eight of the ten neighborhoods with the largest increases in the 1980s boom were also among the areas with the largest price increases in the most recent expansion. • Pr ice t re nds in we alt hy nei ghborh ood s are co unt er -in tui tiv e. Prices in higher-income neighborhoods tended to ANHD ANHD The Reader ...of Housing and Community News... March 27, 2009 Volume XXXIV Issue 7 Inside Project Development Underwriting 102 See page 7. Contents: Resources and Notices . . . 4 Calen dar o f E vents . . . . . . 8 Job Listings . . . . . . . . . . 10 This newsletter is made possible through the generous support of Bank of America, Capital One N.A., JPMorganChase, M&T Bank, Ridgewood Savi ngs Bank and Washing ton Mutual. Furman Center Releases 2008 “State of NewYork City’s Housing and Neighborhoods” Report T T
