We are definitely in a bubble and lord help us when it pops. Read "The Dollar Crisis" for a bit of an understanding of what's going on with the dollar.

Also, I wonder if some of the NYC bubble is also due to the simple fact that suburban American life has become so opressively unappealing to so many people. There just aren't very many other real urban (or even town) environments to live in in the US anymore.

So, I think part of the high cost of living in NYC is bubble. Part is real demand. But your point about the real estate costs of supermarket land is really great....

By aaron, at 1/20/2005 10:27 PM  

I’m not going to sit here and tell you: “it’s not a bubble.” (Instinct tells me that it’s got to be somewhat inflated. These prices just *feel* wrong.) Like many who have been watching this market I lack a justification for these sentiments. I cannot say for certain-- and even the evidence you’ve presented fails to convince me.

Two key facts:
1. More people than ever want to live in the city.
2. There is a critical housing shortage.

The demand for housing and the shortage of housing combine to create uniformly outrageous rents. This, in turn, has made the housing market explode since there is a lot of money to be made collecting rent. If the housing shortage persists then so, I say, will this bubble. If the demand for living spaces increases at the same rate as housing the bubble will also, I tell you: stay around.

The truth is that upper-middle-class people want to live in the city again. The city is simply not equipped for such a huge influx of residents. I imagine the bubble will disappear once heavy, dense, new construction alleviates some of the pressure caused by the disparity between demand and supply. This also explains the great difference in percent increase you mentioned. I think other American cities will see these kinds of jumps once they follow New York’s lead and begin to gentrify the maliciously neglected and often poor neighborhoods nearest to the city center.

As for gristedes? Those stores take up a lot of space. The new residents may buy everything from freshdirect.com anyway.

By futurebird, at 1/23/2005 10:56 AM  

i'm a reporter at the new york sun newspaper doing a story on real estate bloggers, and i'd like to interview you - can you contact me? 212-901-2665. thanks, julie satow

By Anonymous, at 1/23/2005 3:29 PM