On Sunday, August 14, 2005 the Staten Island Advance joined the many other media players around the country in looking at the possibility of a dire end to the long-running real estate bull market.  In its front page article entitled “Is the bubble about to burst? As housing prices soar, middle-class buyers could soon pull back” by Karen O’Shea The Advance took a look at the potential for a major turnaround in the Staten Island market.

The article addressed both the new construction market as well as the re-sale  portion of the business.  It quoted one small local builder who said he may abandon the business on Staten Island “because of skyrocketing construction and land costs combined with new more restrictive zoning regulations.”

Regarding the overall market Realtor, and broker-owner, Bob Kelly took a moderate stance on the short term prognosis for the market by saying “…The old rule of thumb was that such costs -- mortgage, principle, interest, taxes and insurance -- should not exceed 26 percent of a family's gross monthly income. "Nobody abides by that,’ admitted Kelly. ‘People are much more strapped than they ever were.’  Still, Kelly echoes other brokers when he says it's a strong market and he does not expect mid-priced homes to suffer much, even if the market falters.”

Overall, I thought the article was fair and even-handed” said SIBOR CEO Sandy Krueger. “I didn’t read a prediction of a bubble bursting in the article and I don’t see one coming from any of the reliable experts that I listen to.  I recently came back from a meeting of the National Association of Realtors in Chicago, and while there are some isolated areas around the country that could see a bursting, nothing seems to point to that situation in Staten Island.  Will rising list prices begin to moderate?  They probably will.  But a major roll back of selling prices doesn’t seem to be in the cards.”

Some SIBOR Realtors seemed more upset with the article.  We asked for responses from the membership and the following is a selection of those submitted.

Realtor Anthony Racanelli said “…While it is unrealistic to assume that prices will escalate at this rate of appreciation, over time, real estate has increased in value and it is the major edge against inflation.  To suggest that there is an imminent doom in market values is speculative and without historical fact.”  He added, “… I do agree that prices won’t rise as much or as quickly as in the last several years; but, if an intelligent approach is followed, every person should consider purchasing their own home; it is better then renting.  They will be better off in the long run.”

Realtor Gail Rosselli added, “Yes, I see the high end houses leveling off in price.  They tend to remain on the market longer…I believe the builders are backing off mostly because they can’t over develop anymore and make ridiculous profits.”

Realtor Mathew J. Gardiner said “I was a NASDAQ market maker for twenty years.  My former industry is in near ruin from a real bubble.  This so-called housing bubble is anything like the one I lived through.  Populations keep increasing therefore demand for housing is a necessity.”

Realtor Harold Conner added, “…I believe the prices are already leveling off as buyers become very selective.  However, overall demand should remain relatively strong for the immediate future."

And Realtor Marialana DiMarzio said, “The Staten Island Advance should have written an article on how unaffordable apartments have become.  It makes much more sense to buy because of the equity.”

Realtor Neil Litvin said, “The Staten Island housing market has strong fundamentals.  The borough is close to Manhattan and New Jersey, providing for an easy commute for the average worker.  The average home on SI offers many amenities that are basic here, but not found in our surrounding boroughs such as yards and garages.  Barring a national catastrophe the market should remain very stable.  If the market were to crash it would need to coincide with a national event.  The fundamentals of the Staten Island housing market are solid and at worse we will see a minor correction at some point.”