A Little Tough Love Needed For Ailing Residential Market?
Mortimer Zuckerman, chairman of Boston Properties, oversees a nationwide office tower empire when he’s not busy with his double life as a media tycoon. (He owns the New York Daily News and is editorial director of U.S. News & World Report.)
But he recently waded into the debate over what to do with the deeply discouraging mess that has home sales on the decline once again after a brief but fleeting revival.
Zuckerman’s prescription, laid out in an op-ed piece in The Wall Street Journal, is both simple and radical at the same time – cut the government subsidies and let prices fall to their natural level. (For what it’s worth, I recently pointed this out in a blog I write on residential real estate for Boston.com.)
Certainly more than a few buyers still mystified at stubbornly high prices in the Greater Boston market might agree. After all, no pain, no gain.
While Zuckerman doesn’t draw a parallel to the recovery taking hold in the once seemingly more troubled office market, he could have done so easily.
Astonishingly, office tower sales and prices appear to be on the rebound again, just a couple years after commercial property sales all but ground to a halt.
Just look at the Hancock tower, last year foreclosed on and this year the center of a spirited bidding war.
And this recovery is happening without the equivalent of a home buyer tax credit or the myriad other subsidies Uncle Sam has used to prop up the beleaguered residential market.
It’s certainly something to think about.