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Real Estate Pros See Mixed Market

BEVERLY HILLS, CA-The 10th Annual Milken Institute Global Conference carries a mixed-bag for real estate insiders, with commercial product gaining ground just as the residential sector falls.

By Daniel D. Williams | Updated on April 24, 2007

BEVERLY HILLS, CA-Real estate has been one of the major components of the Milken Institute Global Conference 2007, which has also focused on health, global economics and education. One panel, titled “Real Estate: What Does the Future Hold?” offered an interesting contrast among the industry’s different product types; commercial product is gaining ground while the residential sector plunges.

Panelist Robert Toll, chairman and CEO of Toll Brothers Inc. said New York and Texas remain among the few strong residential markets, for now. “New York has been pushing prices. Housing has been phenomenal,” Toll said. He pointed to $1,500 per sf in Manhattan and even $1,000 per sf prices in Brooklyn and Hoboken, NJ.

But not all is peachy. The subprime fallout has begun and will continue to hammer away at those who had the shakiest credit to begin with. The rich aren’t immune either. “We live at the top of the food chain,” said Toll, whose homes average around $790,000. “But there’s still a chain. So, even though we’re at the high-end, there’s a trickle-up effect.” He said the $700,000 homebuyer is selling out of a $400,000 home, but “who’s going to be buying that now?”

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