Weak Dollar, Only Short-Term Benefits?

[IMGCAP(1)]NEW YORK CITY-The weakening dollar has created many issues for US consumers, but it also has helped the local economy, and will continue to do so as foreign investment continues to pick up. Yes, in the short term, there are multiple benefits sources say, however some worry that the weak dollar is not a good thing for the US in the long term.

Robert Knakal, chairman of Massey Knakal, says there are short-term benefits for the hotel market, for example. Hoteliers gain from foreign travelers, who are expected to continue to come to the City in record numbers. Knakal also notes that domestic travelers are continually coming to Manhattan as overseas travel is cost prohibitive. The weak dollar has provided not only the boost to tourism, he says, but “the weak dollar has also stimulated massive amounts of foreign capital to be deployed into our real estate market. New York has benefited greatly from the globalization of real estate dynamics.”

[IMGCAP(3)]Hugh Finnegan, an attorney in the real estate group at Sullivan & Worcester LLP, agrees that there are “some” short-term benefits to the weak dollar. Certainly, New York City has continued to host many foreign visitors, he says. And, “the residential condominium market has benefited from the weak dollar. Between the increased value of the units, compared against the purchase price for those units that went to contract a few years ago, and compared against the weakening dollar, foreign buyers have helped protect the local market from the slide that is otherwise affecting the rest of the country.”