New York City Real Estate Market

Last week the major brokerages released their market reports and the news was grim.

• Overall transactions down over 50%
• Closings  over 10mil down 82%
• Loft sales down 73%
• Average sales price down 28%
• 3081 transactions in the second quarter of 2008
• 2727 transactions in the first six months of 2009

The majority of sales were under a million dollars so this is where we have the most transparency.  It is the only area of the market that is ‘normal’ with enough transactions to give a clear valuation.  In our business we see that if a property is priced correctly (25%-30% discount for the market) it will attract multiple bids.

The higher the price the more frozen the market becomes. There are so few sales that sellers cannot get a clear direction and so remain in limbo.  This will be the status quo until  jumbo mortgages return.

Predictions:

• Value is hot and excess is not.
• Luxury will always be with us.  However the definition of luxury has changed.
• Room count is more valuable than square footage.  No one wants to pay up for a 2000 square-foot, two bedroom loft if a 1500 square-foot apartment is less money.
• We are not at the bottom of the market.
• Brokerage firms will reduce the sizes of their offices and close some.

Credit: Jonathan Miller: Matrix

Prudential Douglas Elliman Real Estate Market Overview

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